Palm and FTC Reach Settlement on Ads
Recently, the Federal Trade Commission complained that some of Palm's ads didn't make clear enough that the features being advertised were available on some, but not all, of its handhelds. Palm and the FTC have announced a proposed settlement today. There are no fines or other punishments leveled against Palm. The company has agreed to "disclose, clearly and conspicuously, when consumers have to buy add-ons in order to perform advertised functions", and that's all.
The FTC said that Palm ran ads that didn't make it clear enough that only some of its models have built-in wireless modems. The rest require either a dedicated wireless modem or a separate mobile phone to act as a modem.
Palm doesn't appear to have learned from Microsoft's mistakes. Last year, it and H-P were accused by the FTC of doing the same thing in ads for the Jornada and reached the same sort of agreement, though they were required to run large advertisements clearing up any misconceptons, which Palm does not have to do.
Palm is also required to make it more obvious that a paid subscription to Palm.Net is required to access the Internet with its wireless models and stop advertising that its wireless service is "available everywhere or almost everywhere in the United States."
The FTC also said Palm's ads didn't make it it clear that while some of its handhelds come with software for accessing Microsoft Word and Excel files, not all do.
"Palm does believe that we have appropriately disclosed service and additional requirements, but we are happy to make the disclosure in larger type and more explicit language," a Palm representative told Cnet
The Commission vote to accept the proposed consent agreement for public comment was 5-0. The agreement will be subject to public comment for 30 days, until April 5, after which the Commission will decide whether to make it final.
A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.
Thanks to Moosecat for the tip. -Ed
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