Advertising Law. Self Regulation Federal Regulation State Regulation Federal Regulation Self...

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


MediaMediaThe PublicThe Public



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




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



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


be truthful


be truthful


be truthful

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





Advertising and the First Amendment

Political Advertising – Harmful speech ok?

Federal Communications

Commission (FCC)


Commission (FCC)

Food and Drug Administration

(FDA)


(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)


(FTC)

U.S. Postal Service

U.S. Postal Service


(FDA)


(FDA)


Commission (FCC)


Commission (FCC)


(FTC) *


(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


Causes substantial physical or economic injury to

consumers


consumers




consumers


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


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


AdvertisingSubstantiation


Cease andDesist OrdersCease and

Desist OrdersCorrectiveAdvertisingCorrectiveAdvertising

Cease andDesist OrdersCease and

Desist Orders




(i.e. disclaimers)


(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 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





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

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