FTC watchdogging ads when there’s little need

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Was anybody fooled by Microsoft Corp.’s campaign, "Can your Palm do that?"

The print ads, which began a three-month run last April, ran afoul of the Federal Trade Commission, which goes after "false and misleading" or "unfair" advertising, among its other duties.

The FTC has focused on the small type disclosing that buyers of Hewlett-Packard Co.’s Pocket PC-based Jornada would need to purchase a separate modem for wireless capabilities. Palm Inc.’s Palm VII includes a built-in wireless modem.

"It is really an issue over the font size and graphics of the disclosure," said Microsoft spokesman Jim Desler. "The disclosure was made, [and] there was no evidence anyone was misled." Microsoft has signed an agreement with the FTC staff, Desler said, noting that it has yet to be approved by the federal agency.

To be sure, Microsoft wants to boost interest in its handhelds. The devices, made by several hardware manufacturers, including Hewlett-Packard, Compaq Computer Corp. and Casio Inc., have consistently trailed market leader Palm, which has 60% of the PDA market to Microsoft’s less than 10% share.

In fact, when Microsoft introduced a diminutive version of its flagship Windows operating system, it labled it a "Palm PC." The term brought howls from Palm’s legal team, who brought a lawsuit, resulting in a settlement with Microsoft in 1998. Microsoft’s now calls its platform a "Pocket PC."

The latest Pocket PC campaign, launched in February, emphasizes wireless features but makes no mention of rival Palm.

Now for my disclosure. My trusty Palm IIIx can’t do this, that or anything anymore. As I began writing this column, I pulled the Palm from my jacket pocket to discover it had developed a massively cracked screen. (My guess: A sedentary editor sat on it.)

Actually, I’ve been longing to upgrade. I can recite the checklist in my sleep: a color screen, a faster processor, an expansion port for peripherals and gizmos. Fortunately, it’s a great time to trade up; handheld manufacturers are rushing to deliver just these features. Palm itself is rumored to be set to unveil its next-generation device—a Palm V with a color screen and an expansion slot—at the massive CeBIT 2001 show in Hannover, Germany, at the end of this month.

But will the clever ads from Palm and others dictate my choice? In a word: No.

You see, I’m at the end of my procurement cycle, when specifications matter most. I’ll be a frequent visitor at vendor Web sites, carefully reading product data sheets. And I’ll be exploring a plethora of Internet discussion groups, where I can read the early reviews.

Such educated buying behavior, enabled by the Internet, is fast becoming the rule for consumers. It’s already the rule for businesses. The FTC is behind the curve. Most of us already have this well in hand.

Ellis Booker is editor of BtoB. He can be reached at

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