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Judge Bars DirecTV From Running Anti-Cable Ads

A federal judge issued a preliminary injunction barring DirecTV from airing TV ads that make claims regarding the supposed preference of consumers and home-theater installers for satellite TV’s picture quality.

U.S. District Court Judge John Grady of the Northern District of Illinois earlier this week also denied DirecTV’s request for an injunction against ads that Comcast was running. In those ads, Comcast cited a survey by Frank N. Magid Associates that said two-thirds of satellite customers thought the cable operator had better HD picture quality.

The preliminary rulings stem from a false-advertising suit that DirecTV filed against Comcast in May in Chicago.

Comcast promptly filed a counterclaim against DirecTV in June, and wound up seeking an injunction against DirecTV ads that spoofed Baywatch and American Pie.

"We’re pleased that the Court has issued an injunction ordering DirecTV, its affiliates and resellers, to immediately stop airing the false and misleading ads claiming superior picture quality over cable," Comcast spokesman Jenni Moyer said in a statement. "The Court’s order confirms, once again, that DirecTV’s claims are unsubstantiated and based on flawed and unreliable studies."

The court also directed Comcast to post a $500,000 bond, meant to cover any expenses racked up by DirecTV if the court found it was wrongfully restrained. The case is still set for trial.

The judge’s preliminary injunction bars DirecTV from running ads that rely on claims based on a survey of consumers conducted by TNS in April last year, or that rely on a survey of 400 home-theater installers conducted by Alliance Consulting Group last December.

DirecTV’s American Pie ad referenced the consumer survey, while the Baywatch ad referenced the home-theater installer survey.

Citing the court’s refusal to issue an injunction against Comcast, Moyer said the ruling will enable the cable operator “to continue airing our ads, which show that consumers, including satellite customers, prefer Comcast’s HD picture quality over DirecTV’s.  We applaud the Court’s clear and decisive rulings which will protect consumers from being exposed to DirecTV’s unfair and misleading ads, and support Comcast’s claims.”

DirecTV said it will appeal the ruling. “We are quite perplexed by the court’s conclusions. The facts simply don’t support these decisions,” the company said in a prepared statement. “At the end of the day, though, it’s the customers who matter, and they’ve shown their preference for DirecTV over cable in both the recent ACSI and J.D. Power rankings. Those two studies speak for themselves.”

The court, in reference to the American Pie ad, noted that the survey it cited had consumers comparing TV screens with a digital signal from DirecTV versus an analog signal.

“The consumers were not told that one signal was digital and the other was analog,” the judge said during a recent hearing. “The evidence in this case is uncontradicted that digital signals are better than analog signals. The responses of the consumers were predictably that the digital signal was better. It is not easy to think of a test that could be more unfairly designed than the consumer survey run by TNS in this case.”

Judge Grady said that the likelihood of Comcast prevailing on the merits of the case was “overwhelming.”

In the Bay Watch spot, DirecTV proclaimed that home-video professionals recommend DirectTV picture quality “4-1” over cable.

As to the installer-survey, cited by the Baywatch DirecTV ad, the judge said at the hearing that survey started off by asking an unfair question.

“The question should have been, based on your experience as an installer, do you have a preference as between the picture afforded by satellite digital or cable digital,” Grady said. “That wasn’t asked. Instead, an inherently misleading and unfair question was asked.”

Just last week, an appeals court upheld a lower court decision that barred DirecTV from running two ads that Time Warner Cable had deemed objectionable. It was also disclosed that DirecTV and Time Warner had settled the false-advertising suit that the cable operator had lodged against the satellite provider.