DirecTV in $4bn legal battle

A California court has started hearing evidence into an alleged claim that DirecTV has deliberately misled millions of subscribers about the actual costs of viewing programming.  The action has been brought by the USA’s Federal Trade Commission (FTC). In essence, DirecTV is alleged to have advertised and promoted an annual – and discounted – fee to new subscribers without clearly stating that subscribers had to take out a two-year deal, and which increased by up to $45 a month during Year 2.

The action commenced back in March 2015 with the FTC arguing that the pay-TV broadcaster violated its rules. The FTC says that between 2007-2015 some 33 million households signed up for DirecTV.

The FTC, in its writ before the court, alleges that “DirecTV also fails to disclose that its offer of free premium channels for three months is in fact a negative option continuity plan that requires consumers to proactively cancel to avoid automatic charges on their credit or debit cards.”

“DirecTV misled consumers about the cost of its satellite television services and cancellation fees,” said FTC Chairwoman Edith Ramirez. “DirecTV sought to lock customers into longer and more expensive contracts and premium packages that were not adequately disclosed. It’s a bedrock principle that the key terms of an offer to a consumer must be clear and conspicuous, not hidden in fine print.”

The action argues that in one form or another DirecTV has “in many instances” violated FTC rules since 2007.

The court will hear that DirecTV, in 2010, settled with 49 States their own enforcement actions over advertising practices.

What is now being argued is that the on-screen hyperlink references, made available to subscribers by DirecTV, and which would ‘pop up’ when a user scrolled over the information, was an adequate method of informing subscribers meant that the information/contract was adequately explained.

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