5 Written Questions
5 Matching Questions
- New Definition of Materiality
- Evaluative/Implied claims
- Oxydol Example
- Mortimer Snerd
- Rental Car Guidelines
- a These are the hardest claims to prove b/c it is a matter of opinion. The FTC will most likely NOT attack evaluative claim,s but there have been some regulation on them. Examples Vivarin Case/Wonder Bread Case
- b The states realized that there was no agency for rental cars so the FTC had no power over the states. As a result, the states wrote regulations for the rental car industry that required disclosure of information. Similar thing happened in food advertising. By the end of the Regan administration the FTC realized that it was not going to be able to keep states out of regulating national advertising so the FTC started to work with the states.
- c Dealing with materiality. - In the early 1970s, it started advertising that it was the laundry detergent with the green crystals. The implication was that the green crystals made it better. You buy the laundry detergent and find out that the crystals are blue. You have been deceived because the crystals are blue NOT green but no one cares. It does not matter. This is an example of a trivial exception it is NOT material. No one will get hurt based on trivial deception.
- d "Likely to affect their choice of, or CONDUCT regarding a product." Conduct includes driving to the store and not necessarily buying the product. The mere act of getting someone to go out of their way is enough to be material. This occurred during the Reagan administration
- e A character of Edgar Bergen's, a famous ventriloquist from the 1950s. He represents the least common denominator of intelligence. The FTC said that their protection is for experts, and "ignorant, unthinking and the credulous." Snerd represented the "ignorant man standard," which was later replaced by the reasonable man standard.
5 Multiple Choice Questions
- These are LAWS published by the FTC. Regulations on: Premiums and Prizes, Children's online privacy, Televisions and Amplifiers: to make sure TV manufacturers measure the same way), Telemarketing & Mail Order, Making false guarantees, Endorsements, The leather content of belts, etc
- Consumer Credit Protection Act
Consumer Products Safety Act
Lanham Trademark Act
Fur Products Labeling Act
Flammable Fabric Act
- The FTC went too far in this case. ______ was charged with deceptive advertising for selling permanent hair color. The FTC thought that the word permanent would mislead women into thinking that it would color hair that hadn't grown out yet. A woman testified about the third person effect of this. People complained and said that the FTC had gone too far to protect ignoramuses. Help lead to the reasonable man standard.
- 1. Cease and desist order (most common) - asks advertiser to stop, but can keep any ads from the past
2. Affirmative disclosure - forced speech; the FTC asks a company to start affirmatively disclose information (continuous/triggered). The problem here is what is NOT being said
3. Corrective advertising - correcting past claims (Campbell's Soup /Listerine)
- If you make a claim that endangers someone's safety these act can regulate.
5 True/False Questions
What are the pros/cons with government regulation → It put less pressure on the FTC to prove deception and it put more pressure on the advertiser to prove truthfulness. It shifted the burden of proof from the FTC to the advertiser. The advertiser is "guilty until proven innocent"
Ways advertisers can get in trouble with comparative advertising → 1. Disparagement (tort) - protects a company, product or brand from being badmouthed/lied about
2. Defamation - same thing, but about people - MUST be a lie (libel=written/slander=spoken)
FTCs purpose → Promotion of consumer protection and prevention of anticompetitive business practices.
Social-psychological representations/Evaluative claims → These are the I prefer... claims. They are different from factual claims. These claims have a higher potential to deceive b/c of perception differences. These "feeling claims" are very hard to prove. They are EXTRINSIC to the product (not a phsyical part of it). ONLY the consumer can EVALUATE if the ad delivered what it said. Examples - Seagrams gin is "smooth" AND "Feel like a man" AND Maxwell house instant relation.
Consent Orders → Order advertisers to pay back money to consumers. It gives the FTC real power. The FTC is supposed to only use in the worst cases, but has found many worst cases.