Overview
of the Topic:
At first, commercial speech had no protection. However, the
Supreme Court later admitted that advertising often has certain values in its
content and purpose, therefore putting it under the First Amendment protection.
Hence, commercial speech is protected when there is a substantial state
interest in question.
In order to promote free and fair competition in interstate
commerce, the Congress established the Federal Trade Commission in 1914. In 1938,
the FTC passed the Lanham Act, which defines unfair and deceptive advertising. The
FTC is the primary agency that regulates advertising, and has the authority to
pass laws regarding the same.
Other actively involved agencies are the FCC and FDA (Food
and Drug Administration).
Because of its legal authority to test and control different
drugs and substance, the FDA also oversees the regulation of tobacco
advertising, especially to minors and minorities.
One of the newest forms of false advertising in advertising
online. That is why the Congress passed the CAN-SPAM Act (Controlling the
Assault of Non-Solicited Pornography and Marketing) in order to regulate spam
advertising. Majority of the states have anti-spam laws, making unsolicited
e-mail messages unconstitutional.
Defining
Key Terms:
Federal
Trade Commission: A federal agency established in 1914 with the
purpose to promote free and fair competition in interstate commerce.
Puffery: Advertising
that exaggerates the merits of products or services – not illegal.
Important
Cases:
CentralHudson Gas & Electric Corp. v. Public Service Commission in NY – The New
York state court reversed the appeal made by the CHG, in which they stated that
the ban on the commercial speech through electric utilities violated First and
Fourteenth Amendments.
Sorrellv. IMS Health Inc. – The court affirmed the appeal, as
internet-based dissemination cannot be eligible for content-based violations,
as the Internet regulations tend to be overbroad and vague.
Relevant
Doctrine:
Commercial
Speech Doctrine
- The government may regulate advertising that is false, misleading or deceptive
- The government may regulate advertising for unlawful goods and services
Even accurate advertising for legal good and
services may be regulated if the government demonstrates:
- A substantial state interest behind the regulation
- The regulation directly advances the states’ interest
- A reasonable fit between the state’s interest and the regulation
The Free
Flow of (Commercial) Information
- “Freedom of Speech” applies to both the speaker and the receiver of information.
- “Speech doesn’t lose its First Amendment rights because money is spent to project it, as in paid advertisement.”
- Speech that only proposes commercial transaction is not so removed from “any exposition of ideas” that it lacks all protection.
- The need to make intelligent, informed economic decisions in a free-enterprise economy drives the public interest in entirely commercial information.
- Some forms of commercial speech, including deceptive or misleading ads, may be regulated.
Lanham
Act
A plaintiff has standing to bring suit under the Lanham Act
when:
- The defendant’s actions occurred inside “the zone of interest” of the L.A., and
- The injury to the plaintiff is “proximately caused” by the defendant’s actions.
FTC
Mechanisms
Preventive measures
- Opinion letters
- Advisory opinions
- Industry guides
- Trade rules
- Voluntary compliance
Corrective measures
- Cease and desist orders
- Consent orders
- Substantiation
- Litigated orders
- Corrective advertising
- Injunctions
Current
Issues/ Controversies:
Some of the ongoing issues in the world of advertising is
false advertising, and differentiating it from puffery. Although puffery counts
on the rationality of the consumers, sometimes is hard to recognize it against
deceptive advertisements.
Commercial speech is everywhere around us, and some people
don’t have the sufficient knowledge on certain topics that are being
advertised. For instance, when it comes to advertising “scientifically proven”
aspects of a product, rarely who is able or willing to explore the truth behind
such statements. Hence, many people invest large amounts of money that feed
into some company’s budget, not getting the result.
Specifically looking at the American society and culture,
it is primarily based on consumerism, which creates such wide space for
successful false deceptive and false advertising. Nowadays especially, with the
speed of the Internet and the capabilities of constant updates online, it is
hard to track down every single deceptive ad. Moreover, this makes the job of
false advertisers easier, as it gives them more opportunities to take advantage
of fairly large number of naïve consumers.
My
Questions/ Concerns:
- Since the Internet regulation are so challenging to narrow down, how does online advertising play into that issue?
- Will online advertising ever be fully controlled without the fear of the “chilling effect”?
References:
