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5 Written questions

5 Matching questions

  1. How and when did states begin regulating national advertising
  2. Important criteria the FTC uses in determining which ads to regulate
  3. Implied
  4. Examples of corrective advertising
  5. Old Definition of Materiality
  1. a Harder to prove. The FTC must prove that there is a difference b/t the conveyed message and the product attributes
  2. b "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!
  3. c (1969) Nader and the ABA conduct studies that claimed that the FTC was doing too little to protect consumers. The FTC claimed that they didn't have enough man power to regulate everything. FTC suggested that the states help out with the "Little FTC Act". Abrams in NY did a lot of regulation because so many ads were created in NY. Jim Maddox (TX attorney general) started regulating any national advertisement done in TX. This resulted in balkanization.
  4. d 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.
  5. e 1. potential harm of the claim
    2. The number of people affected
    3. Political visibility of the case

5 Multiple choice questions

  1. Geritol decided it was better business to pay $5000/day (the fine at the time) than to stop running ads, but continued to run the ads after the cease and desist because running the ad was more profitable
  2. 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)
  3. Protects against a statutory version of palming off. It is a trademark law designed to make sure that someone who owns a trademark has protection over that trademark. Logos can be part of trademarks but they are not the same thing. Example: Two Pesos, which had a pink color like Taco Cabana, and looked a lot like it (and in reality was the old partner of Taco Cabana). Taco C won the case.
  4. 1. Type of claim
    2. Type of product advertised
    3. Consequences of the false claim
    4. Benefits of a truthful claim
    5. Cost of developing substantiation - FTC will also consider how much time/money goes into substantiating the claim
    6. What experts in the field think is reasonable
  5. The FTC will not reveal its exact methodology in choosing which cases to investigate because it does not want to give advertiser their game plan

5 True/False questions

  1. Rental Car GuidelinesThe 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.

          

  2. Trade Regulation Rules (TRRs)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

          

  3. Arguments against comparative advertising1. 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.

          

  4. Concerns of children's advertising1. Distortion of product performance: causing children to expect something that d/n pan out
    2. Confusion over prices: leads to disappointment
    3. Promoting poor nutrition habits
    4. Premiums that create artificial demand: showcasing toys as benefit of cereal
    5. surrogate salesmen (child begs parent for something)
    6. promise to affect mood or well being
    7. use of programmed character to sell products
    8. products/ads that might call psychological harm

          

  5. Children's Advertising Review Unit (CARU)______ 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.

          

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