NEW YORK Comcast Corp, the largest U.S. cable operator, has sued pay TV rival DirecTV, accusing it of misleading consumers by promising "free" broadcasts of National Football League games.
In a complaint filed on Wednesday in the U.S. District Court in Chicago, Comcast claimed that DirecTV, No. 1 U.S. satellite operator, is poaching customers with false promises about its NFL Sunday Ticket package.
According to Comcast, DirecTV has been recruiting customers from other TV providers by appearing to offer them a chance to watch NFL games outside their local markets for free.
But Comcast said the campaign, which is online, on TV and on the radio, does not disclose that the offer requires customers to sign up for two-year contracts that cost hundreds of dollars, with hefty fees for early termination.
"The claim of 'free' is an outright lie," Comcast said. "This is a false advertising case against a serial false advertiser."
Comcast added that DirecTV has been disparaging its cable services in a national TV commercial. In Philadelphia, all games by the local Eagles team are available on Comcast, but the ads make it seem that only subscribers of DirecTV's NFL Sunday Ticket package can view them, Comcast said.
Comcast is seeking to recover DirecTV's alleged improper profits, as well as punitive damages and a halt to the ads.
DirecTV denied the allegations. "We believe Comcast's complaint is completely without merit and plan to defend ourselves vigorously," spokesman Darris Gringeri said.
On Thursday, DirecTV said it signed up 26,000 subscribers -- fewer than expected -- in the second quarter. The Sunday Ticket package is one of its most popular services and helps it attract new customers.
DirecTV shares fell nearly 7 percent, while Comcast was down 3.6 percent on Nasdaq at mid-afternoon.
The case is Comcast Cable Communications LLC v DirecTV Inc, U.S. District Court, Northern District of Illinois, No. 11-05284.
(Additional reporting by Jonathan Stempel; Editing by Richard Chang)