This Wednesday AT&T and Verizon's lawsuits was made interesting changes because AT&T and Verizon have agreed to drop the lawsuits against each other. A U.S. District judge on Wednesday denied AT&T’s request to force Verizon to pull its “There’s A Map For That” and “Island of Misfit Toys” commercials, saying that while the ads might be “sneaky,” they are not deceptive. This changed the entire crisis story for Verizon!
U.S. District Judge Timothy Batten said, “People might misunderstand [Verizon’s commercials], but that doesn’t mean they’re misleading.” Nevertheless, he agreed to give AT&T another chance at a Dec. 16 hearing. AT&T and Verizon shortly announced that they would drop the litigation.
In this article, I will talk about what is going on in the media, how it affects the stakeholders, as well as the two companies' crisis responses and their crisis strategies.
What's Going On In The Media:
The lawsuit was started by AT&T claiming the "irreparable harm" to AT&T due to Verizon's "misleading" commercials. Verizon filed their suit which is not directly related to the map argument but can be detrimental to AT&T. They requested the courts to rule its claims of "most dependable 3G network" were true (www.engadget.com).Later AT&T escalated the issue in the media as Luke Wilson responded in an ad comparing AT&T and Verizon wireless services.
A few links to AT&T's new commercials:
AT&T's Luke Wilson Two Phone Commercial: Luke Wilson talked about how multi-taskers cannot use Verizon phone to call and surf online at the same time. They needed two phones. There was a man in the background trying to multi-taks using two phones. He cannot. At the end of the video, a background voice said "When you compare, there is no comparison" to defend AT&T's faster speed. http://www.youtube.com/watch?v=IioSntkD8lE&feature=channel
AT&T's Marbles Commercial: Again, Luke Wilson. He talked about how Verizon would not keep phone calls and wireless usage at the same time. In the meantime, the marbles on the big Verizon map behind Luke started to fall off. As he talked, more and more marbles fell off leaving an empty Verizon map.http://www.youtube.com/watch?v=WJvUshkxH-w&feature=channel
Verizon's commercials attacked with a TRUE statement that Verizon's 3G coverage is 5 times better than AT&T geographically. While AT&T is seeking to stop these commercials in the media, Verizon is continuing its "map" campaign.
A few links to Verizon's new commercials:
Verizon's Island of Misfit Toys Commercial (Cartoon): An iPhone ran into a group of misfit toys for the Xmas. The gifts said, "you must be popular. Why are you here?" The iPhone sadly showed its "map" with low AT&T coverage. Then the toys said, "you are then welcome here", indicating AT&T poor 3G coverage can go nowhere, even with iPhone. Again, Verizon Slapped AT&T at its face and banished iPhone in its commercial which cleared the earlier rumor about the coorperation between Verizon and Apple. http://www.youtube.com/watch?v=4JgrBtn8XdU&feature=player_embedded
Verizon's Reindeer Commercial: Santa Clause was getting ready to ship gifts to children in a blizzard night. He went to ask if his reindeers were ready. Well, one of them was not because his "map" showed a poor coverage. http://www.youtube.com/watch?v=xup4tGGstgM
While the two companies were busy with spending money on new commercials attacking each other, they were losing their positive images in the mind of their stakeholders. From the on-line posts and comments, there were complaints about both services. Many see the commerical war as "a waster of money and time" and start to view the two companies as not trustworthy since they both have weaknesses (Verizon: wireless speed and AT&T: wireless coverage). This arguement can be going on for a long time without touching anything. Their stakeholders may lose their interest soon, and still stay with the service they have. The marketplace may even get affected by this dispute so that new customers reject wireless service due to its irreliable service providers. This is a war and both hurt.
Crisis Responses:
Initial Response to the Lawsuit from Verizon's rep Nelson
Neslon shared some brutal comments:“This is a junk lawsuit. It has no merit. It’s surprising that rather than defend the ‘blue’ hot spots on their 3G map, our competitor instead focuses on their white spaces. The maps clearly note that the comparisons are of 3G service, and further note that voice and data services are available in other places...AT&T did not file this lawsuit because Verizon’s ‘There’s A Map For That’ advertisements are untrue; AT&T sued because Verizon’s ads are true and the truth hurts."
Nelson's response was very fierce and straight-forward. He mainly relied on accusing the attacker as his main strategy and supplemented with bolstering his message that Verizon told the truth. Although this statement was a little bit impolite, it reached to the stakeholders well in that it conveyed a very clear message that Verizon excelled AT&T at its 3G coverage. Now that the court favored Verizon, this gave the company a good opportunity to reinforce its message and to bolster the company's image as a better service provider.
Initial Response to the Denial by court from AT&T rep Mark Siegel
“While we are disappointed with the court’s decision on our request for a temporary restraining order, we still feel strongly that Verizon’s ads mislead consumers into thinking that AT&T doesn’t offer wireless service in large portions of the country, which is clearly not the case. We look forward to presenting our case to the court in the near future."
In this statement, the spokesperson was very clear about the company's attitude. He used words like "still""strongly""clearly not" to bring stakeholders' attention back to the severity of the issue. He concluded by the company's future action, which showed consistency with his previous messages. All in all, the message was clear, delivered in time, and showed consistency. Later after the statement, AT&T decided not to pursue legal remedy regarding this issue on its Dec 16th suit. Here the message was however inconsistent with the previous ones. This may derive from the actions Verizon had taken. According to Digital Daily, Verizon has also dropped their lawsuit against AT&T. This may suggest that AT&T and Verizon must have "talked," no matter if it was informal or formal. This is a sign that they have come to a mutual agreement to drop their legal battle that promoted nothing but both of their weaknesses.
This brought me another interesting thought about crisis communications between competitors. Sometimes, competitors bonded or "forgave" each other for mutual benefits. These lawsuits and even the ads have been seen by many people as "a waste of time and money" and "a generator of bad publicity" for the companies. If the battle resumes, both get hurt. If the battle ceases, both survive. Therefore, in terms of crisis reponse strategies, both companies will use bolstering and rebuilding images. Moreover, the bolstering strategies may not heavily depend on attacking each other.
Legal knowledge of PR professionals
Although this case is yet ongoing, it teaches us a lesson about legal matters. I agree that some legal knowledge is needed for PR professionals. From AT&T's side, their legal knowledge may help them to win a better case on Verizon's "misleading" commercials. From Verizon's side, their legal knowledge has helped them to defend themselves during crises. For instance, Verizon PR understood The Lanham Act about advertising integrity, so they insisted that they were using the truth to advertise.
One additional point for AT&T people to think about. Verizon's messages have turned out to be very consistent throughout the crisis (a different opinion from my last post), while AT&T attacked multiple shortcomings of Verizon in their commercials. AT&T PRs shall watch for inaccurate information in their commercials. Or else, the misleading messages may come back and bite them some time. The best practice I can suggest here is to have their legal counsel go through the videos before putting up on youtube or organization website.
This case seems like it has the potential to be pivotal in setting precedence for PR campaign in product or service areas with a limited number of competitors. It makes me think of the PC vs MAC computer commercials. While the majority of those commercials generally aren't as blatant about making product-based allegations about PCs or Microsoft, they have made some pretty strong allusion. Specifically, I remember one that discussed the differences in virus protection.
As someone who knows next to nothing about PR or product litigation, I would be interested in knowing whether there is legal precedence on similar cases to this and what constraints such precedence offers? What other cases are available for tech-related defamation through advertisement?
Posted by Erin on November 16, 2009 at 06:20 PM EST #
To Erin's question:
The legal act that AT&T used in their plaintiff is The Lanham Act which stated that "in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act." The dilemma here for AT&T is that the content and claims in Verizon's ads were true (Verizon did have better 3G coverage). That is why the case became very tricky than other product litigation cases, I think. I will have a new blog post about this case as the two competitors ceased their lawsuits against each other.
Posted by Jing on December 04, 2009 at 01:55 PM EST #