Sky UK: clarity over upfront costs and different fees charged to different groups

Do you need to include additional upfront costs in the main body of your ad? And how clear do you need to be about different fees being charged to different groups of consumers (eg existing vs new customers)?

The key takeaway

Advertisers must make it sufficiently clear when there are additional upfront costs. If there is material information, then this must be stated in the main text of the ad so that consumers are aware of the full costs applicable, including difference prices for different groups.

The ad

A TV ad and a page on Sky’s website:

• The TV ad, seen on 17 October 2019, included the voice-over, “Get both Sky and Netflix all in one place on Sky Q and open a world of unmissable entertainment … Sky and Netflix all in one place on Sky Q for one surprisingly low price, just £25 per month”. Prominent on-screen text at the end of the ad included “Sky and Netflix £25 a month Existing and new customers”. Smaller text superimposed at the bottom of the screen during the ad stated “Netflix part of Ultimate On Demand Pack. Upfront costs: £20: new customers; up to £219: existing”, “Requires Sky Q box connected to broadband …”, and ”Prices may change during this period. Usually: £34pm. Kit loaned at no cost. Terms apply”.
• The web page on www.sky.com, seen in November 2019, which was titled “Sky Offers and Bundles”, featured three offers under the text “Open up a world of unmissable entertainment from both Sky and Netflix with Sky Q …”. The first offer, titled “Unmissable entertainment at superfast speeds”, included the text “Sky TV & Netflix … £45 a month for 18 months Prices may change during this period Set-up cost: £39.95”. The second offer, titled “Sky TV and Netflix, all in one place”, included the text “… all on Sky Q £25 a month for 18 months Prices may change during this period Set-up cost: from £20”. The third offer was titled “The TV you love plus exclusive premieres” and included the text “£35 a month for 18 months Prices may change during this period Set-up cost: from £20”. Underneath the information about the offers, small hyperlinked text positioned to the right of the web page stated “Terms & conditions”. Below the offers, under the heading “Here’s the legal bit”, text stated “… Sky TV & Netflix: £39pm outside 18-month minimum term. ‘Sky’s Best Price’ based on lowest price for Sky Entertainment and Ultimate on Demand …Broadband: … Set up: £9.95 router deliver and £10 connection fee. Sky Talk: Compatible line required otherwise £20 connection charge may apply. Standard prices apply after 18 months …”. A number of drop-down sections appeared underneath; the first was headed “Offers”.

The complaint

The ASA received complaints that the ads were misleading because they did not make sufficiently clear that there was a set-up fee of £199 to take advantage of the offers.

The response

Sky UK Ltd (Sky) said that new customers and existing customers who had a Sky Q box would be charged a £20 set-up fee. Only existing customers who did not have a Sky Q box would be charged a £219 set-up fee. In relation to the TV ad, Sky explained that the upfront fee was explained in the on-screen text which stated, “Upfront costs: £20: new customers; up to £219: existing”. Sky said that the text was sufficiently legible, and consumers would understand that upfront costs applied to those who wanted to take advantage of the offer. In relation to the web ad, Sky said that the full information on the associated upfront fees was presented in the “Offers” section at the bottom of the page, which contained information about the set-up fees. Sky said that text was also included in the terms and conditions which could be reached by clicking on the words “terms and conditions” in the body text of the ad.

Clearcast also responded, noting that in relation to the TV ad, the superimposed text was of sufficient size and legibility to be clearly read, and was held for long enough to meet requirements. Clearcast said the set-up fees involved in taking up Sky services varied according to a customer’s particular status, such as whether they were a new or an existing Sky customer and what equipment they already had. Clearcast believed it was difficult for the advertiser to give specific information in the ad about those costs which would be meaningful to all viewers. However, Clearcast considered upfront set-up costs to be material information which needed to be included in the ad. Clearcast were content that the superimposed text “Upfront costs: £20: new customers, up to £219: existing” was sufficient to alert viewers that there were upfront costs which would have to be paid over and above the advertised monthly price. That wording gave some indication of what those costs were and made viewers aware that the costs would vary.

The decision 

The ASA upheld the complaints. The ads related to a package which enabled consumers to obtain Sky and Netflix for £25 a month. Customers needed a Sky Q box in order to take advantage of the offer. New Sky customers and existing customers with a Sky Q box would have to pay an upfront cost of £20. Existing Sky customers who did not have a Sky Q box would have to pay an upfront cost of £219.

The TV ad: The ASA considered that viewers would understand from the presentation and claims that consumers would be able to obtain Sky and Netflix for £25 a month, when delivered via a Sky Q box. The voice-over in ad (a) stated “Get both Sky and Netflix all in one place on Sky Q … for one surprisingly low price, just £25 per month”. The large on-screen text at the end of the ad which stated “Sky and Netflix £25 a month Existing and new customers” further emphasised the price claim and availability of that price to both new and existing customers. The ASA considered that the ad therefore made clear the monthly cost of subscribing to the service for all consumers. The ASA considered that in addition to the ongoing monthly cost, the set-up fees were also material information that viewers needed in order to make an informed decision about whether or not to take advantage of the offer. Given that the costs which applied to consumers differed depending on their status as a new or existing customer and whether they required a Sky Q box, the ASA held that this information needed to be clearly presented to viewers in order for them to understand the full costs that were applicable to them. Although the ad included superimposed text which stated “Netflix part of Ultimate On Demand Pack. Upfront costs: £20: new customers; up to £219: existing” and in a separate shot superimposed text stated “Prices may change during this period. Usually: £34pm. Kit loaned at no cost. Terms apply”, the ASA considered that this presentation of the costs to new and existing customers was unclear and was likely to cause confusion to consumers. The wording used in the first piece of text to describe the costs which applied to each set of customers was unclear and was likely to be misinterpreted by many viewers.

The web ad: the main body of text described three different packages available via Sky Q, which included both Sky and Netflix. In relation to the £25 per month package, text stated “Set-up costs: from £20”. Additional information about the set-up fees was not in the main text of the ad. The ASA considered that because the set-up fees constituted material information, they should have been stated in the main text of the ad so that consumers were clear as to the full costs which were applicable to their particular situation. As the full costs were stated only in a drop-down section or one click away, the ASA held they were not sufficiently prominent.

Why is this important?

Fees which are charged to different groups of consumers must be made sufficiently clear to avoid an advert being misleading. Material information such as set-up fees must be stated in the main text of ads, so consumers are clear as to the full applicable costs.

Any practical tips?

If there are additional costs, such as upfront costs or set-up fees, make this clear in the main text of the ad so that consumers are aware. If there are different fees for different consumers, and not everyone will benefit from the same offer, this also needs to be communicated clearly upfront.

Autumn 2020