DirecTV and FTC move toward settlement of deceptive ad suit

directv

AT&T and the Federal Trade Commission are looking to settle a two-year-old lawsuit alleging that DirecTV engaged in deceptive advertising.

"DirecTV and the FTC's Bureau of Consumer Protection have today reached an agreement in principle on the material terms of a settlement, which, if approved by the commission, would resolve all claims in this case," the court motion stated, according to court documents obtained by subscription legal news service Law 360. "DirecTV respectfully requests that the trial be continued. The commission does not oppose this motion.”

The settlement still needs to approved by an FTC commission body. 

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceVideo!

The Video industry is an ever-changing world where big ideas come along daily. Cable, Media and Entertainment, Telco, and Tech companies rely on FierceVideo for the latest news, trends, and analysis on video creation and distribution, OTT delivery technologies, content licensing, and advertising strategies. Sign up today to get news and updates delivered to your inbox and read on the go.

Neither side disclosed terms of the suit. AT&T reps didn’t immediately respond to FierceCable’s inquiry for comment. 

RELATED: FTC slams DirecTV's bid to pare down false-advertising suit as case goes to trial

The FTC filed its complaint in March 2015, before AT&T closed on its $49 billion purchase of DirecTV. In its suit, the agency alleged that DirecTV didn't adequately disclose that a discounted 12-month video package requires a two-year contract, and the monthly bill increases by as much as $45 in the second year of the agreement.

The agency also accused the company of misleading customers about free three-month trials of premium channels such as HBO and Showtime. DirecTV, the FTC said, failed to inform its customers that they'll be automatically charged subscription fees once that free trial period ends.

In its complaint, the FTC also accused DirecTV of making "deceptive claims or omissions of material facts in advertisements." It also says the satellite company has failed to "clearly and prominently" disclose critical contract terms.

Part of the FTC's beef rested in DirecTV's use of asterisks in ads. For example, one ad touted video package pricing as "Now only $19.99*/month" in a large font. However, the asterisk pointed to a disclosure that is in a much lighter print color and significantly smaller font size. Meanwhile, an additional assertion using a double asterisk directs the reader to another page altogether.

Suggested Articles

There is no one size fits all strategy when it comes to using multi-CDNs to deliver video.

Ad-supported video streaming service Tubi says it now has more than 20 million monthly active users after record growth throughout the first half of 2019.

Viacom’s BET Networks is launching its own subscription video streaming service, BET+, as a joint venture with Tyler Perry Studios. The service is launching in…