Docstoc

Regulation of Advertising

Document Sample
Regulation of Advertising Powered By Docstoc
					       Commonwealth of Pennsylvania. v.
           Pittsburgh Press (1979)
      SITUATION Wanted ads
      Distinguished from HELP wanted




Chapter 10        Regulation of Advertising   1
             Bigelow v. Virginia (1975)

      NY Abortion clinic                   UNWANTED PREGNANCY?
                                                       LET US HELP YOU
      VA newspaper
      Again, not PURELY                         Abortions are now legal in New York.
                                                 There are no residency requirements.
       commercial speech
                                         


                                              FOR IMMEDIATE PLACEMENT IN
                                            ACCREDITED HOSPITALS AND CLINICS
                                                     AT LOW COST,
                                                         Contact

                                                         WOMEN'S PAVILION
                                                            515 Madison Avenue
                                                         New York, N.Y. 10022
                                                              or call any time
                                                     (212) 371-6670 or (212) 371-6650
                                                    AVAILABLE 7 DAYS A WEEK
                                                       STRICTLY CONFIDENTIAL.


Chapter 10             Regulation of Advertising                                        2
        VA State Bd of Pharm v VA Citizens
            Consumer Council (1976)



     Valentine overturned
     Prescription drug prices
     Purely commercial speech




Chapter 10         Regulation of Advertising   3
           Linmark Associates v.
         Town of Willingboro (1977)
                                                      For Sale




      NJ town forbids “For Sale” lawn signs
      Supreme Court invalidates rule
         It cut off a whole market

                It had political elements


Chapter 10                Regulation of Advertising              4
         Central Hudson Gas and Electric v.
                    PSC (1980)
      Tells us HOW MUCH protection
      4 part Central Hudson test




Chapter 10          Regulation of Advertising   5
                   Is the ad                  Yes        The ad can be regulated, or even
             Deceptive or for an
                                                                    prohibited
              illegal product?


                No

                  Does the
                state have a                  No           The law regulating the ad is
                 legitimate,
                                                                 unconstitutional
             substantial interest
                   here?

                Yes


                Does the law                  No           The law regulating the ad is
                 further that
                                                                 unconstitutional
                  interest?


                Yes

                  Is there a
               “reasonable fit”               No           The law regulating the ad is
              between the law                                    unconstitutional
              and the interest?

                Yes

                                                    The “Central Hudson”
    The law or regulation is constitutional
Chapter 10
                                                            Test         6
             Posadas v. Tourism Company



      Banned casino ads aimed at residents
         Dangerous Products, Services
         Meaning to “Less Restrictive” shifts




Chapter 10            Regulation of Advertising   7
             Aftermath of Posadas




Chapter 10        Regulation of Advertising   8
        Rubin v. Coors Brewing Co. (1995)




     If casinos are dangerous, isn’t alcohol too?
     Struck down bans on listing alcohol
      content on beer labels
     State tried to prevent “strength wars”

Chapter 10           Regulation of Advertising       9
             44 Liquormart v. RI (1996)




       Struck down ban on advertising
        liquor prices
       Can’t ban truthful ads about legal
        products

Chapter 10          Regulation of Advertising   10
             Lawyer Advertising


Chapter 10        Regulation of Advertising   11
       Bates v. State Bar of Arizona (1977)

      Law firm calls itself
       a legal clinic
         Listed some of its
          “reasonable
          rates”
      Not inherently
       deceptive



Chapter 10            Regulation of Advertising   12
                 In re RMJ (1982)

      St. Louis, MO attorney
      Supreme Court Bar member
      Again, not inherently deceptive




Chapter 10           Regulation of Advertising   13
             Zauderer v. Office of Disciplinary
                     Counsel (1984)
      Dalkon shield IUD ad
      Violated rules against:
         going beyond prescribed language
         mentioning yourself as what client needs
         use of illustrations
         failing to indicate fee arrangement clearly
      Only this last one stuck


Chapter 10              Regulation of Advertising       14
             Shapero v. KY Bar Assoc (1988)

      Personalized Direct mail
         More like advertising, or solicitation?
      Outright Ban Too Strict
      Preview Mailings, if necessary




Chapter 10            Regulation of Advertising     15
     Peel v. Atty. Regis. & Disc. Comm’n. (1990).

        OK to imply quality based on facts
             –   Certificate from “National Board of Trial
                 Advocacy”
        Might not be OK to simply boast about how
         good you are




Chapter 10                    Regulation of Advertising      16
       Advertising by Other Professionals




Chapter 10        Regulation of Advertising   17
         Edenfeld v. Fane (1993)

      Accountant solicitation case
      Court distinguishes attorneys from
       other professionals




Chapter 10         Regulation of Advertising   18
                  Friedman v. Rogers (1979)

      Optometrists can’t use trade names
      Possible Deceptiveness
         No intrinsic meaning
         Resting on laurels
         Hiding past transgressions




Chapter 10         Regulation of Advertising   19
             State regulation of advertising

      Often called Printers’
       Ink statutes
      Supremacy Clause
       limitations
      Threatened CSPI
       suit leads to Kellogg
       changing marketing
       practices


Chapter 10            Regulation of Advertising   20
             Federal Trade Commission

      Created in 1914
      Regulation of
       advertising only one
       of its powers
      Initially empowered
       only to field
       complaints among
       advertisers
      Now may protect
       consumers too
Chapter 10           Regulation of Advertising   21
             Three Steps in Finding Deception

      Look at the text of the ad
      Consider its meaning to reasonable
       consumers
      Consider whether any untruths are
       material




Chapter 10             Regulation of Advertising   22
                  Looking at the text:
                  And I can prove it!
      Factual claims must be
       supported
      Sound scientific? Better
       BE scientific!
      Demonstrations can be
       deceptive
         Tropicana Healthy
          Heart OJ
         Kava coffee ph
          meter
         Rapid Shave


Chapter 10              Regulation of Advertising   23
               Looking at the text:
               More than I can say
      Implying erroneous conclusions
         “Passed all inspections” vs. without defects
         Geritol, lethargy, and “iron poor blood”
         Air conditioner’s “panic button”
      Halo effect
         Anacin and “more” (aspirin)
         Sun Oil “260 action”



Chapter 10            Regulation of Advertising          24
                                  More on
                        More than I can say
      True but irrelevant                      Transgression even in
       information                               absence of actual claims
              Carnation Instant                      AB FORCE
               Breakfast and minerals




Chapter 10                     Regulation of Advertising                25
             Looking at the text:
             Did I hear that right?
      Deceptive neologisms
         “Cashmora”
      Freebies (AOL)
      “On Sale”




Chapter 10        Regulation of Advertising   26
              Looking at the text:
                Who said that?
      Basic rule is to tell the truth
         Celebrity endorsers must be users
            Is their experience typical?

            Experts must really have specific
             expertise
         Organizational endorsements must be
          genuine


Chapter 10          Regulation of Advertising    27
                            More on
                       Who said that?
      Not every endorsement triggers the rules
        Clearly fictional narratives
        Celebrities born of the ad campaign
                “Dude, you’re getting a Dell!”
                “Can you hear me now?”




Chapter 10                 Regulation of Advertising   28
             The Reasonable Consumer

      Seen as more sophisticated than in past
      Some audiences seen as more
       gullible/vulnerable
         Children (Children’s Online Privacy
          Protection Act)
         People in crisis
      Survey research often used



Chapter 10           Regulation of Advertising   29
                Material deceptions

      Material = affecting purchase decision
      Most textual claims are material
         Puffery an exception
      Visual claims more troublesome
         Mashed potatoes for ice cream?




Chapter 10           Regulation of Advertising   30
             Pizza Hut v. Papa John’s




      Text of ad might have been deceptive
      But Pizza Hut could not prove materiality



Chapter 10           Regulation of Advertising     31
                     FTC powers

      Consent order
         FTC seeks compliance; no court order
      ALJ issuing consent decree
         Then to: Commissioners; Circ. Ct., Sup.
          Ct.
      FTC can go directly to federal court for
       injunction
      Affirmative Disclosures & Corrective
       Advertising
      Industry Guides & Trade Regulation Rules
Chapter 10           Regulation of Advertising      32
                      The Lanham Act

      Advertisers may not
       “misrepresent the
         nature, characteristics,
         qualities, or geographic
         origin of [their] or
         another person's goods,
         services, or commercial
         activities.”
      Competitors more likely
       to sue than consumers                  Floss manufacturer’s suit against
                                              Listerine resulted in end to “as effective
                                              as floss” claim

Chapter 10                Regulation of Advertising                                        33
             National Advertising Division

      Industry self-regulation
      NAD can only request pulling or
       changing an ad campaign
      Restricted to national campaigns




Chapter 10           Regulation of Advertising   34
         Corporate Expenditures on Political
                    Advertising
      Corporations are generally free to spend if:
         They set up separate PACs
         They are focused, issue-oriented nonprofits
            Right to Life group OK (2007 Sup Ct. ruling affirms this)

            But not Chamber of Commerce

        OK to require candidates to appear in & indicate approval
         of their own ads in order to get lowest advertising rates




Chapter 10                  Regulation of Advertising                    35

				
DOCUMENT INFO