Trade group reports controversial Oracle advertisements to FTC

Oracle believes the ads comparing its Sparc T5 server to IBM's Power7+ platform are 'fair and accurate'

An advertising industry oversight group has reported Oracle to the U.S. Federal Trade Commission after the vendor allegedly failed to comply with previous rulings.

The National Advertising Division, which is controlled by the Council of Better Business Bureaus, investigated three Oracle advertising campaigns last year after complaints from IBM. Each of the campaigns contained "an overbroad and unsupported comparison between one Oracle product and one IBM product," the group said in a statement.

In July 2012, Oracle agreed to pull advertisements claiming that its Exadata database machine was vastly more powerful than IBM's Power Systems hardware, but said at the time it believed the NAD's ruling was too broad.

"Now, IBM has brought NAD's attention to a fourth Oracle advertising campaign, featuring the claim that Oracle's Sparc T5 has '2.6x Better Performance' as compared to IBM's Power7+ AIX server," the NAD said. "The advertising in question features the same stark, overbroad IBM-versus-Oracle comparison that NAD recommended against in the three previous cases."

Oracle has repeatedly failed to "make any (much less a good faith) effort to bring its advertising into compliance," which has required referring the matter to the FTC, according to NAD's statement.

An Oracle spokesman said via email Friday that the company disagrees with the NADs' decision, and "believes the ad is fair and accurate."

"The ad provides a clear and objective comparison between an IBM Power7+ AIX system and an Oracle Sparc T5 system using industry standard benchmark results that legitimately show 2.6x better performance by the Oracle system," said spokeswoman Deborah Hellinger. "NAD has failed to take into account the sophistication of the ad's target audience, namely businesses that purchase enterprise hardware systems."

Meanwhile, IBM is "gratified" by the NAD's decision, spokesman Jeffrey Cross said in a statement.

The Sparc T5 advertisement "suffers from the same problems as its former campaigns: A disconnect between the message conveyed by the advertising and the testing offered in its support," he added.

There's little love lost between Oracle and IBM, who are fierce competitors in the high-end server market.

Oracle's hardware revenue has consistently fallen since it got into the business with the acquisition of Sun Microsystems, but company officials maintain they are focused on selling higher-margin products like Exadata, which customers must also load up with lucrative software licenses.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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Tags Oraclebusiness issueslegalIBMhardware systemsU.S. Federal Trade Commission

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Chris Kanaracus

IDG News Service
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