5 Written questions
5 Matching questions
- Consumer Redress
- Substantiation definition and types
- Three different definitions of "Unfairness"
- Airlines Guidelines
- Conveyed Message
- 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 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")
- c Airlines were running ads offering great deals. However, the deals were misleading because there was only a few tickets at that price and the hotels were gross. States complained b/c the FTC was not doing anything. Guidelines forced airlines to publish a disclosure of limitations but the disclosure tended to take up 3/4 of the ad. The FTC didn't like this but there was nothing the FTC could do to stop the states. The Department of Transportation after some controversy was found to be in charge and threw out the airlines guidelines.
- d What is received; how the consumer interprets the ad. Comparing what is happening in the consumer's mind to what the product attribute is = a measure of deceptive advertising.
- e 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.
5 Multiple choice questions
- 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.
- General Definition - Opinions not believed to be facts and which are not demonstrably false. Example The leading brand
FTC Definition - "Claims that reasonable people d/n believe to be fact AND which can't be proved true or false
Colloquial Definition - Exaggeration or hyperbole (Preston); people know that companies overstate so the colloquial definition of puffery may be deceptive, but what the FTC has defined is not
- If you make a claim that endangers someone's safety these act can regulate.
- 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
5 True/False questions
Additional concerns (from public as response to FCC speech) for child advertising → Additional concerns (from public as response to FCC speech):
1. Causes disillusionment: When a product doesn't live up to a child's fantasy. (Ex: Sea monkeys on the back of the comic book.)
2. Causes cynicism: Distrust created by advertising.
3. Causes parent-child conflicts (Ex: Some children would throw fits when they didn't get what they wanted. Disciplinary problems would result from these ads.)
The Bottom Line: Advertisers are bigger, and older, and smarter, and have a responsibility to uphold. It is unethical to use superior power to manipulate young minds. Advertisers are in the position to manipulate kids.
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.
Explicit → Harder to prove. The FTC must prove that there is a difference b/t the conveyed message and the product attributes
Concerns of children's advertising → 1. Free speech
2. Better Knowledge (consumer sovereignty/the consumer receives more informaiton)
3. Lowers prices
4. Forces upgrades
5. May rpovide better informaiton
Trade Regulation Rules (TRRs) → 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