10. april 2019

Misleading marketing in the jungle of IoT-products

Supply of connected products and services is ever evolving, and consumers steadily get new opportunities to cover their needs with such products. Fridges, alarm systems, and cars are among all that can be connected to the internet. The possibilities are many; so are challenges for consumer protection.

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Bildet viser en hånd med en smartklokke på.
FOTO: Rawpixel/Pexels

Connected products are often marketed with claims of being able to meet practical needs in the consumers’ everyday lives. More and more people purchase such products, despite not knowing much about the technology behind them. Connected products are under constant development, and functionality may be changed through software updates. This requires precautions for contract terms and marketing.

‘Consumers are entitled to understandable and sufficient information on the product they’re considering. The information requirements set out in the Marketing Control Act are strict. Consumers have the right to be properly informed from the first marketing impression’ says Elisabeth Lier Haugseth, Director of the Consumer Authority.

The Consumer Authority has now created a webpage containing good advice for both well-established traders and start-ups on the law that applies to connected products and services. It includes easily available information on what they should consider when they advertise their products, and on requirements for transparent and balanced contracts.

‘We want to have a good dialogue with traders to make it easier to comply with the law. In addition to informing technology companies about the law we supervise, we welcome questions and input from traders’ says Haugseth.

Se the website for connected products here.

Questions Tesla on its marketing of Autopilot and Summon

The Consumer Authority recently opened a case with Tesla on its marketing of the add-on service Autopilot and the parking assistant Summon. The case was taken following a media report about a consumer that crashed his car when using Summon to park in a tight spot.

‘In our letter to Tesla, we have explained the importance of giving consumers a correct picture of the product’s functionality and limitations. It is the trader’s responsibility to ensure that the impression the consumer is left with from marketing corresponds with the product’s actual functionality,’ says Haugseth.

Autopilot is an optional service from Tesla which, according to the car manufacturer, enables the car to steer, accelerate and brake automatically for other vehicles and pedestrians. Based on Tesla’s marketing, it would appear that Summon can both automatically park and retrieve your vehicle. Tesla also says that Summon is suitable for  tight spots where it is difficult to enter or exit the cars, where precisely such a function is expedient.

Important limitations on the use of these features are only provided late in the online ordering process, or in the owner’s manual. The central disclaimer that tight spots reduce Summon’s precision is only given in the owner’s manual. This is material information that consumers need in order to make an informed decision when considering to buy the service.

‘Cars are becoming increasingly more advanced, with a wealth of features connected to the internet. A car is costly, and has a big potential to cause damage. It is essential that marketing of their smart features does not exaggerate the possibilities, or downplays their limitations.’ says Haugseth.

She adds: ‘This is a question of safety and trust for consumers.’

Tesla has been requested to comment the Consumer Authority’s letter by 1 May.

Read the letter we went to Tesla here: Marketing and terms for driver assistance