Amazon

ADVERTISING LAW

LIMITS What do you think should be the limits placed on advertisers? Should a particular audience be protected?

Seven Rules for Legal Advertising Rule 1 – Be Accurate Rule 2 – Get Permission Rule 3 – Treat Competitors Fairly

Seven Rules for Legal Advertising Rule 4 – Have Sufficient Quantiies on Hand Rule 5 – Watch out for the Word “Free” Rule 6 – Be Careful When You Describe Sales and Savings

Seven Rules for Legal Advertising Rule 7 – Observe Limitations on Offers of Credit

Don't Get Green Washed Deceptive Credit Ads Deceptive Drug Ads Misleading or not?

Super Bowl 2014 30 second spot – 4 Million Dollars Jaguar’s build up to the Super Bowl Jaguar Advertisement

RESTRAINTS ON ADVERTISING 3 Primary restraints 1. Laws and regulation of legally established bodies 2. Control by the media 3. Self-regulation by independent organizations by the company codes of conduct

ROOT OF SELF AND GOVERNMENT REGULATION Reform mood of late 19th and early 20th Century Manifestations: a. Muckraking Sherman Antitrust act of 1890 Clayton Act of 1914 “Tend to lessen competition or to create a monopoly in any line of commerce”

ROOT OF SELF AND GOVERNMENT REGULATION Printer’s Ink Model of Advertising Federal Trade Commission act of 1914 Forces brought about by Yellow Journalism of 1890s Rise of modern advertising and marketing

FTC ACT and the FEDERAL TRADE COMMISSION Basic Power of FTC found in Section 5 a. Given task of “preventing unfair method of competition in commerce” in original Section 5. B. “And unfair or deceptive acts of practices in commerce added in Wheeler-Lea Act of 1938.

FTC ACT and the FEDERAL TRADE COMMISSION c. “Affecting commerce” added in the FTC Improvement Act of 1975 Section 12 added in 1938: defined false advertising as “unfair or deceptive act in commerce.”

FTC ACT and the FEDERAL TRADE COMMISSION Wheeler-Lea Act established a caveat venditor policy Old policy -- caveat emptor rule

FTC ACT and the FEDERAL TRADE COMMISSION Organization of the FTC The Commission has executive and rule-making powers The staff: has executive powers. Administrative Law Judges: Have judicial powers

POWERS OF FTC Publicity injections to stop ads injurious to health Industry guidelines Trade rule regulations Advisory opinions Letters of voluntary compliance Consent orders

POWERS OF FTC Cease-and-desist orders Can represent consumers in court against deceivers in the marketplace

WHAT CONSTITUTES DECEPTION “likely to deceive” test Misrepresentation of fact Qualifications (weaseling) will not save a deception An ad may deceive even though literally, technically true

WHAT CONSTITUTES DECEPTION “Substantial test data” must support specific, scientific claims Product claims not made on “Reasonable basis” are deceptive. Packaging must be reasonably related to the product so as not deceive.

WHAT CONSTITUTES DECEPTION Non-disclosure of material fact is deception FTC v. Colgate Puffery is given a good deal of protection when claims are general; when claims are specific puffery is deception

Terms Unfairness doctrine Ad substantiation Subliminal advertising Corrective advertising Affirmative disclosure Disparagement

QUESTIONS? Does a medium have the right to refuse advertising? Do celebrities used in product endorsements have to use the product?

CONSTITUTIONALITY OF ADVERTISING REGULATION Valentive v. Chrestensen New York Times v. Sullivan Colgate

CONSTITUTIONALITY OF ADVERTISING REGULATION Central Hudson v. Public Service Commission Posadas de Puerto Rico Associates v. Tourism Eimann v. Soldier of Fortune