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The Courts The Almighty Buck Games

Judge Says EA Battlefield 4 Execs Engaged In "Puffery," Not Fraud 95

DemonOnIce writes with a story, as reported by Ars Technica, that a federal judge in San Francisco has dismissed a proposed securities fraud class action lawsuit connected to Battlefield 4's bungled rollout. From the report: EA and several top executives were sued in December and were accused of duping investors with their public statements and concealing issues with the first-person shooter game. The suit claimed executives were painting too rosy of a picture surrounding what ultimately would be Battlefield 4's disastrous debut on various gaming consoles beginning last October, including the next-generation Xbox One. But US District Judge Susan Illston of San Francisco said their comments about EA and the first-person shooter game were essentially protected corporate speak. "The Court agrees with defendants that all of the purported misstatements are inactionable statements of opinion, corporate optimism, or puffery," Illston ruled Monday.
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Judge Says EA Battlefield 4 Execs Engaged In "Puffery," Not Fraud

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  • Link... (Score:5, Insightful)

    by TheNastyInThePasty ( 2382648 ) on Wednesday October 22, 2014 @04:08PM (#48206667)

    The link in the summary leads to "Sapphire manufacturer and Apple agree to part ways “amicably”" GJ Editors

    • Re:Link... (Score:5, Informative)

      by _xeno_ ( 155264 ) on Wednesday October 22, 2014 @04:13PM (#48206719) Homepage Journal

      Well, to be fair, that story was immediately below the one they presumably intended to link [arstechnica.com].

      Although now we have a definitive answer to "do the editors bother checking the stories being linked to when they post stories."

      • LAWSUIT! I was expecting news for nerds, stuff that matters! Not something about Apple and a company that built it's foundation on rumors that it didn't bother trying to distance it self from thus being responsible for the hole they dug them self.

        I demand stuff that matters!

      • they don't even have to check the story, they can just check the title of the story embedded in the URL.

      • The URL text contains the title of the story it's pointing to. Just hovering over the link, or pasting the URL in between the double quotes of <a href=""></a> will tell you where the link is going.

        There's incompetence, and then there's gross incompetence. Guess which one this falls into.

      • Re:Link... (Score:4, Funny)

        by Dishevel ( 1105119 ) on Wednesday October 22, 2014 @04:34PM (#48206943)
        Timmothy has been around far too long here to be expected to do his job.
        • by antdude ( 79039 )

          And you haven't been spelling his name for a long time? :P

          • I think I am adding the extra "m" to his name to explain the "Massive" failure that he is as an editor. I will have to watch for that.

            Thanks

  • Puffery (Score:5, Informative)

    by NoImNotNineVolt ( 832851 ) on Wednesday October 22, 2014 @04:10PM (#48206685) Homepage

    The United States Federal Trade Commission (FTC) defined puffery as a "term frequently used to denote the exaggerations reasonably to be expected of a seller as to the degree of quality of his product, the truth or falsity of which cannot be precisely determined."

    The FTC stated in 1984 that puffery does not warrant enforcement action by the Commission. In its FTC Policy Statement on Deception, the Commission stated: "The Commission generally will not pursue cases involving obviously exaggerated or puffing representations, i.e., those that the ordinary consumers do not take seriously." e.g., "The Finest Fried Chicken in the World."

    Source [wikipedia.org]

    In other words, caveat emptor.

    • Re:Puffery (Score:5, Funny)

      by Anonymous Coward on Wednesday October 22, 2014 @04:12PM (#48206703)

      That was the finest Slashdot post I have ever read.

    • But... but... I spent money and didn't get what I wanted!
      • More like "But I invested money and got the shaft". But yeah, when you're investing, you're definitely taking on risk.

        • I understand that puffery more or less gives companies to make claims which aren't supportable as fact ("Best Pizza in the World") ... but can you make statements which mislead investors?

          Isn't that covered under the SEC?

          Because, if companies can hide behind puffery when they're doing their financial forecasting ... then it's time to admit the entire stock market is a lie, and mostly comes down to how well the CEO lies to (or bribes) the analysts.

          Of course, many of us have suspected that to be the case for y

    • Whoa, whoa, whoa.

      If that's the definition, there's one issue with the Judge's decision. The definition of puffery requires that the customer doesn't take the claim seriously. It sounds like the investors (the customers in this case, in a sense) did indeed take them seriously.

      Caveat emptor, yes, but regardless, by the FTC's definition, this isn't puffery. Not sure what it is, but it's not that.

      • No. It requires that the customer should not take such claims seriously. There is no lower limit to human intelligence.
      • I think when they say "customers don't" it's implied that they mean most (as opposed to all) customers don't.

        Because, let's face it, there's always one idiot.

      • The definition of puffery requires that the customer doesn't take the claim seriously.

        Not "customer," but rather "ordinary consumers." For the courts to reward the customers who believe the claims and not those who didn't would be to reward the people who are gullible--or at least those who claim to be gullible.

        It sounds like the investors (the customers in this case, in a sense) did indeed take them seriously.

        They have a vested interest to make that claim.

        ~Loyal

        • For the courts to reward the customers who believe the claims and not those who didn't would be to reward the people who are gullible--or at least those who claim to be gullible.

          While I hate rewarding people for being gullible (perhaps deliberately so), it would be a good way to end all the exaggeration and misrepresentation done to sell goods. The world would be a better place if corporations had to be objective and stick to the facts when advertising their goods.

          • The world would be a better place if corporations had to be objective and stick to the facts when advertising their goods.

            And while we're at it we can make it illegal for politicians to make claims they don't follow through with. And religions. Religions can't make any claims they can't objectively prove. And political action committees. And athiests. Athiests won't be able to claim there is no god unless they can prove there is none. And the press. The press won't be able to report anything unless t

            • One book could list everything that's mandatory, and the other everything that's forbidden.

              My SO already has these.

          • "The world would be a better place if corporations had to be objective and stick to the facts when advertising their goods"

            While I agree with the sentiment, this would increase the regulatory bureaucracy, which would inevitably be influenced by, you guessed it, lobbyists.

            Interestingly, sadly, paradoxically, freedom of speech implies freedom to lie. To effectively combat this, I think we would end up losing some of that "essential liberty" in your tagline.

      • by alen ( 225700 )

        it means you have to be smarter than a gnat and not take marketing nonsense seriously to get you to buy a product before it's released on hype alone

        • Why do we allow that, though? It's ok for companies to lie to you, as long as someone smart enough (i.e., someone who's learned through experience that advertising claims are unreliable) knows that they're lying. Sure, it makes the people who say such things feel better/superior for being "smarter than a gnat," but, at the heart of it, we're still saying it's ok for companies to mislead in order to take money, as long as they're cagey enough about it. Boo.

          • I don't think it's ok either, but the reality is that if you're young and immature or old and infirm, there are regs to keep fraud to a dull roar. All others, caveat emptor.

            I think private orgs like Consumer reports, epinions.com, product reviews at shopping sites, etc, is an effective way to get past the bs.

    • those that the ordinary consumers do not take seriously." e.g., "The Finest Fried Chicken in the World."

      So I wonder how that works out in the context of:

      Ladies and gentlemen of the jury, do these sound like the actions of a man whose had ALL he could eat? [imdb.com]

      Is "all you can eat", from a legal point of view, considered an "exaggerated or puffing representation", i.e. one "that the ordinary consumers do not take seriously"? Or would Homer's complaint be taken up by the FTC?

    • Re:Puffery (Score:5, Insightful)

      by kruach aum ( 1934852 ) on Wednesday October 22, 2014 @04:17PM (#48206771)

      That the consumer is not to take seriously the claim that the game will work at launch is completely unreasonable.

  • Sounds like when you have an unnatural sexual relationship with a small black and white sea bird.

  • PUFFERY? (Score:3, Informative)

    by slackoon ( 997078 ) on Wednesday October 22, 2014 @04:13PM (#48206725)
    from ars technica...

    Puffery is a well-defined term by the FTC, but still ends up as a "know it when you see it" thing sometimes. Here's an FTC handout discussing it with consumers. [ftc.gov] The basic point is that if a company says that something is generically awesome, that's probably just puffery and not actionable. If they use measurable numbers, talk about specifics, or directly compare it to one or more competitors, that can require proof and be actionable. Note that comparatives "our product A is better than B" are more likely to be actionable than superlatives "our product A is the best."
  • You know (Score:5, Funny)

    by Charliemopps ( 1157495 ) on Wednesday October 22, 2014 @04:17PM (#48206767)

    You know... I was downtown, selling some fine imported watches to passers by, and a police officer did not find my excuse of "Puffery" nearly as understandable as this judge seems to. Apparently Puffery isn't not allowed at $100, but is at $100million. Interesting indeed. I need to raise my price point!

  • Corporations are not just people, but protected people now.

    • Corporations are not just people, but protected people now.

      That worries me. Suppose a policeman admitted that people had a right against unreasonable search and seizure, but homes don't. Since this home doesn't have any rights then it's perfectly alright to search the papers and effects in this home. Denied? OMG!!! The Supreme Court has ruled that houses are protected people.

      ~Loyal

      • by sjames ( 1099 )

        More likely it goes the other way.

        For example, the whole civil forfeiture thing relies on the courts determining that when the form is like State of Police vs. $100,000 in cash, the owner of the cash is a 3rd party and so has no cause of action and the cash isn't a person so it has no rights to due process at all.

        The correct ruling is that the papers are yours, not the house's and you have a right to not have your papers and effects searched without a warrant.

        • The correct ruling is that the papers are yours, not the house's and you have a right to not have your papers and effects searched without a warrant.

          Agreed. And the correct ruling in this case is that all of the purported misstatements are inactionable statements of opinion, optimism, or puffery, and that the owners of the corporation have a right to make those statements, and that the government may not infringe them.

          ~Loyal

          • by sjames ( 1099 )

            In this particular case, that appears to be true. The statementys that were made appear to be no more optomistic than would normally be expected from a naturally biased management.

            Puffery is often seriously abused as a concept and that makes people question it reflexively, but in this case it seems correct.

    • "Protected Corporate Speech" according to Ars Technica's editorialization. The decision itself doesn't use such a term, because it would be totally meaningless. And at any rate, most of the things said were not said by EA, but by a number of officers and executives of EA, and they were sued personally. So the majority of the claims were not about corporate speech at all. They also were not ruled "protected", they were ruled "inactionable" (under the SEC regulations against misleading investors).
  • If you are investing in the video games industry you had better know what you're getting yourself into. The notion that the words of the executives of the company has any bearing on the end result of a product they have no hand in, don't understand and is ultimately a subjective experience is absurd. It's like making investment decisions based off of Disney executives claiming Star Wars episode 7 is going to be the best Star Wars movie ever.
  • Wait? (Score:5, Funny)

    by Stormy Dragon ( 800799 ) on Wednesday October 22, 2014 @04:32PM (#48206931) Homepage

    You mean Ringling Brothers ISN'T actually the greatest show on earth?

  • Technology is complicated. Creative stuff is complicated. As a result, when you have them both together that's an area where shit goes arse over tit sometimes. It's probably the exception when it doesn't.

    If you don't like that, invest in a company that makes toasters.

  • Even if they weren't intentionally lying, telling investors information that is effectively false is at best being self delusional, which is professionally irresponsible.

    If I didn't lock the bank vault at night, for several years in a row, and my sole job was to protect the vault, then someone broke in and stole everything, could I get away with "puffery" because I told others, with confidence, that I as protecting the vault?

    How about a surgeon who is asked to do a surgery, but by no means should becau
    • I read the court document sounded like a bunch of opinions made on earnings call about a product that hadn't even been finished. Things like we started early than previous transitions to new game consoles, are going to work closer with vendors, and I think this is going to be the best launch ever is not the same as what you are talking about.

    • by mjwx ( 966435 )

      Even if they weren't intentionally lying, telling investors information that is effectively false is at best being self delusional, which is professionally irresponsible.

      To be fair, EA and the Battlefield series has been going downhill for a long time. The BF3 was complete shite and I fell off the bandwagon after that. Given all the other bungled EA product launches (the Sims, Sim City) its hardly surprising.

      I kind of have a hard time feeling sorry for people who bought BF4, the pattern was there clear as day. Caveat Emptor as they say.

      • I kind of have a hard time feeling sorry for people who bought BF4, the pattern was there clear as day. Caveat Emptor as they say.

        Hey, when it works bf4 is completely awesome and brilliant. It's just a shame it only works about 10% of the time. But they consider the game fixed enough to add in customisation on parachutes yet the 'kin game never saves your loadouts (at least it don't on the xbone) :|

  • With the PHB somehow becoming a judge?

  • by gurps_npc ( 621217 ) on Wednesday October 22, 2014 @05:00PM (#48207253) Homepage
    Wow, the ability to come up with "he did it, but it' wasn't bad enough to warrant legal action" excuses has had a huge renaissance.
    • by Kjella ( 173770 )

      Wow, the ability to come up with "he did it, but it' wasn't bad enough to warrant legal action" excuses has had a huge renaissance.

      More like you accuse someone of defamation and it's the difference between "He told people I'm an asshole" and "He told people I'm a child molester". Both are defamatory statements by definition "1. (Law) injurious to someone's name or reputation)" but only one is actually illegal. Even if you're selling a polished turd you can make a lot a objectively highly questionable praise, misleading statistics and lies by omission without actually incriminating yourself. Like the defamation example above, you usuall

      • by skine ( 1524819 )

        Your example is wanting.

        Calling someone a child molester is making a factual claim that said person has molested at least one child. Calling someone an asshole isn't making a claim about anything, other than displeasure. At least, that's assuming that rectums aren't granted personhood. Neither falls into any sort of gray area.

        For that gray area, to claim defamation over lying requires not only that the person lied, but that the lie was sufficient to cause some sort of damages and that it went beyond the exp

  • by Greyfox ( 87712 ) on Wednesday October 22, 2014 @06:54PM (#48208261) Homepage Journal
    For I too have, far too often, put some money into something EA said would be awesome and it turned out to be a pile of crap. With time, you'll learn to be suspicious of anything EA says. Next year when they do "Restockening, the Sequil", I assure you that it will suck every bit as much as the original did. If you wait a few months before buying, you might be able to pick their stock up cheap (or possibly even free) during a Steam sale. That's just how you need to play the game, if you don't want to waste your money.
  • by Lumpy ( 12016 ) on Wednesday October 22, 2014 @06:57PM (#48208283) Homepage

    The game is still a steaming pile of crap, I still warn people away from it and anything else that comes from that franchise ever again.

    • by Xest ( 935314 )

      Yep, even now it still has launch day bugs, and if you raise it on their forums which is where you're told to raise it by DICE you get censored by their resident fanboys with mod powers who tell you to raise it with DICE who tell you to raise it with EA and so on.

      If they can't even keep track of whose tracking issues and have a handful of mod power enabled fanboys to silence their customers then what hope is there of them ever producing anything not shit?

      Really, issue tracking isn't a new thing, there are p

  • If one tells it like it is puffery is fraud just as a salesman's soap is fraud. If a product is desireable enough no sales efforts are required. The reason that we have marketing and sales is that most products really are not desireable at all.
    • If one tells it like it is puffery is fraud just as a salesman's soap is fraud. If a product is desireable enough no sales efforts are required. The reason that we have marketing and sales is that most products really are not desireable at all.

      How do I know what a product does without sales or marketing? Someone has to know about it in order for word of mouth to take effect. And what is word of mouth but a viral marketing campaign? I agree that most products are average or mediocre, but to say that sales and marketing is completely useless on a desirable product is naivety at its finest.

  • I propose the word 'Puffoon' to mark the case, see Wikipedia [wikipedia.org] for my inspiration.

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