When companies engage in comparative advertising, making explicit comparisons between their products and those of com-...

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When companies engage in comparative advertising, making explicit comparisons between their products and those of com- petitors, complaints of false statements and defamation are fairly common. In that sense, a lawsuit that Subway recently filed against Quiznos is not in itself unusual. Subway claimed that Quiznos made unfair and untrue comparisons about the size and meat content of one of its sandwiches and failed to disclose the fact that the larger Quiznos sandwich cost nearly twice as much as the Subway sandwich. What made this case unusual and gave it potentially far- reaching impact for business communication is the Web 2.0 angle of user-generated content (UGC). As part of its efforts to promote this particular sandwich, Quiznos sponsored a contest in which members of the public were invited to create their own commercials. The contest encouraged people to highlight the "meat, no meat" theme, suggesting that the Quiznos sandwich had copious amounts of beef, while the Subway sandwich had far less. More than 100 people submitted videos, which were posted to a Quiznos website and to iFilm, a now-defunct video clip website owned by the media giant Viacom. Subway's lawsuit claimed that some of the videos contained false and disparaging content for which Quiznos and iFilm should be held liable. Subway asserted that Quiznos specifically encouraged contestants to promote one product at the expense of the other, so it should not be immune from responsibility. Quiznos's lawyers responded by pointing out that the company did not create these videos and was therefore not liable. "We're just facilitating consumers who go out and create their own expression in the form of a commercial." Quiznos first tried to have the UGC part of the lawsuit dismissed by claiming the same immunity that YouTube and similar services have regarding the content that members of the public post on their websites. However, a judge refused, saying the law protecting YouTube (the Communications Decency Act, or CDA) didn't necessarily protect Quiznos in this case. Quinzos subsequently asked for a summary judgment to avoid going to trial. When that request was also denied, the two companies settled out of court. That private settlement closed the dispute between the two sandwich chains, but it left the matter of legal responsibility for UGC campaigns wide open. The central question is how much involvement a company sponsoring a UGC contest has in the content of the submissions. The court indicated that by spon- soring the contest and presenting the contest guidelines in a particular way, Quiznos played some role in the creation of the videos. However, because the case didn't go to trial, the ques- tion of whether that role was significant enough to strip the company of legal immunity under the CDA is still unresolved. Until clear legal guidelines are established, companies running UGC programs, such as Toyota's Auto-Biography campaign, will need to tread carefully to avoid legal problems. CAREER APPLICATIONS 1. Legal issues aside, in your opinion, is Quiznos ethically re- sponsible for any false or misleading information that may be found in the user-generated videos? Why or why not? 2. Most consumers lack the skills and equipment needed to produce professional-quality video commercials. Why would companies such as Quiznos invite them to create commercials? When companies engage in comparative advertising, making explicit comparisons between their products and those of com- petitors, complaints of false statements and defamation are fairly common. In that sense, a lawsuit that Subway recently filed against Quiznos is not in itself unusual. Subway claimed that Quiznos made unfair and untrue comparisons about the size and meat content of one of its sandwiches and failed to disclose the fact that the larger Quiznos sandwich cost nearly twice as much as the Subway sandwich. What made this case unusual and gave it potentially far- reaching impact for business communication is the Web 2.0 angle of user-generated content (UGC). As part of its efforts to promote this particular sandwich, Quiznos sponsored a contest in which members of the public were invited to create their own commercials. The contest encouraged people to highlight the "meat, no meat" theme, suggesting that the Quiznos sandwich had copious amounts of beef, while the Subway sandwich had far less. More than 100 people submitted videos, which were posted to a Quiznos website and to iFilm, a now-defunct video clip website owned by the media giant Viacom. Subway's lawsuit claimed that some of the videos contained false and disparaging content for which Quiznos and iFilm should be held liable. Subway asserted that Quiznos specifically encouraged contestants to promote one product at the expense of the other, so it should not be immune from responsibility. Quiznos's lawyers responded by pointing out that the company did not create these videos and was therefore not liable. "We're just facilitating consumers who go out and create their own expression in the form of a commercial." Quiznos first tried to have the UGC part of the lawsuit dismissed by claiming the same immunity that YouTube and similar services have regarding the content that members of the public post on their websites. However, a judge refused, saying the law protecting YouTube (the Communications Decency Act, or CDA) didn't necessarily protect Quiznos in this case. Quinzos subsequently asked for a summary judgment to avoid going to trial. When that request was also denied, the two companies settled out of court. That private settlement closed the dispute between the two sandwich chains, but it left the matter of legal responsibility for UGC campaigns wide open. The central question is how much involvement a company sponsoring a UGC contest has in the content of the submissions. The court indicated that by spon- soring the contest and presenting the contest guidelines in a particular way, Quiznos played some role in the creation of the videos. However, because the case didn't go to trial, the ques- tion of whether that role was significant enough to strip the company of legal immunity under the CDA is still unresolved. Until clear legal guidelines are established, companies running UGC programs, such as Toyota's Auto-Biography campaign, will need to tread carefully to avoid legal problems. CAREER APPLICATIONS 1. Legal issues aside, in your opinion, is Quiznos ethically re- sponsible for any false or misleading information that may be found in the user-generated videos? Why or why not? 2. Most consumers lack the skills and equipment needed to produce professional-quality video commercials. Why would companies such as Quiznos invite them to create commercials?

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Analyzing the situation involving Quiznos and Subway we can discuss the ethical and strategic aspects of their actions 1 Ethical Responsibility of Qui... View the full answer