5 Written questions
5 Matching questions
- Oxydol Example
- Ways advertisers can get in trouble with comparative advertising
- Substantiation definition and types
- Three different definitions of "Unfairness"
- James Miller
- a 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")
- b 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."
- 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 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)
- e Ran the FTC during the Reagan administration. He was from the Chicago economic thought. He wanted Congress to add his definition, Congress refused but he made it into an FTC policy. Deception policy was changed from "capacity OR tendency to mislead" to "capacity AND tendency to mislead". Raised the standard to prove deception. Less regulation and less consumer protection.
5 Multiple choice questions
- 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
- The Lanham Act allows competitors to sue, the FTC is only the government. Also this act allows punitive damages. You can sue for 3x damages, meaning that you can earn 3x what you lost on the competitors infringement on your trademark. You can also sue the competitor for the profits they made.
- Harder to prove. The FTC must prove that there is a difference b/t the conveyed message and the product attributes
- 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.
- 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)
5 True/False questions
Important criteria the FTC uses in determining which ads to regulate → FDA (Food and Drug Administration): Federal Food, Drugs, & Cosmetic Acts. Ads for food products, for example.
FCC (Federal Communications Commission): Communication Acts. Things on TV can be controlled here
SEC (Securities Exchange Commission): Can influence advertising for things in its jurisdiction
What is the black box process → Section 13B was added in the mid 1970's to the FTC. It allows the FTC to step in and stop ads immediately, "stop until this case is decided." This was done b/c advertisers were being charged w/ deceptive advertising and running their ad and keep appealing in order to keep from having to stop running their ads, it would take years to make their ads stop. Section 13B is more powerful than an FTC remedy.
Consumer Redress → 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
Examples of deceptive mock-up → 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.
Lanham Trademark Act, Section 43 (a) → Section 13B was added in the mid 1970's to the FTC. It allows the FTC to step in and stop ads immediately, "stop until this case is decided." This was done b/c advertisers were being charged w/ deceptive advertising and running their ad and keep appealing in order to keep from having to stop running their ads, it would take years to make their ads stop. Section 13B is more powerful than an FTC remedy.