5 Written Questions
5 Matching Questions
- Mortimer Snerd
- Old Definition of Materiality
- Pros/Cons of self regulation
- Ways advertisers can get in trouble with comparative advertising
- a "The natural and probable result is to cause one to do that which he would not otherwise do." Ie. If you knew the crystals were blue and not green would you still buy the product - yes!
- b 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)
- c PROS - Faster/cheaper and more efficient than gov't regulation, can complement government regulation rather than replace it, more stringent (can do things the law cannot), can deal with issues government cannot touch, promoting moral adhesion to the law, looks better
CONS - Lack of means of enforcement, self serving, keeps government at bay (Tipper Gore), Can get in trouble with anti-trust laws, notoriously under-financed, frequently top-down (no consumer input)
- d 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.
- e 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.
5 Multiple Choice Questions
- ______ is the FTC's version of the "scarlet letter". involves admitting that the deception is made and correcting the mistake. However, the problem is that the FTC is not supposed to punish.
- 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.)
- This group is in charge of advertising self-regulation in the US. It is a division of CBBB. If NAD gets a lot of complaints about an advertiser they look into it. The NAD is selective about protecting competitors. Is solely about protecting public interest. The National Advertising Review Board (NARB) is were advertisers can go to appeal a decision. A panel made up of 3 advertisers, 1 ad agency and 1 public rep. hear the case then the NARB hands down the decision to the advertiser. The NARB can enforce via press release / hand case over to the FTC
- 1. Privacy (spam-intrusiveness/phishing=misuse of private info;gathering personal information, gets enough info and can get into bank account etc.)
3. Protecting children
4. vary from state to state
5. Social Problems - Internet addiction to tobacco industry's own website
6. Copyrights and trademarks - easy to copy and steal other's publications
7. Regulation - who is going to regulate/who is in charge of the Internet
5 True/False Questions
Balkanization → Comes from the Balkan wars where territories were broken up. Advertising regulation would break up into a lot of parts and there would be no unified regulations so any national advertiser would face completely different laws from state to state. As a result the National Association of Attorneys General (NAAG) said the FTC had a point and created guidelines that said if you follow them you will stay out of trouble.
Oxydol Example → 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.
FTCs purpose → A ______ is an obvious lie; they are falase facts that are not believed and are not deceptive. Two types of spoofs explicit and implied
Examples of corrective advertising → 1. Campbell's Soup - Claimed to have more meat/veggies in their soup, but used marbles to make the chunks rise to top. (1970) Banzhaf's students Students Opposing Unfair Practices (SOUP). However, this case was strong enough to implement a Cease and Desist order, so turned to Listerine Case.
2. Listerine - Had been telling consumers for 100 years that Listerine would prevent colds, which was a lie. By the time the FDA was formed, Listerine had already made the claim so the FDA grandfathered in the claim, but prevented others from making the claim. Listerine had to disclose: "Contrary to prior advertising, Listerine will not help prevent colds or sore throats or lessen their severity." Listerine appealed and the FTC decided Listerine could take out the first four words because it was too much like punishment.
Are opinions puffery? → Preston - Spoofs = puffery and they are deceptive because some people believe them. He calls puffery a safe harbor b/c the FTC ignores puffery.
Richards/FTC - No. puffery is not deceptive, it is a form of opinion and an exaggeration is expected and does not create a resonable falsity. If no one believes them then it is NOT deceptive. However, opinions that imply facts/can be reduced to a fact can be regulated