Virtual reality could expose auto suppliers to new claims of false advertising

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Automotive suppliers and manufacturers around the world are getting on the virtual and augmented reality bandwagon.

The CEO of Jaguar Land Rover North America revealed the company sees a major role for virtual reality experiences in its dealerships. Wearing a head-mounted display, such as Google Cardboard, customers would be able to experience various vehicle interiors and color combinations in three dimensions without needing to see a physical vehicle. Joe Richards, director of research and market intelligence for Cox Automotive, reportedly has called virtual reality a “sleeping giant that could significantly improve car shopping and dealer experiences.”

Augmented reality — which superimposes virtual imagery onto real-world environments as popularized by the Pokémon Go craze — also is a hotbed for advertising innovation. For years, Cadillac and many other automotive brands have offered mobile AR apps that create interactive, 3-D digital models of their vehicles.

Recent innovations in smart eyewear, however, are poised to make such experiences more immersive. Volvo, for example, has demonstrated an app for the Microsoft HoloLens — a cutting-edge piece of wearable AR hardware — that delivers an entire holographic showroom to users wherever they are.

These cases showcase the power of virtual and augmented media for communicating information to potential buyers. With that great power, however, comes the great responsibility of ensuring the digital representations of a product faithfully convey the product’s actual features. If VR/AR demonstrations materially mislead or misinform the consumer about a product’s features, the advertiser could find itself liable for false advertising.

The primary legal authority creating the right to sue for such actions is the Lanham Act, which also regulates the use of trademarks. False advertising claims may be filed by a regulatory agency or by a private party whose interests may be negatively affected by the challenged activity.

It’s easy to imagine how a plaintiff could characterize automotive VR or AR content as false advertising. The simplest way for potentially misleading advertising to occur in these media is by mistake.

Virtual and augmented reality tools still are an emerging technology. Even the most cutting-edge AR and VR devices, such as the HoloLens, remain in the developmental stage and are prohibitively expensive for most consumers. More accessible devices, such as the wearable mounts that enable VR experiences on mobile phones, deliver impressive, but less-precise, experiences. As sophisticated as these devices are, they have inherent limitations on how realistic they make virtual images appear.

Consequently, some overambitious AR or VR content creators may try to convey more data than they can effectively render, resulting in imprecise output. That, in turn, might end up conveying information that is false and has a material impact on a consumer.

In one recent case, for example, a company was found to have misrepresented the size of its product by packaging it in an overly large container. Under certain circumstances, a consumer might argue an augmented or virtual image represented an automotive product as unrealistically — and misleadingly — small or large in a way that affected their purchasing decision.

An advertiser also might take unfortunate shortcuts during the complex task of creating virtual imagery for advertisements. For example, in 2012, British regulators banned L’Oréal from running ads containing two photos of Julia Roberts and Christy Turlington. L’Oréal’s marketers digitally enhanced both photos to the point it could not prove to the regulators’ satisfaction the advertised makeup products could produce results like the ones shown.

The difficulty of precise 3-D rendering — not to mention the same commercial and societal pressures that led to these photo alterations — could likewise result in augmented ads that are similarly unrealistic. In the automotive realm, for example, a digital artist may leave out or oversimplify important features when rendering a product, in ways that mislead consumers into believing things about the product that are not accurate.

By definition, digitally enhancing physical reality is a fundamental element of what VR and AR do. These types of situations are ones that marketers easily could get themselves into if they are not careful. Whenever there is the potential that images might be argued to be confusing to customers, it is always a good idea to run that content by trained lawyers before publishing it.

Brian D. Wassom is a litigator at Warner Norcross & Judd LLP who focuses his practice on matters of creative expression, commercial identity and privacy. He can be reached at bwassom@wnj.com.