5 Written questions
5 Matching questions
- Examples of corrective advertising
- What are the pros/cons with government regulation
- Acts that can regulate advertisements
- Are opinions puffery?
- a 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
- b 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.
- c Pros - Universal reach, Compulsion (definitive means of compulsion)
Cons - Oppressive, Ineffectual, Costly, Rigid, Conflicting laws, weakly enforced
- d Possibility
- e Consumer Credit Protection Act
Consumer Products Safety Act
Lanham Trademark Act
Fur Products Labeling Act
Flammable Fabric Act
5 Multiple choice questions
- The FTC cannot punish so they cannot fine anything BUT Congress can fine advertisers for violating the order given by the FTC to cease and desist or whatnot. The fine from Congress use-to-be $5000 but today it is $10000
- "Likely to affect their choice of, or CONDUCT regarding a product." Conduct includes driving to the store and not necessarily buying the product. The mere act of getting someone to go out of their way is enough to be material. This occurred during the Reagan administration
- 1. Free speech
2. Better Knowledge (consumer sovereignty/the consumer receives more informaiton)
3. Lowers prices
4. Forces upgrades
5. May rpovide better informaiton
- 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.
- 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
Consumer Redress → 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.
What is a "little FTC act" → A law that in large part does what the FTC does, but on the state level. 1960s: Nader & American Bar Association (ABA) claimed that FTC did a lousy job of protecting consumers. FTC claimed they did not have enough power so "little FTC act" was created at the state level.
Texas Deceptive Trade Practices Act (TDTPA) → An ad is _______ if there is a representation, omission or practice that is likely to mislead consumers acting REASONABLY under the circumstances and it is MATERIAL.
Ways advertisers can get in trouble with comparative advertising → 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
Implied → 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.