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NAD Decides on Epson's Claims About TI

The National Advertising Division of the Council of Better Business Bureaus has decided that Epson America can support certain advertising claims made for the company's 3LCD projector technology, but recommended Epson modify or discontinue certain claims, according to a press release issued by the organization.

The National Advertising Division (NAD) of the Council of Better Business Bureaus has decided that Epson America can support certain advertising claims made for the company's 3LCD projector technology, but recommended Epson modify or discontinue certain claims, according to a press release issued by the organization.

NAD, the advertising industry's self-regulatory forum, examined claims made in sales literature, trade show materials, flyers, videos, and on the Internet, following a challenge by Texas Instruments (TI).

Among the Epson claims at issue were that "DLP technology is harmful, distracting, and subject to 'color breakup'"; "3-chip LCD Projectors are three times better than single-chip DLP projectors"; and "DLP projectors have poor grayscale performance."

NAD was also looking at characterizations by Epson that its 3LCD panels were "chips" and that it used "unrepresentative DLP images to demonstrate the purported superiority of 3LCD projected images."

Certain claims appear on Web sites directed to individuals in foreign countries. NAD found that claims made on foreign Web sites are not considered U.S. national advertising where there is a good faith effort to control traffic to limit the content to foreign consumers. To the extent iterations of the same claims appear in media directed to U.S. consumers (or on the global homepage), NAD's review would be appropriate and its recommendations applicable.

According to NAD's statement, issued Monday, "Following its review of the evidence, NAD decided that, within the context of its marketing materials communicating information on underlying technology to third parties and salespersons, the advertiser [Epson] provided a reasonable basis for its claims about color break-up and single-chip DLP technology. NAD recommended, however, that Epson discontinue a claim that color break-up in DLP projectors 'can be very distracting to some viewers.'

"NAD also found that the advertiser provided a reasonable basis for claims that characterize its 3LCD panels as 'chips.' The Division recommended, however, that Epson modify its advertising to avoid unqualified claims that the benefits of 3LCD technology are due to the greater number of chips or that the 3LCD and DLP products share the same design.

"NAD determined that the advertiser provided a reasonable basis for certain color performance claims, including its description of its own technology as 'full-time color.' However, to avoid a misleading comparison or a falsely disparaging message, NAD recommended that the advertiser discontinue claims that single-chip DLP delivers only 'part-time color.'

"Lastly, to avoid confusion in any depiction of side-by-side images, NAD recommended certain modifications to more clearly disclose that such images are intended to depict particular features of the technology, and not the comparative performance of the projectors, generally.

"NAD determined that Epson adequately substantiated its claim that the optical engine in 3LCD projectors contains no moving parts and can be referred to as 'solid state.'

"NAD didn't agree with TI that Epson's grayscale claims can only be supported by means of survey evidence of consumer perception and found that Epson provided a reasonable basis for its depictions and descriptions of the technical differences in grayscale performance between DLP and 3LCD-based projectors. However, NAD noted that the evidence in the record did not support the disparaging claim that DLP projectors have 'poor grayscale performance.' Therefore, NAD recommended that Epson discontinue that claim."

Epson officials said the company would "take into consideration NAD's thoughtful suggestions in future advertising." The inquiry was conducted under NAD/CARU/NARB Procedures for the Voluntary Self-Regulation of National Advertising.



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