Friday, March 17, 2017

Slingbox's addition of ads wasn't deceptive

In re Sling Media Slingbox Advertising Litig., 202 F. Supp. 3d 352 (S.D.N.Y. 2016)

Plaintiffs sued Sling under California law, and in the alternative under the consumer-protection laws of forty-seven other jurisdictions, including under New York General Business Law § 349, based on Sling’s addition of ads to its Slingbox service allowing consumers to watch their home TVs from internet-connected devices. In late 2014, for the first time, Sling began adding its own ads “after product startup,” as well as “alongside streamed ... content.” Plaintiffs were unhappy and sued for deceptive failure to disclose that ads would be added.

Although the EULA said the agreement was governed by California law, that didn’t give Slingbox purchasers outside of California the right to bring California consumer-protection claims. New York plaintiffs had to proceed under GBL § 349.  This requires the plaintiff to show a consumer-oriented act or practice that is deceptive or materially misleading, as well as injury.  There were no affirmative misstatements alleged. Omissions are actionable “where the business alone possesses material information that is relevant to the consumer and fails to provide this information.” But plaintiffs failed to plead facts sufficient to make it plausible that Sling possessed knowledge of a plan to disseminate advertising at the time they purchased their Slingboxes.

Nor did the complaint sufficiently allege materiality. According to the complaint, consumers buy Slingboxes to: (1) watch live or recorded programming that they have already purchased from a cable or satellite provider; (2) on another device; (3) anywhere in the world.  The complaint didn’t allege facts about the Sling ads—how often they show up, can they be skipped or otherwise avoided, etc. The complaint didn’t even allege that, at the time of purchase, plaintiffs knew they were getting an ad-free experience.  Finally, there were no allegations of actual injury, and adding ads “may be beneficial, detrimental or of no consequence based on consumers’ personal tastes, likes, or dislikes.”  Plaintiffs argued they wouldn’t have bought the Slingboxes or would have paid less for them if they’d known the truth, but that isn’t enough under New York law.  Small v. Lorillard Tobacco Co., Inc., 94 N.Y.2d 43, 56, 698 N.Y.S.2d 615, 720 N.E.2d 892 (1999) (stating consumers who buy a product that they would not have purchased absent deceptive conduct, without more, have not suffered injury).

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