The Commercial Speech Doctrine

Truthful and non-misleading advertising about lawful goods and services receives an intermediate level of First Amendment protection—more protection than speech such as obscenity, which is not protected by the First Amendment, but less protection than political speech, which often is said to be at the core of the First Amendment.

• False or misleading advertising, as well as advertising about unlawful goods and services, receives no First Amendment protection.

Commercial Speech Doctrine Analysis

1. Is it Commercial Speech?

2. If it is commercial speech, then is the speech false or misleading, or does it pertain to an unlawful product or service? If so, then it receives no First Amendment protection and the analysis ends.

•“speech that does no more than propose a commercial transaction”

• “expression related solely to the economic interests of the speaker and its audience”

Commercial Speech Doctrine Analysis, Continued

3. If the commercial speech is true, non-misleading, and pertains to a lawful product or service, then it receives First Amendment protection. It may, however, still be regulated and restricted if the government can prove three things:

• there is a substantial government interest that justifies the regulation;• there is some evidence the regulation directly advances the substantial interest; and• there is a reasonable fit between the state interest and the government regulation.

Lawsuits By Competitors

Lanham Act: Section 43(a) allows for federal civil lawsuits based upon both false advertising and false endorsements.

The key provisions are set forth at:

15 U.S.C. § 1125.

Federal Regulation of Advertising

Key Government Agencies:1. FTC – Federal Trade Commission

2. FDA – Food & Drug AdministrationResponsible for protecting public health and ensuring that products like cosmetics, drugs, and food are honestly and accurately represented to the public.

www.fda.gov/

Nearly 100 years old, the FTC polices unfair methods of business competition and protects consumers from deceptive advertisements.

www.ftc.gov/

TOP 10 Consumer Fraud Complaints to the FTC in 2003

1. Identity Theft—42% 2. Internet Auctions—15%3. Shop-at-Home/Catalog Sales—9%4. Internet Services and Computer Complaints—

6%5. Prizes, Sweepstakes and Lotteries—5%6. Foreign Money Offers—4%6. Advance Fee Loans & Credit Protection—4%8. Telephone Services—3%9. Business Opportunities and Work-at-Home Plans

—2%10. Magazine Buyers Clubs—1%11. Office Supplies and Services—1%

FTC Definition of False or Deceptive Advertising

1. There must be a representation, omission or practice that is likely to mislead or to confuse the consumer.

2. The act or practice must be considered from the perspective of a “reasonable consumer.”

3. The representation, omission, or practice must be “material” such that it is likely to influence the purchasing decision.

FTC Tools & Remedies To Stop False Advertising

• Guides

• Voluntary Compliance

• Consent Agreements

• Litigated Orders

• Substantiation

• Corrective Advertising

• Injunctions

• Trade Regulation Rules

Regulatory Process

Complaint Based System Special Reg. of Deceptive Ads

– Testimonial– Bait and Switch