The specific decision at hand involved a case brought against
the eyewear purveyor, Coastal Contacts, by a competitor, 1-800
CONTACTS. Submitted in mid-June, the complaint contended that
Coastal Contacts had deceptively offered free and discounted
products to Facebook users who "liked" the company's fan page, and
that the number of "Likes" presented to investors through press
releases had been fraudulently obtained.
With respect to the claim about deceptive postings, the NAD
evaluated status updates on Coastal Contacts' fan page, including
language such as "Like This Page! So you too can get your free pair
of glasses!" In its decision, it determined that Coastal Contacts
should add clarifications to those postings to inform consumers
that they're responsible for shipping and handling charges, and
that not all models of glasses are available for free. It also
instructed the retailer to remove language about consumers having
the ability to save 70% on contact lenses, on the grounds that the
figure was based on a selective analysis of the marketplace.
In terms of the more serious part of the complaint, alleging
that Coastal Contacts had inflated its Facebook "Likes" and
misrepresented itself to consumers and investors, the NAD decided
in favor of the advertiser, determining that the overall thrust of
the campaign was truthful even though some details were
misleading.
According to the NAD Senior VP Andrea Levine, the decision is
significant in the message it sends to advertisers and the
spotlight that it puts on this type of campaign, often referred to
as "Like-gating."
"We used the opportunity in the decision to caution that
companies that are utilizing deceptive practices to get 'Likes'
would have to go back and remove those 'Likes' from the website,"
she said.
The NAD cannot itself enforce decisions, but it can refer
matters to the Federal Trade Commission if an advertiser doesn't
comply with one of its decisions; Ms. Levine noted the NAD has a
96% compliance rate. Since "Like-gating" is an increasingly popular
strategy among advertisers looking to entice consumers with
freebies and other promotions, she thinks the NAD's decision is
significant.
"In the last week I've started to see ads on national television
saying, 'Like us and you can get that ," Ms. Levine said. "So the
concept of corporate "Likes" being broadly procured through offers
of discounts and sweepstakes is becoming very, very common and very
broad, but they need to be produced through truthful
promotions."
Facebook does have a team in place that investigates some
complaints about violations of its terms -- which includes both an
automated component and human review. It stipulates that contests,
promotions and sweepstakes should be run through third-party apps
so that users are aware of the precise nature of the information
they're providing to brands.
