NAD Recommends LG Discontinue ‘Ultimate’ Picture Quality Claim and False Disparagement Claims Following Samsung Challenge; LG to Appeal

New York, NY – April 19, 2018 – The National Advertising Division has recommended that LG Electronics USA, Inc. modify or discontinue certain claims made in website, print and point-of-purchase advertising for LG’s Super UHD and OLED television, including claims that competitor Samsung Electronics America, Inc., created the product name “Samsung QLED” to “confuse consumers.”

LG said it will appeal NAD’s adverse findings to the National Advertising Review Board.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

The claims at issue in this case were challenged by Samsung, and included the following false disparagement and express and implied claims.

  • QLED’s name “was created to confuse consumers.”
  • “Facts matter, and there are none that support it [QLED] being the next innovation in television.”
  • “[T]he Q in Q-L-E-D is just marketing”
  •  “LG’s OLED TVs offer the ultimate in picture quality.”
  • “Infinite Contrast.  Perfect black is only attainable on an LG OLED TV.”
  • “Perfect Viewing Angle.  Watch From Any Angle Making Any Seat the Best Seat in the House.”
  • LG’s OLED televisions have “more natural color” than Samsung’s QLED television.
  • LG presents a misleading side-to-side comparison which implies that all other competitive televisions, including QLED, deliver poor contrast.
  • LG’s LED Super UHD televisions have remote and channel features that are superior to QLED.
  • LG’s Super UHD televisions have a “wider spectrum of colors” than QLED.

During the course of the proceeding, the advertiser informed NAD that it had permanently discontinued the claim the “most options in HDR content,” as well as a graphic containing the challenged implied claim regarding LG’s Super UHD features – such as “Magic Remote” and “Channel Plus.” Based on the advertiser’s representation, NAD did not review these claims on their merits. The voluntarily discontinued claims will be treated, for compliance purposes, as though NAD recommended its discontinuance and the advertiser agreed to comply.

A key issue for NAD in this case was whether the challenged advertising falsely disparaged Samsung’s QLED television or accurately informs consumers of QLED’s relative disadvantages when compared to LG’s OLED television. NAD noted in its decision that an advertiser’s right to promote the benefits of its product must be carefully balanced against a competitor’s right not to have its product falsely disparaged.

NAD first determined that the claim that QLED’s name was “created to confuse consumers” reasonably conveyed the message that Samsung was intentionally misleading and tricking consumers. The full text of claim states that “Experts say, Q-L-E-D’s name was created to confuse consumers,” and LG argued that it was merely quoting experts.

NAD noted, however, that advertisers may not make claims either through consumer testimonials or expert endorsements that could not be substantiated if made directly by the advertiser.  Because there was no evidence in the record that Samsung is intentionally trying to confuse consumers, NAD recommended that the advertiser discontinue this claim, as well as the claim “Facts matter, and there are none that support it [QLED] being the next innovation in television.”

However, NAD determined that the claim “‘Q’ in QLED is just marketing,” in the context in which it was conveyed, was an opinion, rather than a claim requiring support.

Turning its attention to the claim “ultimate in picture quality,” NAD recommended that the advertiser discontinue the claim or modify it avoid conveying an objectively measurable claim. NAD further recommended that the advertiser discontinue the claims “perfect black,” “infinite contrast,” and “Watch From Any Angle Making Any Seat the Best Seat in the House.”

As NAD has noted in the past, whether the term “ultimate” is considered puffery – or a superiority claim in need of substantiation – depends on the context in which the term appears.

In this case, NAD determined that the claim “ultimate in picture quality” was an objectively measurable claim tied to specific performance attributes, including “stunning images,” “brilliant brights” and “deep darks,” that would require testing that demonstrated that OLED’s picture quality performance exceeds that of its competitors.

As for the challenged implied claims, NAD recommended that the advertiser discontinue its claim that LG’s OLED televisions have “more natural color” than competing televisions. NAD also recommended that the advertiser discontinue the use of the challenged side-by-side demonstration to show OLED’s black level performance.

Finally, NAD determined that there was no implied message that LG’s Super UHD televisions have a “wider spectrum of colors.”

LG, in its advertiser’s statement, said the company will appeal certain adverse finding to the NARB.

“LG is confident that it can substantiate the picture quality and performance claims it is making in connection with its Super UHD and OLED televisions. LG therefore requests the NARB’s review of the following claims: (i) ‘perfect black’; (ii) ‘infinite contrast’; and (iii) ‘ultimate in picture quality.’ LG will agree to comply with the NAD’s recommendations with respect to the remaining claims to the extent that such claims are based on substantiation the NAD has deemed insufficient or unreliable,” the company said.

Note: A recommendation by NAD to modify or discontinue a claim is not a finding of wrongdoing and an advertiser’s voluntary discontinuance or modification of claims should not be construed as an admission of impropriety. It is the policy of NAD not to endorse any company, product, or service. Decisions finding that advertising claims have been substantiated should not be construed as endorsements.