Download pember18_ppt_ch15

Mass Media Law
18th Edition
Don Pember
Clay Calvert
Chapter 15
Regulation of Advertising
McGraw-Hill/Irwin
© 2013 McGraw-Hill Companies. All Rights Reserved.
Advertising and the First
Amendment
• Commercial Speech Doctrine
– Truthful and non-misleading advertising about lawful
goods and services receives an intermediate level of
First Amendment protection—more protection than
speech such as obscenity, which is not protected by
the First Amendment, but less protection than political
speech, which often is said to be at the core of the
First Amendment.
– False or misleading advertising, as well as advertising
about unlawful goods and services, receives no First
Amendment protection.
15-2
Advertising and the First
Amendment
Commercial Speech Doctrine Analysis
– Is it commercial speech?
• “speech that does no more than propose a commercial
transaction”
• “expression related solely to the economic interests of the
speaker and its audience”
15-3
Advertising and the First
Amendment
Commercial Speech Doctrine Analysis
– If it is commercial speech, then is the speech false or
misleading, or does it pertain to an unlawful product
or service?
• If so, then it receives no First Amendment
protection and the analysis ends.
15-4
Advertising and the First
Amendment
Commercial Speech Doctrine Analysis
– If the commercial speech is true, non-misleading, and
pertains to a lawful product or service, then it receives
First Amendment protection. It may, however, still be
regulated and restricted if the government can prove:
1. There is a substantial government interest that justifies the
regulation;
2. There is some evidence the regulation directly advances
the substantial interest; and
3. There is a reasonable fit between the state interest and the
government regulation.
15-5
The Regulation of
Advertising
•Lawsuits By Competitors and Consumers
– Lanham Act: Section 43(a) allows for federal civil
lawsuits based upon both false advertising and false
endorsements.
15-6
The Regulation of
Advertising
• State and Local Laws
– States regulation of advertising predates federal
regulation.
– Many states have unfair and deceptive acts and
practices statutes, known as “Little FTC Acts.”
15-7
The Regulation of
Advertising
• Federal Regulation
– Federal Trade Commission (FTC) - Nearly 100
years old, the FTC polices unfair methods of business
competition and protects consumers from deceptive
advertisements.
– Food and Drug Administration (FDA) - Responsible
for protecting public health and ensuring that products
like cosmetics, drugs, and food are honestly and
accurately represented to the public.
15-8
The Regulation of
Advertising
• Telemarketing
– In 2003, the FTC initiated the National Do Not Call
Registry that allows people to block the calls of
telemarketers.
• Advertisers claimed the Registry violated their First
Amendment rights to free speech.
• The 10th Circuit ruled in 2004 that the Registry did not violate
First Amendment rights because the government asserted a
“substantial interest” and the Registry directly advanced that
interest.
15-9
The Regulation of
Advertising
• Regulating Junk E-Mail and Spam
– CAN-SPAM Act of 2003:
• False/Misleading Messages – are prohibited under the law.
• Functioning Return Addresses and Opt-Out Mechanism
– all commercial e-mail messages must contain either a
functioning return e-mail address or an “opt-out” mechanism.
• 10-Day Prohibition Period – spam senders are barred from
transmitting e-mails for 10 business days to anyone who
opted out originally.
15-10
The Regulation of
Advertising
• Regulating Junk E-Mail and Spam
– CAN-SPAM Act of 2003:
• Disclosure Requirements – all commercial e-mails must
disclose a) it is an advertisement or solicitation, b) an opt-out
mechanism, and c) a “valid physical postal address.”
• Aggravated Violations – additional penalties may be
applied to those who a) engage in e-mail “harvesting,” b) use
multiple e-mail accounts for commercial messages, or c) use
unauthorized relays for commercial e-mail.
15-11
Federal Trade Commission
• False Advertising Defined
1.
There must be a representation, omission or
practice that is likely to mislead or to confuse the
consumer.
2.
The act or practice must be considered from the
perspective of a “reasonable consumer.”
3.
The representation, omission, or practice must be
“material” such that it is likely to influence the
purchasing decision.
15-12
Federal Trade Commission
• Means to Police Deceptive Advertising
– Guides
– Voluntary Compliance
– Consent Agreement
– Litigated Orders
15-13
Federal Trade Commission
• Means to Police Deceptive Advertising
– Substantiation
– Corrective Advertising
– Injunctions
– Trade Regulation Rules
15-14
The Regulatory Process
• Procedures
1. The advertiser can agree to sign the agreement, and
the commissioners vote to accept the agreement.
The order is published and made final in 60 days.
2. The advertiser can agree to sign the agreement, but
the commissioners reject it.
3. The advertiser can refuse to sign the agreement.
15-15
Special Cases of Deceptive
Advertising
• Testimonials
– Testimonial – an advertising message that
consumers are likely to believe reflects the opinions,
beliefs, findings or experience of a party other than
the sponsoring advertiser.
• The endorsement can be communicated by a verbal
message, demonstration, picture or likeness, signature or
other identifying personal characteristic or the seal of an
organization.
15-16
Special Cases of Deceptive
Advertising
• Testimonials
– A celebrity or expert endorser must be a bona fide user of the
product.
– When an organization endorses a product, there must be
evidence that the endorsement represents the collective
judgment of the members.
– An endorser cannot make any statement about a product that an
advertiser cannot make.
– Endorsements that the claim comes from typical consumers
must be made by consumers.
15-17
Special Cases of Deceptive
Advertising
• Bait and Switch Advertising
– Bait and switch advertising – lures consumers into
a store who are in the market for an item seen at one
price. The merchant then claims the product is not
available at the price but another model can be
purchased at a high price.
• This practice is illegal.
15-18
Special Cases of Deceptive
Advertising
• Defenses
– The primary defense for deceptive advertising is
truth, that the product does what the advertiser
claims, is made how it was claimed to be made
and/or is beneficial in the way presented.
– May also argue the claim in question is not material,
and therefore will not impact a purchasing decision.
15-19
Special Cases of Deceptive
Advertising
• Advertising Agency/Publisher Liability
– Traditionally, advertising agencies and publishers
were not held liable in cases of false or harmful
advertising.
• Recent cases, however, have held some agencies
and publishers liable in some circumstances.
15-20