Skype Must Defend False Advertising Class Action

(CN) - Skype must face a class action lawsuit from a California woman who claims the company falsely advertises its Internet calling plan, a state appellate court ruled.

Melissa Chapman claimed in Los Angeles Superior Court that Skype falsely touts its calling plans as "unlimited."

Chapman said Skype limits the number calls per day, as well as the calling minutes per day and month.

She sued Skype on behalf of its customers for unjust enrichment, negligent and intentional misrepresentation, and violations of laws prohibiting unfair competition and false advertising.

At the bottom of its web page, Skype's "Fair Usage Policy" stated that the calling plan is limited to six hours per day, 10,000 minutes per month and 50 numbers called per day.

Skype succeeded in getting the trial court to throw out Chapman's case without leave to amend, due to the website's footnote about the Fair Usage Policy.

However, the Los Angeles-based Second District California Court of Appeals reversed the decision, ruling that Chapman made valid claims of false and deceptive advertising and unfair competition.

The opinion, written by Justice H. Walter Croskey, also allows her to amend her claims for intentional and negligent representation.

"The trier of fact could reasonably conclude based on the facts alleged in the complaint and those judicially noticed that consumers are likely to believe that Skype's 'Unlimited US & Canada" calling plan offers unlimited calling within the United States and Canada for a fixed monthly fee, and that they will fail to notice the disclosure to the contrary in the fair usage policy," Croskey wrote.

"Moreover, the fact that Skype ultimately discloses the limits in its 'Fair Usage Policy' does not excuse its practice of labeling the plan 'Unlimited' in its initial dealings with potential customers," he added.

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