Red Lobster Nets Captain D's With False Ad Claims Rap

(MoneyWatch)  Red Lobster has managed to maneuver rival seafood chain Captain D's into an FTC review of its advertising for alleged misleading claims. This sort of thing can cost a company millions of dollars. Captain D's had run a series of claims on TV and the web that mentioned Red Lobster specifically:

Captain D's offerings are 'like the same thing we just ate' at Red Lobster

And the implied claim that:

"Captain D's offerings are comparable to items served at Red Lobster at one half the price."

Citing Red Lobster by name was Captain D's big mistake, but it compounded its error by refusing to participate in voluntary arbitration in front of the National Advertising Division, the ad industry's Soviet-style mechanism for internal discipline.

NAD has a symbiotic relationship with the FTC in the form of a tacit agreement that if advertisers resolve misleading claims disputes with the NAD, the FTC will not get involved; but if companies refuse to go along with NAD then the case will rise to the top of the FTC's inbox.

That is where Captain D's is right now. The company better be telling the truth -- or at least have really great lawyers.