Palm settles deceptive advertising charges involving wireless products

WASHINGTON (AP) _ Handheld computer maker Palm Inc. has settled federal charges that its fine print was a little too fine. <br><br>The Federal Trade Commission said Wednesday the Santa Clara, Calif-based

Wednesday, March 6th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ Handheld computer maker Palm Inc. has settled federal charges that its fine print was a little too fine.

The Federal Trade Commission said Wednesday the Santa Clara, Calif-based company made misleading advertising claims that its personal digital assistants come with built-in wireless access to the Internet, e-mail and business programs.

``They disclosed only in microscopic print that for almost all of the models you had to buy a separate modem,'' said Mary Engle, a director with the FTC's advertising practices division.

Consumers also had to purchase additional software to perform wireless business functions such as viewing spreadsheets and other documents, the FTC said.

Under the settlement, the company must disclose ``clearly and conspicuously'' when consumers have to buy additional products to perform functions such as connecting to the Internet. Palm is also barred from making deceptive statements about what its products do without extra accessories or services.

Palm spokeswoman Marlene Somsak said the company believes ``we have appropriately disclosed service or additional purchase requirements, but we're happy to make those disclosures in larger type or more explicit language.''

The agency said some Palm ads in magazines and newspapers used type a third the size of average print for the disclaimer and placed it on the side of the ad, sometimes with hard-to-read white text on a light background or black text on a dark background.

There's no standard for how large a disclosure should be because the size of advertisements vary, but the information must be understandable to the average consumer, the FTC said.

In April, the FTC made similar allegations against Microsoft and Hewlett-Packard, which made claims about built-in wireless Internet access for the Pocket PC handheld computer.

While that settlement was similar to the one with Palm, Microsoft also agreed to write an essay discussing the capabilities and limitations of the gadgets and publish it as a quarter-page advertisement in newspapers nationwide.

In the case against Palm, the FTC also alleged that the company's advertisements failed to disclose that for one model that did come with built-in wireless Internet access, those features could only be used by subscribing to the company's Palm.Net Internet service.

The FTC voted to approve the settlement 5-0. There will be a monthlong comment period before the agreement is made final.