Chapter 14 Regulations and Ethical Concerns Flashcards
What does the FDA monitor?
Regulates and oversees the packaging and labeling of products.
What does the FCC monitor?
Regulates television, radio, and the telephone industry.
What does the FTC monitor?
Presides over marketing communications.
What is puffery?
When a firm makes an exaggerated statement about its goods or services. (Does not constitute a factual statement.)
What does The FTC test of substantiation require?
Means that an advertising claim or promise must be proven with data, facts, or through competent and reliable evidence. (For claims that are not puffery)
What is a consent order?
When the FTC believes a law has been violated, it issues a consent order. Company leaders who sign consent orders agree to stop a disputed practice without admitting guilt.
What is a cease and desist order?
When a judge rules a law has been violated, The order requires the company to stop the disputed practice immediately and refrain from similar practices in the future.
What is corrective advertising?
Ads that bring a consumer back to a neutral state, so consumers once again hold beliefs they had prior to being exposed to a false or misleading advertisement.
Why might someone contact the Better Business Bureau?
Consumers seeking information about the legitimacy of a company or its operations can contact the bureau.
What are business ethics?
Moral principles that serve as guidelines for both individuals and organizations.
What is brand infringement?
Occurs when a company creates a brand name that closely resembles a popular or successful brand.
What is domain squatting?
Buying domain names that are valuable to specific people or businesses in the hopes of making a profit by reselling the name.
