MS under fire from FTC over handheld ad –

AMSTERDAM -- Microsoft Corp. and Hewlett-Packard Co. are negotiating to settle false-advertising charges with the U.S. Federal Trade Commission (FTC), according to a newspaper article.

The FTC found deceptive a Microsoft campaign for its Windows Pocket PC software for handheld computers boasting the slogan "Can Your Palm Do That?" In the ads the company positioned an HP personal digital assistant (PDA) against Palm Inc.'s products, according to an article Monday in The Wall Street Journal.

The ads claimed features that were unavailable unless buyers signed up for wireless capability. Consumers were told of this in nearly unreadable print at the bottom of the ads, the report said.

Five months ago, Microsoft agreed to settle false-advertising charges involving its WebTV product. The FTC found that Microsoft deceptively underestimated the cost of WebTV by failing to disclose certain telephone charges and claiming the service allows full access to the Internet. [See "Microsoft Settles with FTC Over WebTV Ads," Oct. 26]

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