The National Advertising Division of the Council of Better Business Bureaus has rapped Oracle for misleading ads comparing Oracle systems to IBM servers.
Oracle has come down on the wrong
side of an advertising watchdog organization over misleading advertising
claims, prompted by complaints from rival IBM.
TheNational Advertising
Division of the Council of Better Business Bureaus has recommended that Oracle discontinue
certain pricing and comparative performance claims for the Oracle SPARC
SuperCluster T4-4 computer system.
The NAD, the advertising industrys
self-regulatory forum, opened an inquiry into advertising claims that appeared
on the front page and in a full interior page of The Wall Street Journal, in The
Economist and on the Oracle.com Website, following a challenge from IBM.
And in an April 11 decision, the NAD recommended that Oracle provide additional
information to clarify its position vis-Ã -vis IBM.
IBM bristled over both expressed and
implied claims made by Oracle in its advertising. The expressed claims included
that Oracles SPARC SuperCluster T4-4 computer system runs Oracle & Java
twice as fast as IBMs fastest computer, which the advertising identifies as
the IBM P795 server. And that Oracles SPARC SuperCluster T4-4 system costs
$1.2 million, whereas IBMs P795 server costs $4.5 million.
The implied claims in the ad
included that Oracles SPARC SuperCluster T4-4 computer system runs all Oracle
and Java software products twice as fast as all of IBMs Power 795 server
designs (including all TurboCore mode designs). And that Oracles SPARC
SuperCluster T4-4 computer system runs all Oracle and Java software products
twice as fast as any IBM computer.
The challenged claims conveyed a
very powerful message regarding the comparative price and performance of the
SSC T4-4 and the IBM Power 795 line: for $3.3 million less, [one] could
purchase an SSC T4-4 that runs Oracle and Java twice as fast as any IBM system
in the Power 795 line, the NAD noted in its decision.
While the case appeared at first
blush ¦ to focus on complex technical issues laden with the language of
computerese, upon closer review, the NAD determined that it presented issues
similar to those the NAD examines on a regular basisexpress and implied
comparative price and performance claims, line claims and disclosures.
The NAD determined that both the
advertiser and challenger produce high-quality computer systems for businesses;
at issue was whether the advertisers superior comparative performance and
pricing claims conveyed a truthful, accurate and non-misleading message
regarding the performance and price of Oracles SPARC SuperCluster T4-4
computer systems compared with the featured IBM computer system.
In the print publications, the
advertising copy stated: SPARC SuperCluster Runs Oracle & Java Twice as
Fast as IBMs Fastest Computer.
Images of the Oracle SSC T4-4 and
the IBM Power 795 computer systems were accompanied by the following pricing
information and messaging:
The bottom of the page provided a
link to the Oracle Website: oracle.com/sunbeatsibm. No additional disclosure
was provided.
Moreover, an image of the challenged
print advertisement also appeared on the Oracle Website under the heading:
SPARC SuperCluster versus IBM, accompanied by the following bullet points:
Twice as FastSPARC SuperCluster
T4-4 runs Java Applications and Oracle Database twice as fast as IBM Power 795.
$3.3 Million Lower Purchase PriceA
sample deployment of a similar IBM Power 795 and SPARC SuperCluster T4-4 can be
$3.3 million less.
8X Better Price/PerformanceBased on
the SuperCluster T4-4 performance and price advantage, SuperCluster results in
8 times better price to performance than the IBM Power 795.
The Oracle site also offered this
disclosure:
Sources for Comparison of Systems:
Systems cost based on server, software and comparable storage list prices
(without discounts), as well as third party research. Performance
comparison based on Oracle internal testing together with publicly available
information about IBM Power 795 TurboCore system with highest processor speed
commercially available (4.25 GHz) as of Sept 28, 2011.
However, following its review of the
evidence in the record, the NAD determined that at least one reasonable interpretation
of the challenged twice as fast claim is that the SSC T4-4 runs all Oracle
and Java applications twice as fast as any IBM computer configuration in the
Power 795 linea claim that was not supported by the advertisers evidence and
could not be cured by the disclosure at the advertisers Website. The NAD
recommended that the advertiser permanently discontinue the use of claim SPARC
SuperCluster T4-4 runs Oracle and Java twice as fast as IBMs fastest
computer.
Also, to avoid conveying the misleading
message that the IBM Power 795 system costs $4.5 million, the NAD recommended
that Oracle expressly inform consumers, in the main body of the advertisement,
that a separate storage unit was included in the price.
In addition, to avoid consumer
confusion regarding future price comparisons for the SSC T4-4 and the IBM Power
795, the NAD recommended that the advertiser provide consumers with the
following information: 1) the specific model and configuration of the IBM Power
795; 2) the specific storage unit included in the price comparison; and 3) the
assumed prices for both units.
Meanwhile, Oracle, in its
advertisers statement, said the company disagreed with certain parts of the NADs
findings. Nevertheless, Oracle wishes to inform the NAD that the advertisement
at issue in this proceeding has been discontinued and Oracle does not intend to
disseminate it in that form in the future. Oracle supports the NAD and the
self-regulatory process, and will take the NADs concerns into account should
it disseminate the advertisement in the future, the company said in a
statement to the NAD.
"IBM is pleased the National
Advertising Division recommended that Oracle permanently discontinue the use of
what it described as an 'overly broad claim' that the 'SPARC SuperCluster T4-4
runs Oracle & Java Twice as Fast as IBM's Fastest Computer, IBM said in a
statement.
Oracle said it had no comment for
this eWEEK report.
Ironically, Oracle in its legal wrangling with HP, in December amended a
lawsuit against HP to include a claim of false advertisement for not telling
Oracle or its customers that HP was secretly paying Intel to continue producing
Itanium processors.
Darryl K. Taft covers the development tools and developer-related issues beat from his office in Baltimore. He has more than 10 years of experience in the business and is always looking for the next scoop. Taft is a member of the Association for Computing Machinery (ACM) and was named 'one of the most active middleware reporters in the world' by The Middleware Co. He also has his own card in the 'Who's Who in Enterprise Java' deck.
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