26 October 2000

Pressured by investigators from the Federal Trade Commission, Microsoft yesterday agreed to run a consumer education ad campaign countering claims it had made in earlier promotions for its interactive WebTV system.

Microsoft falsely and deceptively understated the service's cost by failing to disclose additional toll-call charges, alleges the FTC. It also accuses Microsoft of falsely promoting complete internet access.

Although neither admitting nor denying the charges, Microsoft has agreed to inform consumers of the limits of its system and warn that users could face long-distance telephone charges inadequately disclosed in its advertising.

Said the Redmond, Washington-based software giant: "While we may disagree with some aspects of the Commission's analysis, Microsoft WebTV is pleased to provide consumers with the additional disclosure, educational advertising and brochures they believe is necessary." The campaign will include ads in media such as Newsweek, Modern Maturity and Good Housekeeping magazines.

The WebTV service, which claims over one million subscribers, markets a set-top box that connects users to the internet via their TV sets. The problems could delay the launch of Microsoft’s UltimateTV, due by the end of this year, although the company insists that this is still on schedule.

News source: Wall Street Journal