Advertising Law
Dec 24, 2015
Advertising LawAdvertising Law
SelfRegulation
SelfRegulation
Federal Regulation
Federal Regulation
State Regulation
State Regulation
Federal Regulation
Federal Regulation
SelfRegulation
SelfRegulation
Advertising is regulated through
Advertisers and Agencies
Advertisers and Agencies
Industry TradeAssociations
Industry TradeAssociations
MediaMediaThe PublicThe Public
Industry TradeAssociations
Industry TradeAssociations
Advertisers, Agencies, Media
and their Lawyers
Advertisers, Agencies, Media
and their Lawyers
Self-regulation of Advertising
BBBNARCBBB
NARC
Voluntary self regulation by the advertising industry, business, and media to maintain consumer trust and confidence and limit
government interference
Voluntary self regulation by the advertising industry, business, and media to maintain consumer trust and confidence and limit
government interference
© 2013 SAGE Publications, Inc.
AAAA code of ethics
The Pharmaceutical Industry Has Developed Advertising Guidelines To Self-Regulate
The National Advertising Review Council is an Important Self-Regulatory Body
Sources of NAD Cases
61%
32%
1%
6%
0 10 20 30 40 50 60 70
Consumerchallenges
Local BBBchallenges
NAD monitoring
Competitorchallenges
Often results in more stringent standardsthan those imposed by legislation
Often results in more stringent standardsthan those imposed by legislation
Often results in more stringent standardsthan those imposed by legislation
Often results in more stringent standardsthan those imposed by legislation
Encourages truthful, ethical and responsible advertising
Encourages truthful, ethical and responsible advertising
Effective regulatory mechanismEffective regulatory mechanism
Preferable to government interventionPreferable to government intervention
Takes too long to resolve complaintsTakes too long to resolve complaints
Problems with budgeting and staffingProblems with budgeting and staffing
Lack of power or authorityLack of power or authority
Self-serving to advertiser and mediaSelf-serving to advertiser and media
Lack of real power or authorityLack of real power or authority
Problems with budgeting and staffingProblems with budgeting and staffing
Takes too long to resolve complaintsTakes too long to resolve complaints
Preferable to government interventionPreferable to government intervention
Effective regulatory mechanismEffective regulatory mechanism
Encourages truthful, ethical and responsible advertising
Encourages truthful, ethical and responsible advertising
Appraising Self-Regulation
Perspective of Advertisers, Agencies and
Media
Perspective of Advertisers, Agencies and
Media
PerspectiveOf Critics
PerspectiveOf Critics
No shots under one second in lengthNo shots under one second in length
Must not over glamorize productMust not over glamorize product
No exhortative language, such as “Ask mom to buy…”No exhortative language, such as “Ask mom to buy…”
Generally no celebrity endorsementsGenerally no celebrity endorsements
Can’t use “only” or “just” in regard to priceCan’t use “only” or “just” in regard to price
Generally no comparative or superiority claimsGenerally no comparative or superiority claims
No costumes or props not available with the toyNo costumes or props not available with the toy
Three-second establishing shot of toy in relation to childThree-second establishing shot of toy in relation to childThree-second establishing shot of toy in relation to childThree-second establishing shot of toy in relation to child
No costumes or props not available with the toyNo costumes or props not available with the toy
Generally no comparative or superiority claims Generally no comparative or superiority claims
Can’t use “only” or “just” in regard to priceCan’t use “only” or “just” in regard to price
Generally no celebrity endorsementsGenerally no celebrity endorsements
No exhortative language, such as “Ask Mom to buy…”No exhortative language, such as “Ask Mom to buy…”
Don’t over-glamorize productDon’t over-glamorize product
Some TV Network Guidelines for Children’s Advertising
Mike’s Hard Lemonade: No more moratoriums on Hard Liquor advertising!
How About Tobacco advertising?
No tobacco ads on tv or radio, but…
… magazines and outdoor posters near retailers ok, unless targeted to minors
Speech promoting acommercial transactionis protected but must
be truthful
Speech promoting acommercial transactionis protected but must
be truthful
Speech promoting acommercial transactionis protected but must
be truthful
Speech promoting acommercial transactionis protected but must
be truthful
Freedom of speech orexpression is the most basic
federal law that governsadvertising and promotion
Freedom of speech orexpression is the most basic
federal law that governsadvertising and promotion
Freedom of speech mustbe balanced against competing
interests such as advertisingof harmful products
Freedom of speech mustbe balanced against competing
interests such as advertisingof harmful products
Freedom of speech orexpression is the most basic
federal law that governsadvertising and promotion
Freedom of speech orexpression is the most basic
federal law that governsadvertising and promotion
Advertising and the First Amendment
Political Advertising – Harmful speech ok?
Federal Communications
Commission (FCC)
Federal Communications
Commission (FCC)
Food and Drug Administration
(FDA)
Food and Drug Administration
(FDA)
U.S. Postal Service
U.S. Postal Service
Bureau of Alcohol Tobacco,
and Firearms
Bureau of Alcohol Tobacco,
and Firearms
Federal Trade Commission
(FTC)
Federal Trade Commission
(FTC)
U.S. Postal Service
U.S. Postal Service
Food and Drug Administration
(FDA)
Food and Drug Administration
(FDA)
Federal Communications
Commission (FCC)
Federal Communications
Commission (FCC)
Federal Trade Commission
(FTC) *
Federal Trade Commission
(FTC) *
Federal Government Agencies Involved in the Regulation of Advertising and Promotion
1970’s1970’s
FTC very powerful and active regulatorFTC very powerful and active regulator
FTC Improvements Act passedFTC Improvements Act passed
FTC becomes less activeFTC becomes less active
FTC focused on enforcement of existing regsFTC focused on enforcement of existing regs
19801980
1980’s and 1990’s1980’s and 1990’s
2000 to present2000 to present2000 to present2000 to present
FTC becomes less activeFTC becomes less active
1980’s and 1990’s1980’s and 1990’s
FTC Improvements Act passedFTC Improvements Act passed
19801980
FTC very powerful and active regulatorFTC very powerful and active regulator
1970’s1970’s
Federal Regulation by the FTC
The Concept of “Unfairness”: Legal Requirements
Could not reasonably be avoided by consumers
Could not reasonably be avoided by consumers
Causes substantial physical or economic injury to
consumers
Causes substantial physical or economic injury to
consumers
Could not reasonably be avoided by consumers
Could not reasonably be avoided by consumers
Causes substantial physical or economic injury to
consumers
Causes substantial physical or economic injury to
consumers
Must not be outweighed by countervailing benefits to consumers or competition
Must not be outweighed by countervailing benefits to consumers or competition
“Deceptive Advertising”: Key Elements
Perspective of reasonable consumer
Perspective of reasonable consumer
Likelihood of misleading consumer
Likelihood of misleading consumer
Perspective of reasonable consumer
Perspective of reasonable consumer
Likelihood of misleading consumer
Likelihood of misleading consumer
Materiality – misrepresentation or
practice is likely to affect consumers’
purchase decision
Materiality – misrepresentation or
practice is likely to affect consumers’
purchase decision
Puffery: Some Examples
Advertising or other sales presentations which praise the item to be sold with subjective opinions,
superlatives, or exaggerations, vaguely and generally, stating no specific facts
Advertising or other sales presentations which praise the item to be sold with subjective opinions,
superlatives, or exaggerations, vaguely and generally, stating no specific facts
Bayer – “The wonder drug that works wonders”
BMW – “The ultimate driving machine”
Nestle – “The very best chocolate”
Snapple – “Made from the best stuff on earth”
AffirmativeDisclosure
AffirmativeDisclosure
AdvertisingSubstantiation
AdvertisingSubstantiation
Cease andDesist OrdersCease and
Desist OrdersCorrectiveAdvertisingCorrectiveAdvertising
Cease andDesist OrdersCease and
Desist Orders
AdvertisingSubstantiation
AdvertisingSubstantiation
AffirmativeDisclosure
(i.e. disclaimers)
AffirmativeDisclosure
(i.e. disclaimers)
Ways the FTC Deals With Deceptive Advertising
FTC Programs to Prevent Deceptive Advertising
FTC Programs to Prevent Deceptive Advertising
FTC Programs to Deal With Deceptive Advertising After It Occurs
FTC Programs to Deal With Deceptive Advertising After It Occurs
Corrective Advertising & Cease/Desist
Doan's Pills Must Run Corrective Advertising: Ads Claiming Doan's Is Superior in Treating Back Pain Were Unsubstantiated
FTC News ReleaseMay 27, 1999
The Federal Trade Commission has ordered the makers of Doan's Pills to run ads to correct misbeliefs resulting from their unsubstantiated claim that Doan's Pills are superior to other over-the-counter analgesics for treating back pain. The Order, contained in a Commission opinion announced today, would require advertising and packaging to carry the message, "Although Doan's is an effective pain reliever, there is no evidence that Doan's is more effective than other pain relievers for back pain." The order also would prohibit Novartis Corporation and Novartis Consumer Health, Inc., the marketers of Doan's, from representing that the product is more effective than other over-the-counter products unless they possess and rely upon competent and reliable scientific evidence -- including at least two clinical studies — to substantiate their claims. In addition, the order would require Novartis to have scientific substantiation for any claims made regarding the efficacy, safety, benefits or performance of any over-the counter analgesic they market. Doan's has been marketed and sold for over 90 years and always has been advertised as a backache product.
False statements have been made about advertiser’s product or your productFalse statements have been made about advertiser’s product or your productFalse statements have been made about advertiser’s product or your productFalse statements have been made about advertiser’s product or your product
The ads actually deceived or had the tendency to deceive a substantial segment of the audience
The ads actually deceived or had the tendency to deceive a substantial segment of the audience
The deception was “material” or meaningful and is likely to influence purchasing decisions
The deception was “material” or meaningful and is likely to influence purchasing decisions
The falsely advertised products or services are sold in interstate commerceThe falsely advertised products or services are sold in interstate commerce
You have been or likely will be injured as a result of the false statements, either by loss of sales or loss of goodwill
You have been or likely will be injured as a result of the false statements, either by loss of sales or loss of goodwill
The falsely advertised products or services are sold in interstate commerceThe falsely advertised products or services are sold in interstate commerce
The deception was “material” or meaningful and is likely to influence purchasing decisions
The deception was “material” or meaningful and is likely to influence purchasing decisions
The ads actually deceived or had the tendency to deceive a substantial segment of the audience
The ads actually deceived or had the tendency to deceive a substantial segment of the audience
False Advertising: The Lanham Act
Elements Required
To Win a FalseAdvertising
SuitUnder the Lanham Act
Elements Required
To Win a FalseAdvertising
SuitUnder the Lanham Act
Common Areas of FTC Inquiry
Environmental Claims
“Free” Claims
Made in the USAClaims
Advertising as a Contract
Testimonials Fact vs Puffery
State Regulation
In addition to recognizing decisions by the federal courts regarding false or deceptive practices, many states have special controls and regulations governing the advertising of specific industries or practices.
In addition to recognizing decisions by the federal courts regarding false or deceptive practices, many states have special controls and regulations governing the advertising of specific industries or practices.
© 2013 SAGE Publications, Inc.
Self Regulation
• Industry/Trade—BBB, NARC• Corporate standards• Media standards and practices• Community standards• Cultural standards
Deceptive advertising
False or misleading claimsUnfair or harmful
If part of the ad is false, all of it is
false
Substantiation
Supported by factsCan it stand up in
court?
Puffery
Subjective opinions, superlatives or exaggerations
generally stating no specific facts.
A reasonable person knows the claims are
exaggerated.
“The bigger the lie, the safe the claim.”
Corrective advertising
Remedy for deceptive ads or misinformation
contained in previous ads.
Copyright ©
Exclusive right granted to authors, artists to protect original work from being plagiarized, sold or used without their consent.
- Does not protect ideas — only how they are expressed.
-Registration with the U.S. Copyright Office typically gives a legal advantage to creative copyright owners, but is not “required” for copyright protection.
- “Fair Use” provisions – a legal protection against infringement claims.
Trademark
Any word, name, symbol or device to identify goods and distinguish them from others.
™ ® Registered trademark-lets everyone know it’s registered
TESS-Trademark Electronic Search System of U.S. Office of Patents and Trademarks