Out-Law News 1 min. read

Cloud provider's ad failed to explain upload speed limitations, watchdog rules

A cloud computing provider that ran a promotion stating users could store an "unlimited" amount of data made exaggerated claims that were not suitably qualified or substantiated and were likely to mislead consumers, the UK's advertising watchdog has ruled.

The Advertising Standards Authority (ASA) determined that an ad on Carbonite's website marketing the company's 'Online Backup' file storage software breached the Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code).

Carbonite had claimed that it could offer "unlimited online backup storage" to users of its Online Backup service and that there were "no limits on storage capacity". However, although ASA determined that users could store an unlimited amount of data through Carbonite's service, it said the company had failed to explain limitations users could encounter.

"Although unlimited amounts of data could be uploaded, we noted that if data uploads exceeded 200GB, less bandwidth would be available resulting in slower back up," ASA said in its adjudication. "Because it did not make this clear, we concluded the ad was likely to mislead."

The watchdog said the ad had breached five sections of the CAP Code and that the company had also breached a sixth by failing to respond to its investigative enquiries. Carbonite breached rules on misleading advertising and made exaggerated claims that were not suitably qualified or substantiated, ASA ruled.

Under the CAP Code marketing communications that are materially misleading or likely to mislead are prohibited. The Code also bans marketing communications that mislead consumers "by omitting material information ... by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner".

'Material information' is defined under the Code as "information that the consumer needs to make informed decisions in relation to a product." The context and the medium and how advertisers make material information available to consumers through "other means" in cases where the time or space puts constraints on the medium, help determine whether missing material information or the way it is presented is "likely to mislead the consumer".

The Code also prohibits claims being made in promotions that "mislead consumers by exaggerating the capability or performance of a product". Advertisers must clearly state any significant qualifications to claims they make in ads.

The rules also require advertisers to "hold documentary evidence" that can support the claims they make. The evidence must be of a sufficient standard that it is likely to be regarded as objective by consumers and is "capable of objective substantiation," according to the Code.

Any "unreasonably delay" in responding to ASA enquiries is also an automatic breach of the Code.

ASA has ordered Carbonite not to run the ad again in its current form and "to ensure they made clear any reduction in upload speeds in future".

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