Summary of Council decision:
Two issues were investigated, of which one was Upheld and the other Not upheld.
The website for Sky Business broadband www.business.sky.com, seen on 25 January 2023, featured a headline stating “SAVE OVER £750 vs BT Business”. Smaller text underneath stated “Comparison of Sky Connect’s Essential offer price vs BT Business’ Essential standard price*”. Another heading stated “Say Hello to our New Year sale”. Further text stated “With big savings …”. Smaller text stated “24/36-month terms only. £12 delivery. If required, £99 Openreach install may apply. Prices exclude 20% VAT and may vary unless price guarantee applies”.
British Telecommunications plc (BT) challenged whether the price comparison was misleading because:
1. BT’s Business Essential package was available at a lower promotional price than BT’s standard price at the time the ad appeared; and
2. they believed a significant proportion of customers would have to pay the £99 installation fee and that had not been factored into the advertised savings.
1. Sky UK Ltd (Sky) confirmed that the offer ran from 5 to 31 January 2023, and said they were no longer using the claim in the form complained of. They said the ad compared their price with the standard price for BT’s Business Essential Package, which was the price customers would usually pay for the product once any promotional offer had ended. They pointed out that the CAP Advertising Guidance on retailers’ price comparisons in marketing communications (CAP Guidance) did not stipulate that price comparisons could only be against a competitor’s current pricing. The Guidance stated that, where marketers were not comparing promotional prices with promotional prices, “it should be clear that they are comparing their promotional prices with their competitors’ normal prices”.
They believed that the basis of comparison, that their offer price was being compared with BT’s standard price, was set out clearly in the ad in a subheading immediately beneath the ‘headline saving’ claim. Consumers were then directed via an asterisk to legal text that further detailed the basis of the claim. They believed that, given the prominence of the subheading and when the ad was viewed as a whole, consumers would clearly understand that the savings claim related to BT’s standard pricing. They added that the ad was targeted at business customers, who would understand the difference between, and relevance of, offer versus standard pricing. The term “standard price” was widely used in the market and on BT’s own website to describe their non-offer pricing. Sky believed that indicated that BT considered “standard price” to be a clear and well-understood term for non-offer pricing. They believed a significant proportion of the business broadband market was made up of existing BT customers, who would be paying standard pricing and would therefore make the saving if they moved to Sky.
2. Sky explained that the advertised broadband packages were available via both fibre to the cabinet (fibre optic cables to a streetside cabinet, copper cables from the cabinet to the home or premises) and fibre the whole way to the premises (FTTP/full fibre) technology. The £99 fee applied only to those customers who had chosen FTTP for the first time and would consequently require an optical network terminal to be installed. Sky said first-time FTTP customers generally made up a small proportion of total customers.
They pointed out that the advice issued by CAP on Prices: General stated that quoted prices needed to include only charges that applied to all or most buyers. They provided data to show the percentage of consumers who had paid the £99 fee for the period during which the ad appeared. Because the charge was not mandatory to all or most customers (or a significant proportion of customers) taking up the offer, they believed it did not need to form part of the savings calculation. They added that all other generally applicable mandatory fees, such as delivery, were included in the pricing comparison headline saving and explained in the supporting legal text.
The ad stated directly underneath the savings claim that the claim was based on a “Comparison of Sky Connect’s Essential offer price vs BT Business’ Essential standard price*”. The asterisk linked to legal text that included the statement “Based on a comparison of Sky Connect’s offer price against BT’s standard prices for equivalent packages and features. Correct as of 14 December 2022”. The legal text did not state that prices might vary due to promotional offers. The ASA considered that business consumers would expect to be able to make a saving of up to £750 at the time the ad appeared by purchasing the Sky broadband package instead of BT’s.
The CAP Guidance stated “Marketers should normally compare their promotional prices with their competitors’ promotional prices. If they do not, it should be clear that they are comparing their promotional prices with their competitors’ normal prices”. Although we acknowledged that the ad stated that the comparison was between an offer price and a standard price, we understood that at the time the ad appeared and throughout the offer period, the BT Business Essential package was also on promotion and was therefore not available to purchase at that standard price. We acknowledged that BT customers who were currently paying the standard price and who chose to switch to the Sky package at the offer price would achieve the saving. We considered, however, that the ad did not reference making a switch and had not been directed solely at existing BT business customers who were paying BT’s standard price for their broadband. Therefore, some business consumers seeing the ad would not have been existing BT customers. We considered that, in the absence of further, more prominent, clarifying information, business consumers would be likely to understand that BT’s package was only available at its standard price at that time and not on promotion. They would therefore have expected to make a saving of £750 by choosing Sky’s package over BT’s. We understood that whilst existing BT business customers paying their standard price would have been able to achieve that saving by choosing Sky’s package over BT’s, other business consumers would not.
Because business consumers would understand from the ad that they could save £750 by purchasing Sky’s broadband package rather than BT’s broadband package at the time the ad appeared when that was not the case for all, we concluded the ad was likely to mislead.
On that point, the ad breached CAP Code (Edition 12) rules 3.1, 3.3 (Misleading advertising), 3.33, 3.35 (Comparisons with identifiable competitors) and 3.39 (Price comparisons).
2. Not upheld
Small print in the ad stated “If required, £99 Openreach install may apply”. We considered that business consumers would understand from this that the fee was an additional charge that would apply to some customers, rather than an integral part of the package. We understood that only those business consumers who were first-time users of FTTP broadband would need to pay the £99 installation fee.
We assessed the data provided by Sky. We considered that the percentage of business consumers who were charged the fee during the offer period represented a small proportion of the total. Because the fee did not apply to a significant proportion of buyers, we considered that it would not be seen by most business consumers, to whom the ad was directed, as a major factor in the decision to purchase and that it was therefore not necessary to include it in the savings claim. We therefore concluded that the ad was unlikely to mislead on that point.
On that point we investigated the ad under CAP Code (Edition 12) rules 3.1, 3.3 (Misleading advertising), 3.33 and 3.35 (Comparisons with identifiable competitors), but did not find it in breach.
The ad must not appear again in the form complained of. We told Sky UK Ltd to ensure that their price comparisons were clear and their ads reflected the prices available to all business consumers.