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36 Cards in this Set
- Front
- Back
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Three broad types of advtg regulation |
1. GOV'T REG ( FTC) 2. self reg ( NAD) 3. Private Lawsuit ( Lanham Act) |
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How does the FDA regulate advertising?
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broad control over packaging and labeling |
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How does the FTC regulate advertising?
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regulates deception or unfairness in ads.
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How does the FCC regulate advertising?
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casts broadcasting license. will check programs for what types of ads are running. |
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How does the Postal Service regulate advertising?
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controls obscenity and fraud through the mail |
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How does the BATF regulate advertising?
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jurisdiction over vice products: alcohol, tobacco, and firearms.no more cig ads on TV, appropriate labeling on cig packs |
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Explain the history of the FTC?
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established 1914- to control competition in interstate commerce. Ad control not original purpose.1938: Wheeler Lea Amend: broadened FTC power to include unfair or deceptive acts or practices in commerce. |
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Wheeler Lea Amendment |
Law that bans unfair or deceptive acts in commerce. damage to competitors need not be shown if there is deception to consumers.
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How does the FTC define deception? |
-representation/omission or practice (express or implied--implied like the handgun vs vietnam killings sign. accurate, but implied deception)
-likely to mislead customers in material respect -consumers must be acting reasonably under circumstances |
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Guidelines/Precedents regarding deception |
1. Total impressions 2. Ambiguous statement 3.Misleading silence- leaving important information out 4. Material falsehood- affects the purchase decision |
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Puffery |
- obvious exaggeration - legitimate creative license - superlatives and spoofs |
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Puffery |
- obvious exaggeration - legitimate creative license - superlatives and spoofs |
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Why is puffery allowed? |
1. Puffery is generally incapable of proof, subjective judgement
2. Consumer is expected to be reasonable in assuming that the advtg. Is an exaggeration |
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Puffery |
- obvious exaggeration - legitimate creative license - superlatives and spoofs |
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Why is puffery allowed? |
1. Puffery is generally incapable of proof, subjective judgement
2. Consumer is expected to be reasonable in assuming that the advtg. Is an exaggeration |
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Unfairness |
- precedent less developed - potential for injury - consumer can't avoid - cost greater than benefit |
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Mechanism to control unfair and deceptive practices |
1. Policy statements 2.industry guidelines- comparative advtg. 3. Trade rule 4.individual enforcement actions |
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3 stages of review and pursue process |
1. Exploratory phase 2. Litigation 3. Negotiation |
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Criteria for FTC action |
1. Interstate commerce 2. Public interest 3. FTC jurisdiction |
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Criteria for FTC action |
1. Interstate commerce 2. Public interest 3. FTC jurisdiction |
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FTC as substantiation program |
Began in 1971 by Ralph Nader
Concern claims of : - safety - performance - effectiveness - quality - price |
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FTC remedies |
1. Consent order- formal document certifying the practice will be corrected or discontinued |
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FTC remedies |
1. Consent order- formal document certifying the practice will be corrected or discontinued 2. Cease and desist 3. Fines 4. Injunctions 5. Affirmative Disclosure- disclosing information that consumer needs to know about a product esp. If it is harmful or negative 6. Corrective advtg.- correcting prior false info |
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2. Cease and desist order |
Go and sin no more Procedural delays |
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Pros of govt regulation |
1. Power of law 2. Publicity |
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Pros of govt regulation |
1. Power of law 2. Publicity |
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Cons of govt regulation |
Time lag esp with FTC Regulation by example only |
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Why attorney general should have more power |
State rights Closer to consumer Quicker |
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Why the attorney general should not have more power |
National campaigns would be impossible
Consumers would be denied uniformed protection
50 mini- FTCs |
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Lanham act |
Prohibits false representation of product Provides protection for brands and trademarks Allows consumers to sue each other directly |
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Lanham Act for deceptive advtg. |
1. False statement 2. Capacity to deceive a substantial segment 3. Material falsehood 4. Interstate commerce 5. Likely injury to either sales or goodwill |
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Competitive advtg. |
In wbk |
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Forms of self regulation |
Media clearance NAD ( national advtg. division of BBB) |
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Pros of self regulation |
Quick Little cost involved Less damaging than FTC
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Cycle of regulation |
1. Fact of ad 2. Substantiation 3. Will reasonable consumer interpret accurately |
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Cons of self regulation |
Limited in power ( advertisers suffer little hardship, social sanctions, little publicity to consumer, voluntary) |
