Wednesday, September 21, 2011

Internet Provider’s Fast Service Claims Did Not Violate State Unfair Trade Practice Laws

This posting was written by Jody Coultas, Editor of CCH State Unfair Trade Practices Law.

A New York Internet subscriber could not state a New York deceptive business practices law claim against Time Warner Cable for allegedly misrepresenting the speed of its “Road Runner” Internet service, according to the federal district court in New York City.

A California Internet subscriber also failed to state a California Unfair Competition Law (UCL) claim based on violations of the California False Advertising Law (FAL) and Consumer Legal Remedies Act (CLRA).

Time Warner advertised its Road Runner Internet service as having “blazing speed,” being “always on connection,” and the “fastest, easiest way to get online.” These representations allowed Time Warner to charge up to more than 100% of the fees charged by competitors, according to the subscriber.

However, Time Warner failed to disclose that it interfered with and limited subscribers’ access to their Internet connections and their attempts to engage in peer-to-peer communications.

New York and California subscribers sought to represent a class of all Road Runner service customers.

In response, Time Warner argued that the service agreement included express provisions permitting the network management practices at issue. The company further argued that the statements at issue were mere puffery and not actionable under either the New York or California laws.

To state a claim under the New York law (New York General Business Law Sec. 349), the subscriber had to show that the challenged advertising was directed at consumers, the advertising would mislead a reasonable consumer in a material way, and that the subscriber suffered an injury as a result of the advertising. To state a UCL claim under the unlawful prong, the subscriber needed to show that the company violated another law.

While some of the statements were puffery, others could be actionable. However, the claims failed because there was no evidence that the Internet connection was not always available or that the speed of the service was slower than competing services, according to the court.

The decision in Fink v. Time Warner Cable will appear at CCH State Unfair Trade Practices Law ¶32,322.

Further information about CCH State Unfair Trade Practices Law appears here.

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