Best Buy Co. Inc. will withdraw its unfair advertising lawsuit against Colorado-based Ultimate Electronics, attorneys for both companies said in a joint filing on July 16. The suit, brought by Best Buy in April, accused Ultimate Electronics of misleading consumers through an ongoing advertising campaign that involved false price claims. Specifically, Ultimate Electronics’ advertisements claimed that its prices were lower than Best Buy’s prices every day.

The parties agreed to resolve the suit after Ultimate Electronics stopped claiming that it had price-shopped Best Buy and other retailers daily to offer lower prices, the filing said. In a statement in April, the Better Business Bureau (BBB) Serving Denver/Boulder said it had given Ultimate Electronics an "F" rating for its advertising because of the price claims as well as unanswered complaints.

Moreover, the BBB of Minnesota and North Dakota released a statement explaining that it "secret shopped Ultimate Electronics' 'Lowest Prices Period' claim on dates between July 2007 and August 2008. On each of those five occasions--of a random sampling of electronic devices--our (the BBB's) secret shoppers noted one or more items which were priced lower at the stores of competitors listed in Ultimate Electronics advertising." The regulators go on to say that Ultimate Electronics refused to cooperate with its inquiry.

"Lowest price claims should generally not be trusted unless they can be proven or are backed by some kind of ‘meet-or-beat’ guarantee," Dale Mingilton, president and CEO of the BBB Serving Denver/Boulder, explained. "Ultimate Electronics never provided anything to our office that substantiates its claims and that is the main reason for their F rating."

Best Buy’s law suit was filed around the same time as the BBB inquiry. The suit accused Ultimate Electronics of violations under the Lanham Act, the Minnesota Deceptive Trade Practices Act and the Minnesota False Statement in Advertising Act and the Minnesota Consumer Fraud Protection Act. Ultimate Electronics denied Best Buy's allegations of false and misleading advertisements in an earlier filing with Minneapolis' US District Court.

Last week’s filing acknowledges that Ultimate Electronics ended the advertisements "without admitting any liability."

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Anthony V. Lupo
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Sarah L. Bruno
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