The two primary standards by which the Federal Trade Commission (FTC) and the courts judge the propriety of an advertisement are whether it is unfair or deceptive. Understanding these two standards is essential to managing an account or writing copy.
Unfair Advertising
Unfairness is a very broad standard, and the FTC rarely applies it due to controversy surrounding its use. You may remember that in the late 1970s, the FTC weighed advertising to children, at one point suggesting that all such advertising was inherently unfair. The FTC leaned toward the belief that children were not capable of understanding advertising or making rational purchase decisions.
Thankfully, Congress clipped the FTC’s wings before it had a chance to become a “National Nanny.” Hence, the cases are rare where the FTC exercises its jurisdiction over unfair advertising.*
Today, unfairness cases may be brought if:
- Consumer injury is substantial, e.g., involving safety or heath consideration;
- The act or practice is immoral, unethical or unscrupulous and offends established public policy, e.g., advertising suggesting consumption of alcoholic beverages by minors; and
- Consumers could not have reasonably avoided the injury, e.g., access to research or other data is withheld from or unavailable to consumers.
Deceptive Advertising
Deception, on the other hand, is a very real and active standard by which the FTC and courts judge advertising. While clearly false or misleading claims are always considered deceptive, a decision as to whether a border-line advertisement is deceptive will most often be based upon the “net impression” of the entire advertisement. Even if every statement made is literally true, an advertisement will nonetheless be considered deceptive if the overall net impression left with the consumer is misleading. Anything ambiguous will be construed against the advertiser.
It is perhaps the most important principle in advertising regulation that the net impression is controlling, regardless of whether every individual claim made is true. For example, if you claim that four out of five doctors surveyed recommend your product but fail to disclose that only a small sample of doctors was surveyed, the literal truth of the claim is irrelevant; consumers will believe that a significant number of doctors were involved, thereby leaving a misleading net impression and exposing the agency and the advertiser to a charge of deceptive advertising.
Put simply, if an individual claim in an advertisement or the net impression of the advertisement is false or misleading, the advertisement will be considered deceptive and subject to FTC or other regulatory action, unless the injury to consumers is insignificant or the consumer was not acting reasonably, i.e., could easily have realized the claim was merely puffery and not based on established fact.
*The FTC does have guidelines regarding children’s online privacy and food advertising aimed at children and adolescents.
