5 Written Questions
5 Matching Questions
- Reasonable Man Standard
- Three different definitions of "Unfairness"
- Lasting Residual Effect
- Arguments against comparative advertising
- a 1. (1970) Immoral, unethical, oppressive or unscrupulous conduct. Problem was that it was very broad. An example is Arthur Murray Dance Studio (overreaching)
2. (1980) Unfairness Policy - Deception is a small circle that is in unfairness. The problem was that the SC said that unfairness did not include deception. Deception was just the possibility to get hurt where as unfairness someone actually had to be harmed for the FTC to take action under this definition. Example - the Harvester tractors
3. (1994) "causes or is likely to cause substantial injury to consumers, not reasonably-avoidable by consumers and not out weighed by countervailing benefits to consumers or to competition."
- b A ______ is an obvious lie; they are falase facts that are not believed and are not deceptive. Two types of spoofs explicit and implied
- c FTC decided they would only protect those acting reasonably under the circumstances. Examples of unreason-ability (Clairol case and Invisible floating device case). Used to be the ignorant man standard.
- d 1. Honor/reputation
2. bootstrapping (pulling yourself up by others' bootstraps)
4. Consumers, not advertisers should decide which brand is better
5. incomplete picture
6. destructive to a specific market
7. reduce credibility of advertising
8. meaningful comparison is impossible
9. consumer confusion
10. help enemy
- e Cease and desist still allows the company to earn profit from the advertisement, while corrective advertising takes into consideration residual profit (profit after not running the ad) and the decay of the ad once it is pulled.
5 Multiple Choice Questions
- Deceptiveness, alone, is not enough - in order to deceive the message must also be material; it must affect purchase behavior. It is okay to deceive if it is trivial. (If you photoshopped the building of a car dealership to a different color, this is deceiving, but a blue building is trivial, or immaterial.)
- In 1974 it added onto NAD/NARB, unit tasked with focusing only on children's advertising (Kellogs and Matel chipped in to help form it). It was small but fairly effective
- 1. Free speech
2. Better Knowledge (consumer sovereignty/the consumer receives more informaiton)
3. Lowers prices
4. Forces upgrades
5. May rpovide better informaiton
- 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
- Definition: The basis for making a claim in an ad. Before the 1970s the FTC allowed any claims and tested it if doubted, now the FTC required evidence of "claims" BE ON HAND before being charged with deceptive adv. If an advertiser does not have it on file then they are found guilty.
Types: Assumption, express claim (states the evidence in the claim), implied claims ("if 4 our of 5 doctors recommend it, it implies that 80% of doctors would agree", unclear claims ("this cleaner will remove stains from white carpet" harder to determine the substantiation. NEED at least a reasonable basis for this claim")
5 True/False Questions
7 Privacy Issues on the Internet → 1. Intrusiveness (spam,popups,accessing personal info)
2. Access to personal info (cookies, spyware, employee tracking, encryption technology)
3. Deception - Can't see your face on the Internet
4. Intellectual property - Easy to violate copyright laws
5. Phising - misuse of private info
6. Employee info
What is Section 13B → Deceptiveness, alone, is not enough - in order to deceive the message must also be material; it must affect purchase behavior. It is okay to deceive if it is trivial. (If you photoshopped the building of a car dealership to a different color, this is deceiving, but a blue building is trivial, or immaterial.)
Explicit → If the ad says "the color is blue". In this case the FTC has to look at the message and assume that the conveyed meaning and literal message are identical.
FTCs purpose → Promotion of consumer protection and prevention of anticompetitive business practices.
Consent Orders → The advertiser agrees to do whatever the FTC says to do. This is the way a case stops before a remedy is ordered. Advertisers do this because a. it is less damaging b. the legal process is expensive c. It is more negotiable at this point d. a cease and desist last forever e. the FTC rarely losses f. If an ad is published for so little time, you probably got your money's worth out of the ad, so what's the point in fighting the FTC