Advertising Marketing Law

An ad will be considered deceptive if there is…
1. misrepresentation, omission, or practice
that is likely to mislead a consumer who is
2. acting reasonably
and the
3. misrepresentation, omission, or practice
is material one (likely to affect buyers decision)

The intent of the advertiser to deceive is NOT relevant

-advertising or other sales presentations which praise the item to be sold with subjective opinions, super-latives, or exaggerations, vaguely and generally, stating no specific facts
If viewed as a whole and the ad leads to a false —- then it is deceptive even if all claims are —-
impression; true
It is deceptive if there is —-representation of the — and — of the product
material; nature and effectiveness
It is deceptive if there is —-misrepresentation of the — and — of the business
material; nature and standing
It is deceptive if competitors are —with no basis in fact
disparaged- regarded as little worth
Vidal Sassoon vs. Bristol-Myers
deceptive advertising- shampoo
FTC Remedies for Deceptive Advertising
1. Cease of Disist Orders (Consent Decrees)
2. Counter Advertising
3. Advertising Substantiation
Consent decrees (Cease or Disist Orders)
• Most commonly used FTC remedy;
– it is a written agreement between the commission and the advertiser in which the advertiser agrees to refrain from making specific product claims in future advertising
Counter Advertising
1. Affirmative disclosure
2. Corrective Advertising
-makes the advertiser to inform the public that what is has not been honest or has been misleading

Case: Listerine (1977) & Doan’s (1996)

Advertising Substantiation
the commission ask advertisers to substantiate or show proof of the information to support the claims made in their advertisement

Case: Pfizer, Inc. (1972)

National Adverting Division of Council of Better
investigate and hear complaints against advertisers.
If they rule against the advertiser, they can request either modification or withdrawal of the ad
The decision can also be appealed to the National Advertising Review Board
A five member panel is formed and reviews the case.
-If they also rule against the advertiser, they can request modification or withdrawal of the ad.
-If the advertiser refuses, the case is turned over to the FTC
mock ups (or models of something) can be deceptive if it may materially affect the purchase decision
Campbell Soup (1970)
held liable for putting marbles at the bottom of soup in ads to make the ingredients rise to the top, making the soup look more full
Cents off labeling is deceptive unless:
1. product has been sold at a regular price in the past
2. price reduction is equal to the % off claim
3. regular price is clearly displayed
Economy Size Labeling is deceptive unless:
1. same brand is available in other sizes
2. savings is at least 5%
Bait and Switch Advertising
This involves advertising a product at a low price, but then discouraging purchase of it by trying to switch consumers to a higher priced product
Bait and Switch Advertising is characterized by:
1. refusal to demonstrate/sell product
2. poorly displaying product/ displaying defective product
3. failing to have adequate inventories to meet demand
Contests disclosure requirements:
-Exact number of prizes to be awarded.
-Odds of Winning.
-Duration and Termination of Promotion.
-Availability of lists of winners
A contest must NOT involve a lottery… A lottery (gambling) is involved if:
a) a prize is offered.
b) winning depends on chance or luck,
c) AND if contestants must give up something
to win
Easiest way to avoid lottery it to?
avoid requiring a purchase to enter
1. must reflect HONEST opinion, belief, or experience

2. Endorser can’t make claims about the product that the advertiser can’t SUBSTANTIATE or prove

3. ENDORSOR MUST USE PRODUCT and advertiser must believe they use product

4. Real consumers can be used, but experiences portrayed must be typical. If actors portray real consumers, this must be disclosed

5.MATERIAL CONNECTIONS that consumers would not be likely to expect must be disclosed (i.e., endorser owns the company

6. Both ADVERTISERS and ENDORSORS may be LIABLE for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers.

Expert Endorsors
Any individual who as a result of experience,
study or training possesses knowledge of a
particular subject that is superior to that of the
average person
If an endorser is perceived as an expert, then
the product and product characteristics must be in endorsors area of expertise

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