Eircom DSL Ad - Possible ASA complaint?

bk

Eircom have a banner ad on their home page www.eircom.ie
(you might need to reload the page once or twice to see it).

Screen shot attached (97K)

The ad has three screens:

1) eircom to introduce ...

2) Broadband DSL service at EUR45 per month

3) Click here for more information

When you click on the ad it brings you to the Eircom DSL press release from a few weeks ago.

Surely this is wrong,

1) the product hasn't been released yet
2) wholesale prices haven't been agreed yet
3) they are advertising the price excluding VAT.

Should a complaint be made to ComReg and the ASA?

Would anyone with experience of making complaints to these organisations, like to take up this matter?

eth0_

They're entitled to advertise the price without VAT AFAIK as long as there's a 'excluding VAT' disclaimer'.

bk

Originally posted by eth0_
They're entitled to advertise the price without VAT AFAIK as long as there's a 'excluding VAT' disclaimer'.

There is no disclaimer on the actual ad, only on the press release. This is false advertising, the only question is does it constitute advertising?

The consumer association might also be interested in this.

SkepticOne

Originally posted by bk
There is no disclaimer on the actual ad, only on the press release. This is false advertising, the only question is does it constitute advertising?

The consumer association might also be interested in this.

I have contacted them. This is the sort of thing they deal with. They deal with all ads (web or otherwise) if they are misleading. Get your complaints in:

From their website:

European Communities (Misleading Advertising) Regulations, 1988

The European Communities (Misleading Advertising) Regulations, 1988 empower the Director to request any person engaging or proposing to engage in advertising which is misleading to discontinue or refrain from such advertising. It is open to any person including the Director of Consumer Affairs to apply to the High Court for an Order prohibiting the publication or further publication of advertising which is misleading.

Ex VAT prices on advertising for consumer services is misleading. Therefore:

Write to:
Office of the Director of Consumer Affairs,
4 Harcourt Road, Dublin 2
Or
Office of the Director of Consumer Affairs,
89-90 South Mall, Cork

Enquiry Line:
402 5555 (01 area), 1890 220 229 (outside 01 area)

Fax Number:
01 4025501

Email:
odca@entemp.ie

Saruman

Seems missleading enough to me... report away!!

However its not an ad for a product since the product does not exist yet. Its an Info banner letting you know this will happen in the near future so i dont think you can do them for false advertising.. However it does have price ex vat! But it does not let us know its Ex vat!!!

Also i noticed its advertised at I-Stream.. as i understand it this is a new product and not called I-stream.. so why are they advertising their current ADSL offering if its not going to be reduced in price???

SkepticOne

Originally posted by Saruman
However its not an ad for a product since the product does not exist yet. Its an Info banner letting you know this will happen in the near future so i dont think you can do them for false advertising.. However it does have price ex vat! But it does not let us know its Ex vat!!!

I view it as an ad for a non existant product, which is misleading. Con men use this tactic to draw in customers so that they can sell a different product at a different price - the old "bait and switch".

Of course, I'm not suggesting for a minute that Eircom would engage in such activity.

"Yes, the product is not available right now because ComReg is holding us up, but have you considered a hi-speed line?"

I'm not suggesting that Eircom would try this.

bk

Originally posted by Saruman

However its not an ad for a product since the product does not exist yet. Its an Info banner letting you know this will happen in the near future so i dont think you can do them for false advertising..

Yes, but surely this is unfair on the likes of Esat, IBB, IrishWISP and Leap.

As the above companies actually have real products they have to advertise including VAT.
This makes it look like they are more expensive then Eircom. Maybe a complaint should be made to the competition authority, as this is clearly an unfair competitive move.

theking

How about this:

Hello there,

I'd like to complain about the misleading advertisement on the homepage of eircom's website (www.eircom.ie). This banner ad states that eircom is to launch what they describe as a "mass market" (on http://mmm.eircom.ie/about/PressReleases/PressRelease.asp?id=397) DSL service.

However the price quoted is in fact the ex VAT. In the past they have argued that their DSL service marketed as i-stream is a business rather than a residential service, and that therefore ex-VAT pricing is acceptable. As they themselves have described this new price as applying to a mass market, they are under an obligation to ensure that it is not misleadingly priced in advertising.

I hope that you will be in a position to contact eircom regarding this.

Yours sincerely,

Me

Ardmore

Been there done that!

I contacted the ODCA about the ex-VAT issue on the original announcement. They said that anything to do with Eircom was the responsibility of ComReg. ComReg said to contact the ASAI.

Hornet

(Disclaimer: I have NO affiliation with Eircom, apart from being an Eircom customer.)

I start with the Disclaimer before you will start a flame war!

If somebody does something which is against a law or against a consumer right, everybody has the right to report it. So go ahead and report it.

BUT:
What is it you achieve?

Eircom has the right (like every other company) to pre-announce any product they like. They could still withdraw the product at a later stage or could be stopped by ComReg or others, but they can still tell you that soon you will be able to get product xyz.

Every company has the right to choose the name they want to choose. "i-stream" or "Broadband ADSL" or "Piece of wet string" it is their decision. They can even call it "i-stream" today and "High-Speed" tomorrow.

So no matter if we like it or not, there is not much that can be done about that.

The only valid point for complaints is probably the VAT issue. So if you complain, Eircom might have to add in VERY SMALL print "(excludes VAT)". Don't get me wrong, I am of the opinion that NO price EVER in ANY publication should be quoted without VAT (unless it is a trade only magazine/newspaper/website), but is the excitement about this VAT issue not a little bit over the top?

Ardmore

Originally posted by Hornet
[BThe only valid point for complaints is probably the VAT issue. So if you complain, Eircom might have to add in VERY SMALL print "(excludes VAT)". [/B]

No, if it's aimed at the residential market, the price isn't €45 exVAT, it's €54. No ifs ands or buts. You can't say €27 with *2 in very small print, because it's misleading.

From the ODCA website The Prices and Charges (Tax - Inclusive statements) Order, 1973 requires that all retail prices marked on goods or prices displayed or quoted at the retail level and all charges for services displayed or quoted should be tax-inclusive (e.g. VAT) except where it is intended solely for a business customer.

Hornet

Originally posted by Ardmore
No, if it's aimed at the residential market, the price isn't €45 exVAT, it's €54. No ifs ands or buts. You can't say €27 with *2 in very small print, because it's misleading.

From the ODCA website The Prices and Charges (Tax - Inclusive statements) Order, 1973 requires that all retail prices marked on goods or prices displayed or quoted at the retail level and all charges for services displayed or quoted should be tax-inclusive (e.g. VAT) except where it is intended solely for a business customer.

Even better, I am totally for this way of showing prices! In that case, the advertisemend should be changed to EUR54. I still think complaining is right and just and important, but let's not loose sleep over it.

BTW (Off-topic): Checking out the web site you quoted, I found it interesting, that there seems to be no Price Display Orders for anything else but pubs, restaurants, hairdressers and filling stations. Does that mean all shops can do whatever they want and display if they want (as long as the VAT is included in a price they show) or not if they don't feel like it??? Strange!!!

Edit: Just found the section about Retail Prices, which I was searching for a LONG time. Thanks Ardmore for pointing me in the right direction.

Dustaz

Originally posted by Hornet
but is the excitement about this VAT issue not a little bit over the top?

No its not. Its a breach of the advertising standards code and its something eircom do consistantly.

In a recent thread i made it clear that trying to stop this in press releases was a bit of a dead end, but this is a completly different matter. This is false advertising full stop.

Once this dsl product hits the streets we should go after the name Hi-speed imo

oscarBravo

Originally posted by Hornet
Eircom has the right (like every other company) to pre-announce any product they like. They could still withdraw the product at a later stage or could be stopped by ComReg or others, but they can still tell you that soon you will be able to get product xyz.

BUT!! They are advertising a non-existent product, with a retail price, for which they have not negotiated a wholesale price!

This may not be illegal, and there may not be any specific regulatory issue with this particular ad per se, but it still stinks.

Hornet

Originally posted by oscarBravo
BUT!! They are advertising a non-existent product, with a retail price, for which they have not negotiated a wholesale price!

This may not be illegal, and there may not be any specific regulatory issue with this particular ad per se, but it still stinks.

From a factual point of view it is for me similar to a situation where a car company announces a car and advertises for it (WITH a price), but I can't get it because it is either not on the market or not on the Irish market. There is a price, there is a feature description, they create a demand, but I still can't have it.

The wholesale price aspect doesn't fit into that analogy, but why should the wholesale price negotiation stop a pre-announcement? We know that the wholesale price will probably be below the EUR54, but you as an end user will never get the product for the wholesale price anyway. Should, as a consequence, Eircom not be allowed to inform you about an upcoming service offering because Esat is not advertising it yet???

If I am close to signing a 12 month contract for an available service and 2 months later a lower priced service will be available that would have suited me perfectly well, I would be very annoyed! As long as Eircom advertises WITH VAT, I have no objection against the ad!

I know I am not making friends here, but I think the discussion about anything Eircom does is very often more emotional than factual. Eircom can only be beaten with facts, not with emotions/disgust/hatred/frustration/....

Yes, let it out if you have enough, it is good to talk about it. But soon after that we should use our intelligence and think about what we can do to improve the situation that drove us mad in the first place. Eircom changing an ad or even stopping an ad campaign doesn't help you in the slightest!

The name "Hi-Speed" is a joke, we all know that. But where are the web sites, posters, journalist-lobbying-campaigns that ridicule Eircom. I hear Joe Bloggs on a regular basis talking about "I got a Hi-Speed line installed." We haven't reached these people with a correction of their misconception we won't if we waste time getting all excited about a stupid ad.

santalives

at any point does the ad say that it is aimed at res customer's above that of business? just as a matter of interest

pete

Uhh dunno if this has been pointed out already - but an eircom banner on the eircom site is not classified as advertising by the ASAI. It's only advertising when it's paid for.

The Code of Advertising Standards applies to commercial advertisements, i.e. those which promote the sale of a product or service. The Code defines an advertisement as a paid-for communication addressed to the public or a section of it. It is characteristic of an advertisement that the advertiser engages media to communicate a commercial message.

Non-commercial advertisements, i.e. those which express the advertiser's position on a political, religious, industrial relations, social or aesthetic matter or an issue of public concern, are not subject to the Code.

http://www.asai.ie/

edit: see also http://www.boards.ie/vbulletin/showthread.php?postid=659029#post659029

spongebob

Originally posted by pete
Uhh dunno if this has been pointed out already - but an eircom banner on the eircom site is not classified as advertising by the ASAI. It's only advertising when it's paid for.

http://www.asai.ie/

quote:

---

The Code of Advertising Standards applies to commercial advertisements, i.e. those which promote the sale of a product or service. The Code defines an advertisement as a paid-for communication addressed to the public or a section of it. It is characteristic of an advertisement that the advertiser engages media to communicate a commercial message.

see also http://www.boards.ie/vbulletin/showthread.php?postid=659029#post659029

Correct. As they are apparently advertising their own product (in fact the banner as links to the press release) the ASAI will baulk at investigating it.

On a technicality, Eircom.NET appears to have placed the ad with Eircom Retail.... another entity. That is what you must complain about. Eircom.NET would have had to pay for this AD, otherwise Eircom retail were cross subsidising them.....that wouldn't happen here .....naaaahhhhhh

M

Victor

The "Click here for more information" may defeat the argument, does it equate to "conditions apply". I would argue not, as price is a fundamental part of a contract, a condition is not.

Originally posted by pete
Uhh dunno if this has been pointed out already - but an eircom banner on the eircom site is not classified as advertising by the ASAI. It's only advertising when it's paid for.

So can say Dunnes Stores advertise bread for €0.01 (in reality say €0.90 in shop) on their website and not get done for it?

I-stream appears to be only on the residential section of the website, not the business section.

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I did find this pic interesting (very little degradation on my behalf, but view at full size). I wouldn't like a DVD with that quality.

sceptre

Originally posted by Victor
I did find this pic interesting (very little degradation on my behalf, but view at full size). I wouldn't like a DVD with that quality.

Now that's funny. Attachment saved for next time I'm feeling blue:D

SkepticOne

Originally posted by Hornet
Yes, let it out if you have enough, it is good to talk about it. But soon after that we should use our intelligence and think about what we can do to improve the situation that drove us mad in the first place. Eircom changing an ad or even stopping an ad campaign doesn't help you in the slightest!

The name "Hi-Speed" is a joke, we all know that. But where are the web sites, posters, journalist-lobbying-campaigns that ridicule Eircom. I hear Joe Bloggs on a regular basis talking about "I got a Hi-Speed line installed." We haven't reached these people with a correction of their misconception we won't if we waste time getting all excited about a stupid ad.

Your point seems to be why do these lame things when you should be doing other more important things. Well, here's an idea: why don't you design a website aimed at dispelling the myths about hi-speed among the joe blogs types. Post a link to it in a separate thread and then people can suggest changes and additions to it. When it is up to a reasonable standard then it can be promoted among the joe blogs publications (Sun, Star, Irish Independent etc.) By doing this you would be contributing in a positive way.

Ardmore

Originally posted by Hornet
From a factual point of view it is for me similar to a situation where a car company announces a car and advertises for it (WITH a price), but I can't get it because it is either not on the market or not on the Irish market. There is a price, there is a feature description, they create a demand, but I still can't have it.

Not even remotely the same - car companies don't have monopolies, and they aren't specifically required by the regulator to enable competitors to enter the market before they sell or advertise the product.

Eircom aren't allowed to sell or advertise this new product until there is a wholesale agreement in place. They might squeak by on the letter of the law by claiming that they are "advertising the existence of a press release", rather than advertising a product (there is no product), but there is no question that they are breaking the spriit of the regualtion.

The wholesale price aspect doesn't fit into that analogy, but why should the wholesale price negotiation stop a pre-announcement?

Because Eircom are legally required to have an agreement in place before they sell or advertise the service themselves (so that thay can't sew the market up before anyone else can enter the market place).

We know that the wholesale price will probably be below the EUR54, but you as an end user will never get the product for the wholesale price anyway. Should, as a consequence, Eircom not be allowed to inform you about an upcoming service offering because Esat is not advertising it yet???

ESAT, UTV and others aren't advertising it yet, because they can't - they don't know what it's going to cost them, or what restrictions will be in place. That's why the regulations require that the Wholesale price be "cost oriented", and not based on whatever retail price Eircom think the market will bear, but unfortunately, the ODTR seems to have ignored that particular aspect of the regulations when allowing Eircom to set a "cost oriented" wholesale price that was multiples of that arrived at in other comparable markets (eircom use the same ADSL equipment as telcos in other countries, and pay the same price for it).

If I am close to signing a 12 month contract for an available service and 2 months later a lower priced service will be available that would have suited me perfectly well, I would be very annoyed! As long as Eircom advertises WITH VAT, I have no objection against the ad!

Oh yeah, right - Eircom are letting you know in advance so that you will put off signing up for €108 a month. They really just have your best interest at heart! The fact that they are abusing their monopoly position to disadvantage the other telcos (possibly preventing them bringing out a €49 product) has absolutely nothing to do with their behaviour!

Eircom can only be beaten with facts, not with emotions/disgust/hatred/frustration/....

And the fact is that is is against the law for Eircom to advertise ADSL for €45. The question is whether that is what they are doing. There is no question that that's what they want some people to think that they are doing - they wouln't be doing it otherwise.

santalives

muck why would eircom.net be paying for the product, it has nothing to do with them. dsl is an eircom ireland product so they can put it on their own site as it is not a seperate entity

bk

Originally posted by santalives
muck why would eircom.net be paying for the product, it has nothing to do with them. dsl is an eircom ireland product so they can put it on their own site as it is not a seperate entity

While I'm not Muck , I think I can answer that question.

Eircom Telco will be selling the wholesale bitstream product to various ISPs, but not to the regular consumer.

Eircom.net is the ISP that will be reselling Eircom Telcos service to the general consumer.

And this is where the problem lies, Eircom.net and Telco are supposed to be seperate entites. Eircom Telco is supposed to set its price based on it's own cost, not what Eircom.net wants to charge for it.

This brings up an interesting thought, is this evidence of colusion between Eircom Telco and Eircom.net, how can Eircom.net predict what price to will charge for any service unless Eircom Telco has already given them a ball park figure?

SkepticOne

The current (retail) i-stream service is sold by Eircom not Eircom.net, the ISP. I would expect this to continue for the new product but I'm not sure.

I don't think there's any regulatory requirement for separation of of ISP and parent SMP telco. I believe that all that is required is that the retail offering must have an associated wholesale offering and that this wholesale offering must be cost oriented and there must not be margin squeeze. I believe that the ISP is only important insofar as it is a 'retail ARM' of the telco. That's just my current understanding. Contact ComReg for the precise regulations.

Hornet

Originally posted by SkepticOne
Your point seems to be why do these lame things when you should be doing other more important things. Well, here's an idea: why don't you design a website aimed at dispelling the myths about hi-speed among the joe blogs types. Post a link to it in a separate thread and then people can suggest changes and additions to it. When it is up to a reasonable standard then it can be promoted among the joe blogs publications (Sun, Star, Irish Independent etc.) By doing this you would be contributing in a positive way.

Not a bad idea, SkepticOne! However, if you would know my HTML capabilities, you would re-consider.

But seriously: In my day job, I am trying to contribute in a positive way to the "overpriced bandwidth" issue. Unfortunately not directly for end customers, but there will be a ripple effect... It is the wrong time (and the wrong forum) to share details, but I shall give some pointers in the right direction in the near future.

Coming back to your idea with the website: If somebody would take that job on, I would be happy to help with input.

BTW: I am not trying to weasle my way out of what I am asking others to do, but I think my contribution to the issue in my day job is far greater than a website "designed by Hornet" would ever be.

-Hornet

spongebob

Originally posted by bk
While I'm not Muck , I think I can answer that question.

This brings up an interesting thought, is this evidence of colusion between Eircom Telco and Eircom.net, how can Eircom.net predict what price to will charge for any service unless Eircom Telco has already given them a ball park figure?

exactly BK. Eircom.net must buy it off mammy (Retail) at the yet to be agreed wholesale price.

M

Hornet

Originally posted by Ardmore
Eircom aren't allowed to sell or advertise this new product until there is a wholesale agreement in place. They might squeak by on the letter of the law by claiming that they are "advertising the existence of a press release", rather than advertising a product (there is no product), but there is no question that they are breaking the spriit of the regualtion.

In my opinion, the regulation in this case is to protect other competitors (and rightly so!!!!), but the end customer doesn't benefit from this aspect of the regulation. I guess, if you would want to have the product urgently enough, you would take it (emotional issues aside) from the next best, or from the lowest priced provider.

We see with Eircom's and Esat's ADSL offering that the wholesale price negotiations can bring the Eircom price down, but I was surprised how the Esat price is for some flavours significantly above the Eircom price. I was not surprised by the fact that Eircom didn't leave Esat any margin to manouvre, but by the fact that Esat is brave enough to offer a product for a HIGHER price.

(I am comparing the uncapped Eircom 1M/256k offering for 165+VAT with Esat's uncapped 1M/256k offering for 205+VAT.

Because Eircom are legally required to have an agreement in place before they sell or advertise the service themselves (so that thay can't sew the market up before anyone else can enter the market place).

Makes a lot of sense and is the right type of regulation, but experience shows that it delays the introduction quite a bit, which is not advantageous for end users. How is the general feeling about that?

That's why the regulations require that the Wholesale price be "cost oriented", and not based on whatever retail price Eircom think the market will bear, but unfortunately, the ODTR seems to have ignored that particular aspect of the regulations when allowing Eircom to set a "cost oriented" wholesale price that was multiples of that arrived at in other comparable markets (eircom use the same ADSL equipment as telcos in other countries, and pay the same price for it.

That's what you would think, but it is incorrect!!! Eircom was double clever on this! While the DSL equipment is very low price and is not different to other markets, Eircom has built a Rolls-Royce backhaul network dedicated for DSL. As a consequence they were in fact able to justify the prices as "cost oriented" and the ODTR couldn't do much against them.

The Rolls-Royce backhaul network is a separate, completely independent network right beside other Eircom networks. It is TOTALLY underutilised and I would bet my last cent that it won't be long (or wasn't long) after the ODTR price approval when they started discovering "unexpected" synergies. The blame the ODTR has to take is for not checking deep enough into the issue. (Imagine Hans Blix would just LOOK at the buildings that are allegedly used for weapon storage.)

So the prices are justifiable, but the methods for achieving these price models are more than dubious!

Oh yeah, right - Eircom are letting you know in advance so that you will put off signing up for €108 a month. They really just have your best interest at heart! The fact that they are abusing their monopoly position to disadvantage the other telcos (possibly preventing them bringing out a €49 product) has absolutely nothing to do with their behaviour!

No, they couldn't care less about my "best interest" and they are certainly not advertising the lower priced product so that I can postpone my puchase decision. But the bottom line effect is still that the end user can re-think an imminent decision if he knows early. So the motives are not honerous, but the effect is positive (for the end user).

I said it before in this or in another forum: Eircom is using and abusing the monopoly situation. If there is a loophole they can use, they will. If they can screw you or their competitors, they will. If they can get an advantage over their competitors they will do whatever they can to achieve that. I am NOT defending this or any other monopoly. Emotionally I am in all what you are saying totally on your side.

But we should look at all the issues in a logical and less emotional way. A fight David against Goliah (sp?) can only be succesful if you think and choose the weapons right. If not, the monopoly will steam-roll you. That's where we differ.

-Hornet

santalives

eircom istream is not a eircom net product full stop, they use the eircom net infrastructure to connect people to the net but that is it. eircom net do not sell the product eircom ireland sell the product. Eircom net are not buying the product from eircom ireland, in this case it is actually the other way around Eircom Ireland are paying eircom net for use of their service.

jd

Originally posted by santalives
eircom istream is not a eircom net product full stop, they use the eircom net infrastructure to connect people to the net but that is it. eircom net do not sell the product eircom ireland sell the product. Eircom net are not buying the product from eircom ireland, in this case it is actually the other way around Eircom Ireland are paying eircom net for use of their service.

That is my understanding too. Eircom Retail buy a wholesale product off the infrastructure side, then they pay eircomnet money for the ip connectivity, use of mail servers etc..Eircomnet don't bill you for adsl
jd