Salesforce.com Sues UpShot Over Ad Claims
The complaint in U.S. District Court for the Northern District of California alleges that UpShot's recent advertising claims violate state and federal laws against false advertising, unfair competition and unfair business practices.
Prior to filing the lawsuit, salesforce.com privately challenged the ads of fellow CRM solutions provider UpShot through the National Advertising Division of the Council of Better Business Bureaus Inc., the advertising industry's self-regulatory forum.
The division concluded that UpShot's headline, "The Better CRM Online Solution," and its claim that it was the "leading web-based, sales-focused CRM solution," were unsupported and should be modified to avoid conveying an inaccurate message of superior performance. The division also concluded that UpShot failed to reasonably support that it has more medium and large business customers or comparable customer volume versus salesforce.com.
"In light of UpShot's false advertising claims and its failure to withdraw these claims when challenged, we are pursuing this issue through the courts," said Marc Benioff, CEO of salesforce.com. "UpShot has yet to produce evidence that substantiates its claims and is misleading the market. As yet we have not seen anything from UpShot that would challenge salesforce.com in terms of customers, service or profitability."
Keith Raffel, chairman of UpShot, said that Salesforce.com complained to the National Advertising Division late last year about the ads UpShot was running.
He said the division told UpShot to put substantiation in the ads that proved it was "The Better CRM Online Solution" and the "leading web-based, sales-focused CRM solution."
"And we said that's fine, thanks very much, but we are not running those ads anymore anyway, they had run their course," Raffle said. "If we run them again we will substantiate it."
Raffel, who said he was unaware of the lawsuit until yesterday, also said "we sent [the NAD] analyst reports that would have substantiated it."
He also said that "we have a whole new ad campaign that compares some things between Salesforce.com and us, and we are going to continue running them."