Advertising and Commercial Speech: FTC Regulations

Question 1

FTC

Answer 1

agency in charge of establishing and enforcing rules regarding advertising and commercial speech. FTC defines things like- reasonable consumer and harm.

Question 2

Deceptive Advertising

Answer 2

• “contains a representation or omission of information that is material and likely to mislead a consumer acting reasonably under the circumstances, to a consumer’s detriment”
• is likely going to affect the consumer’s conduct or decision with regard to a product or service
• consumer injury is likely, because consumers are likely to have chosen differently but for the deception

Question 3

reasonable consumer standard

Answer 3

• whether the consumer’s interpretation is reasonable- will play a significant role in determining if advertising is being deceptive.
• FTC does not seek to protect the foolish or feeble minded from advertising
• Analysis will consider the target audience

Question 4

harm

Answer 4

“Injury exists if consumers would have chosen differently but for deception. If different choices are likely, the claim is material and injury is likely as well”
This is a legal definition.
We live in the age of internet complaints…very easy to file against you.

Question 5

FTC on deception

Answer 5

• there must be representation, omission, or practice that is likely to mislead the consumer
• The act or practice must be considered from the perspective of a consumer who is acting reasonably
• A company is not liable for every interpretation or action by a consumer. In an advertising context, this principle has been well-stated:
• When representations or sales practices are targeted to a specific audience, such as children, the elderly, or the terminally ill, the Commission determines the effect of the practice on a reasonable member of that group.
• The representation, omission or practice must be material

Question 6

substantiation

Answer 6

• advertising must tell the truth and not mislead consumers. A claim can be misleading if relevant information is left out or if the claim implies something that’s not true.

For example, a lease advertisement for an automobile that promotes “$0 Down” may be misleading if significant and undisclosed charges are due at lease signing.

Question 7

endorsements

Answer 7

• Endorsements must be truthful and not misleading;
• If the advertiser doesn’t have proof that the endorser’s experience represents what consumers will achieve by using the product, the ad must clearly and conspicuously disclose the generally expected results in the depicted circumstances
• If there’s a connection between the endorser and the marketer of the product that would affect how people evaluate the endorsement, it should be disclosed.