ASA Adjudication on British Sky Broadcasting Ltd

Ad

A national press ad, for the Sky Talk service, stated "Despite advertising price cuts, BT are giving 11 million customers a price rise today. Are you one of them? At Sky, we believe in real value and fair and honest pricing - that's why Sky customers can get call packages with Sky Talk that are a lot cheaper than either BT or Virgin Media, with no funny business. To join one of the UK's fastest growing phone services, call us ..."

Issue

BT challenged whether the ad was misleading and denigratory, because it implied BT had intentionally misled customers by surreptiously increasing their prices.

CAP Code (Edition 11)

Response

Sky said the main message of the ad was that BT had heavily promoted price cuts whilst covering up simultaneous price rises for millions of its customers and thereby had potentially misled customers.  They said they strongly believed the BT price cut advertising had the potential to mislead consumers and it was fair and reasonable for Sky to point that out.

Sky said in the lead up to 1 August 2007, BT had heavily promoted certain price cuts that would come into effect on that date.  Sky provided a selection of those ads, which included mailings sent direct to BT customers.  For example, they highlighted a BT ad that was headed "From 1 August BT customers will enjoy a price cut on their UK Evening & Weekend calls.  Are you one of them?"  Sky maintained that those ads made generalised price cut claims, for example "We've cut the cost of call packages, yet again" and "our customers are set to save millions of pounds".  Sky believed those ads were misleading, because they did not make clear to which packages the price cuts were applicable.  They said the ads either made ambiguous references in the body copy, or in the small print, to the package relevant to the advertised price cut.  Sky also pointed out that no reference was made in the body or footnotes of those ads to the associated price rises.  

Sky said on 1 August 2007 BT's call set-up fee had doubled from 3 to 6 pence for Option 1 customers and for Option 2 and 3 customers who exceeded their allowance of zero rated or inclusive calls.    They said the rate for calls to UK landlines was increased from 3 pence to 3.25 pence per minute for the same customers.  In addition, Sky said BT had changed the way they charged for UK mobile and non-geographic calls, which meant their customers would no longer benefit from a lower rate for daytime calls at the weekend.  They said calls made from a landline to UK mobiles in the daytime at the weekend more than doubled for all BT's customers from 5 pence to 12.5 pence per minute and in the evening at the weekend from 5 pence to 7.5 pence per minute.  They said calls to 0845 numbers in the daytime at the weekend had increased from 0.5 pence to 2 pence per minute and calls made to 0870 numbers in the daytime at the weekend increased from 1.5 pence to 6 pence per minute. They said the same calls were also effectively increased because from 1 August BT rounded them up to the next 0.5 pence rather than the previous approach of rounding them up by 0.1 pence.  

Sky said those increases in the set-up fees and other charges and terms could easily outweigh the promoted price reductions for BT customers, particularly for BT's 11 million Option 1 customers and any of their customers that made a number of daytime, weekday, mobile or non-geographic calls.  They said as a result, they believed customers could have been misled by BT's promotional materials into thinking they would be making savings overall, making savings on all their evening and weekend calls or on all their calls to mobiles, when that was not necessarily the case.  

Sky said that without a fair overall picture of the price changes introduced by BT on 1 August 2007, customers were not in a position to select accurately the provider that would be best for them, taking into account their own call patterns.  They said although references to the price reductions were heavily promoted, references to the price increases were found only in the small print of BT's terms and conditions document.  Sky maintained that even if that document was delivered to all BT customers affected by the price changes, that in no way adequately brought them to the attention of consumers.

Assessment

THIS ADJUDICATION REPLACES THAT PUBLISHED ON 16TH JANUARY 2008.  THE DECISION HAS BEEN REVERSED, MAKING THE COMPLAINT UPHELD.

Upheld

The ASA noted several changes to BT's prices and terms and conditions came into effect on 1 August.  We noted those changes involved price rises as well as price cuts, for example an increase in the call set-up fee from three pence to six pence for all Option 1 customers and the removal of the weekend band for some calls meant customers no longer benefited from a lower weekend rate for daytime calls.  We noted BT had written to customers in July and enclosed a copy of a leaflet that detailed all the changes to their terms and conditions.  We also noted BT had published several ads that highlighted specific price reductions to their call plans and we acknowledged that BT would not be expected actively to promote price rises in the same way but noted they had introduced them at the same time and for many of the same customers to whom they were advertising prominently price cuts without mentioning that in their advertising. We therefore considered that Sky had substantiated their claim "Despite advertising price cuts, BT are giving 11 million customers a price rise today...". However, the ad went on to claim "we believe in real value and fair and honest pricing" and "no funny business", which we considered went beyond a robust and objective price comparison and implicitly attacked BTs business practices. We did not consider that Sky had substantiated that BT had intentionally misled customers by surreptitiously increasing their prices. We concluded that the ad was misleading in that respect and denigrated BT. The ad breached CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness), 18.1 (Comparisons with identified competitors and/or their products) and clause 20.1 (Denigration and unfair advantage).

Action

We told Sky not to use the approach again.

Adjudication of the ASA Council (Non-broadcast)