Ad Council Refers Texas Instruments' DLP Ads to FTC

The National Advertising Division of the Council of Better Business Bureaus, the advertising industry's self-regulatory forum, announced that it will refer advertising by Texas Instruments for its flat-screen DLP technology to the U.S. Federal Trade Commission. Epson America, a competitor of TI that also markets front- and rear-projection digital products, brought the content of the advertiser's claims to the attention of the NAD.

TI responded to Epson America's claims. Although TI "respects the role that NAD plays in helping advertisers adhere to the proper standards and appreciates the opportunity provided to participate in the self-regulatory process," it declined to participate in the traditional NAD forum process to determine the validity of the claims. However, the Texas firm told NAD it believes "its [ad] claims are fully substantiated and [are] neither false nor misleading."

Nonetheless, according to NAD, TI has "voluntarily elected to discontinue" some of the challenged claims. The specifics of the complaints were not outlined by NAD or either company. However, in a copy of the full report provided to HD Notebook by NAD, Epson America asserts that TI "made false comparative claims that LCD technology is less reliable than DLP technology

  1. in the abstract, without regard to the finished products in which the technologies are incorporated
  2. in front projectors generally
  3. in rear-projection DLPs, compared to rear-projection LCDs and flat-panel LCDs."

Epson America also charged that TI advertising made disparaging claims about LCD technology, both generally, and incorporated in specific products--i.e., that LCD technology "degrades" from heat, or has "problems with degradation," and that DLP technology is "more reliable" because it is virtually immune to heat, vibration, environmental and other factors that cause analog technologies such as LCD to degrade over time. Also, "the challenger [Epson] further contended that the advertiser falsely claimed that 'other display solutions' (including LCD technology) are susceptible to degradation from humidity and that it makes other unsubstantiated claims that DLP-based products never go out of alignment, while LCD-based products become misaligned over time (or are susceptible to vibration),"according to the NAD report.

While NAD appreciated Texas Instruments' voluntary discontinuance of some of its claims, it expressed disappointed that the advertiser declined participation in a formal NAD-led process to discuss the claims with all parties. In accordance with its regular procedures, NAD then referred the matter to the FTC for possible action.