Best Buy has dropped a false-advertising lawsuit against retail competitor Ultimate Electronics after the company made changes to its advertising claims.
Thornton-based Ultimate’s ads claimed its prices were lower based on daily comparisons with Best Buy.
Minnesota-based Best Buy in April filed a suit against Ultimate in U.S. District Court in Minneapolis. According to the filing, Best Buy surveyed the claims in 2009 and found that Ultimate’s prices were often higher, particularly in certain product categories.
In January, Best Buy notified the Council of Better Business Bureaus’ National Advertisement Division, and its Minnesota office found the allegations to be true. Ultimate didn’t respond to the BBB, and the case was referred to the Federal Trade Commission.
Best Buy dropped its lawsuit after Ultimate stopped using its name in the ads.
Despite the resolution, the BBB of Denver and Boulder is giving Ultimate an “F” rating. That’s because the company continues to claim its prices are lower than its rivals’.
“Until they prove or modify that claim, they will continue to have an F rating with the BBB,” said Dale Mingilton, president and chief executive of the Denver/Boulder BBB, in a press release. The FTC is still looking into the claim.
Best Buy didn’t return calls, and an attorney for the company declined to comment beyond the court filings. A representative from Ultimate Electronics said she was not authorized to speak.
Ultimate became a subsidiary of Wattles Capital Management LLC, a retail investor, in 2005. According to Wattles’ website, Ultimate’s owner, Mark Wattles, also owns more than 2,000 Hollywood Video stores and 700 Game Crazy stores.
Ultimate has nine locations in Colorado, and Wattle’s website cites about $600 million in annual sales for the company.
Both companies bore their own legal fees, although Best Buy, in its original filing sought recovery of losses from Ultimate.
Rita Wold: 303-954-1488 or rwold@denverpost.com
