Mass Media Law CH 15

FTC

______ is a powerful, strong, and influential agency. -1200 employees -12 different locations across nation -budget is $300 million -jurisdiction is not particularly limited -5 commissioners, appointed by the President, including the chair man -all serve 7 terms -no more than 3 commissioners can be from the same political party

Bigelow v. Virginia; 1974

____________________ in _______ - made it a misdemeanor for a publication for advertising for an abortion (a weekly magazine gave a doctor's name to schedule an abortion -the court held it went against First Amendment -Also court said this case was "in the public interest"

*National Advertising Review Board (NARB)*

If an advertiser disagrees with a NAD or CARU decision, it can appeal to the _______________________________.

state substantial interest

Nevada allowing prostitution in some counties, Airline tickets having to prominently show total price, and Baltimore ordinance banning alcohol ads near children's facilities are all about ________________________.

Marketplace of Ideas Theory

The _____________________________ is why commercial speech gets First Amendment protection (in chapter 2)

*puffery*

*2. The act or practice must be considered from the perspective of a consumer who is acting reasonably.* The test is whether the consumer's interpretation or reaction is reasonable. When advertisements or sales practices are targeted to a specific audience, such as those aimed at children or people who are elderly or terminally ill, they will be viewed from the perspective of a reasonable member of that group. Also, advertising aimed at a special vocational group, such as physicians, will be evaluated from the perspective of a reasonable member of that group. A well-educated physician might be better able to understand a complicated pharmaceutical ad than the average individual can. The advertiser is not responsible for every interpretation or behavior by a consumer. The law is not designed to protect the foolish or the "feeble minded," the commission has noted. When an advertisement conveys more than one meaning to a reasonable consumer, one of which is false, the seller is liable for the misleading interpretation. The commission evaluates the entire advertisement when examining it for misrepresentation. *Accurate information in the text may not remedy a false headline.* Similarly, an advertiser cannot correct a misrepresentation in an advertisement with point-of-sale information. *Qualifying disclosures must be legible and understandable, the FTC has ruled.* "The commission generally will not bring advertising cases based on subjective claims (taste, feel, appearance, smell)," according to the guidelines. The agency believes the typical reasonable consumer does not take such claims seriously and thus they are unlikely to be deceptive. Such claims are referred to as _________________ and include representations that a store sells "the most fashionable shoes in town" or a cola drink is "the most refreshing drink around." Finally, the commission has stated that when consumers can easily evaluate the product or service, when it is inexpensive, and when it is frequently purchased, the commission scrutinizes the advertisement or representation in a less critical manner.

Federal Trade Commission (FTC)

A variety of federal agencies are empowered to enforce consumer protection laws. The ___________________________________ is the primary agent of the government, but clearly not the only agent. Beginning in the 1990s the Food and Drug Administration (FDA) began an aggressive campaign against a variety of companies to force them to change their labeling and promotional practices. For instance, in 2010 the FDA issued a warning letter to Dreyers Grand Ice Cream regarding the labeling off its Nestle Drumstick Classic Vanilla Fudge Product. While the front panel of the box showed it contained no trans fat, it failed to include a disclosure statement to alert consumers that the product nonetheless has significant levels of both saturated fat and total fat, thus violating the federal Food, Drug, and Cosmetica Act. Several other companies received similar letters in 2010 from the FDA regarding front-panel "no trans fat" claims that failed to disclose significant levels of saturated fat and total fat. The companies that received the warning letters had 15 working days to inform the FDA of the steps that they were or would be taking to correct their labels.

government

Advertising, as a form of expression subject to legal regulation and potential First Amendment protection, is the dominant cultural icon of our time. it is also a huge businesses. In 2014, a 30-second television commercial on the Super Bowl cost a record $4.5 million. In 2012 approximately $166 billion was spent on advertising across all types of media in the U.S., according to a company called eMarketer. The amount was estimated to grow to about $189 billion by 2016. In just one 3-month period of 2012, Nielson estimated that automakers alone spent $2.7 billion on advertising in the U.S. Ad dollars make possible most of the media content that we consume; were it not for ads, network television and daily newspapers would not exist. Advertising is, then, a very important form of speech. Advertising messages are regulated by the _________________; in fact, advertising is probably the most heavily regulated form of modern speech and press. Laws at every level-federal, state and local-control what businesses and institutions may claim about their products and services. Thousands of laws regulate advertising.

political speech

Although truthful advertising for lawful goods or services receives some First Amendment protection, the extent and scope of that protection is more limited when compared with ___________________. While political speech is at the top of a First Amendment hierarchy of expression and while speech that fits the Supreme court's definition of obscenity falls completely without any First Amendment protection, commercial speech lies somewhere in between.

commercial speech

Another word for advertisement is _____________________.

*consent order or decree*

Consent Agreement: The most commonly used FTC remedy is the consent agreement, or _____________________________. This is a written agreement between the commission and the advertiser in which the advertiser agrees to refrain from making specific reduct claims in future advertising. The advertiser admits no wrongdoing by signing such an order, so there is no liability involved. The consent agreement is merely a promise not to do something in the future. Sometimes the misleading statements are minor errors, but other timed they represent a major attempt at deception. *Considerable pressure is placed on the advertiser to agree to a consent order.* Refusing to sign the agreement will result in litigation and publicity. The publicity can do more harm to the advertiser than a monetary fine. Also, the time factor works in the advertiser's favor. Typically the advertising campaign is already over. What happens to an advertiser who signs a consent decree, then violates the provisions of the decree? When the FTC issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000. When the FTC recovers money against a company for false or misleading advertisements, who gets to keep it? The good news for consumers is that they sometimes get part of their money back. Ex: In 2010 the FTC mailed claim forms to more than 1,000 music fans because those fans allegedly were steered from Ticektmaster's Web site to its ticket resale Web site, TicketsNow, while buying tickets to attend Bruce Springsteen concerts the previous year. Ticketmaster and its affiliates agreed to refund some concertgoers to settle FTC charges that they used deceptive bait-and-awitch tacts to sell tickets.

no

False or misleading advertising, as well as advertising about unlawful goods and services receives _______ First Amendment protection.

not Bigelow v. Virginia *commercial speech doctrine* Central Hudson Gas & Electric Corp v. Public Service Commission

For a long time, advertising was ______ protected by the First Amendment. It was not until 1975 that the U.S. Supreme Court first explicitly held that "commercial advertising enjoys a degree of First Amendment protection," reasoning at the time in __________________ that "the relationship of speech to the marketplace of products or of services does not make it valueless in the marketplace of ideas." Yet the court also was clear in Bigelow that advertising is "subject to reasonable regulation." Since then, courts have developed a ________________________ articulating just how much First Amendment protection advertising receives and the criteria the government must satisfy to permissibly regulate it. The doctrine evolved in a series of cases in the 5 years after Bigelow.: -In 1976 the Supreme Court ruled that a Virgiinia statute that forbade the advertising of the price of prescription drugs violated the First Amendment. -In 1977 the high court invalidated a township ordinance in New Jersey that banned the placement of "for sale" and "sold" signs on front lawns. Township authorities said the law was needed because such signs contributed to panic selling by white homeowners who feared that property values would decline because the township was becoming populated by black families. The Supreme Court rejected this argument and ruled that the placement of such signs was protected by the First Amendment. -In the 1980 case of ____________________________- known today simply as "Central Hudson"-the Supreme Court held unconstitutional a New York regulation that completely banned promotional ads by electric utility companies. -they didn't want citizens to use so much electricity -court said this was overreaching and this commercial speech is protected

rejected rejected

Newspapers, magazines, broadcasting stations, online service providers and other mass media all have rules that more or less regulate the kind of advertising they will carry. These guidelines spring from a variety of concerns. Sometimes the owner of the medium thinks the product that is being advertised is offensive, like NC-17 or adult movies, or condoms. Other times the ads themselves might be regarded as tasteless, like an advertisement for clothing in which then models are scantily dressed or posed erotically. It is not uncommon that an advertisement is ___________ because of economic interests. A television station won't advertise a sporting event that will be telecast on a competing channel. Ads that promote illegal goods and services, that contain claims that appear to be deceptive or are not substantiated, or that unfairly trash a competitor's products might also be ___________. *Remember, a mass medium is permitted to reject any content it chooses, with or without a reason.*

Internet

One of the most pervasive and annoying forms of advertising today is on the ________________. Almost everyone who uses electronic mail has received unsolicited commercial advertising known as "spam." Spam frequently takes the form of sexually explicit advertisements that may be both unwarranted by, and offensive to, its recipients. On the other hand, to the extent that spam pertains to a lawful product and is neither false nor deceptive, it constitutes commercial speech protected by the First Amendment. Spam also represents an economically efficient and inexpensive way of marketing one's product or service.

*bait-and-switch advertising*

The FTC prohibits ___________________________, which it defines as "an alluring but insincere offer to sell a product to service which the advertiser in truth does not intend or want to sell. Its purpose is to switch consumers from buying the advertised merchandise, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser." The FTC 's rules state, among other things, the following: -No ad containing an offer to sell a product should be published if the offer is not a bona fide effort to see that product. -Advertisers cannot engage in practices that discourage purchase of advertised merchandise as part of a bait scheme to sell other merchandise, such as refusing to show or sell the product offered in accordance with the terms of the offer. In 2010, the FTC went after a high-tech form of bait-and-switch advertising when it settled charges that Ticketmaster and its affiliates used deceptive bait-and-switch tactics to sell concert tickets to consumers. The FTC alleged that when tickers went on sale February 2, 2009, for Bruce Springsteen concerts in May and June that year, Ticketmaster displayed a "No Tickets Found" message on its Web page to consumers to indicate that no tickets were available at that moment to fulfill their request. The FTC charged that Ticketmaster used this Web page to steer unknowing consumers to TicketsNow, where tickets were offered at much higher prices-in some cases double, triple or quadruple the face value. To settle the issue, Ticketmaster agreed to pay refunds to consumers who bought tickets for 14 Bruce Springsteen concerts through its ticker resale Web site TicketsNow, and to be clear about the costs and risks of buying through its reseller sites.

*National Advertising Division (NAD)* *Child Advertising Review Unit (CARU)*

There are 2 key divisions of the Better Business Bureau's Advertising Self-Regulatory Council (ASRC), which was known until April 2012 as the National Advertising Review Council, that provide both advice to advertisers and out-of-court methods for resolving disputes about advertisements. They are: _______________________ (_____): This organization, a self-regulatory forum for the advertising industry, reviews national advertising for truthfulness and accuracy, and it provides a form of alternative dispute resolution for companies that is cheaper than litigation. For instance, in 2012 NAD determined that Gillette's use of the term "MoistureRich" in the name of its "Gillette Venus ProSkin MoistureRich" women's razor conveyed the misleading message that the razor moisturizes the skin while one shaves. NAD recommended that Gillette stop using "MoistureRich" in both the product name and as a descriptor when used in isolation in phrases such as "Treat Your Skin to MoistureRich." The challenge wad filed with NAD by a competitor of Gillette, namely Schick, which makes "Intuition Plus" razors. _____________________________ (______): This agency describes itself as the children's arm of the advertising industry's self-regulation program, and it evaluates child-directed advertising and promotional material in all media to advance truthfulness, accuracy and consistency with its "Self-Regulatory Guidelines for Children's Advertising" and relevant laws. For instance, in 2012 CARU recommended that the maker of Bratz Party Dolls alter packaging that featured the text "now with 100s of poses" and included photos of 3 dolls posed without assistance in various stances. One Bratz doll, for example, was shown standing on one leg with her right knee bent at about a 30-degree angle and arms outstretched. CARU determined the packaging might mislead children into believing that they could make the dolls duplicate the poses featured on the packaging when, in fact, they could not do so.

CAN-SPAM Act 1. *False/Misleading Messages* 2. *Functioning Return Address and Opt-Out Mechanism* 3. *10-Day Prohibition Period* 4. *Disclosure Requirements* 5. *Aggravated Violations*

To address the negative aspects of spam, Congress passed and President George W. Bush signed into law in 2003 the __________________. The act's title represents a tortured acronym for a bill officially called the "Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003." It applies to "commercial electronic mail messages" that have as their "primary purpose" the "commercial advertisement or promotion of a commercial product or service." In an article on the CAN-SPAM Act, attorneys Glenn B. Manishin and Stephanie A. Joyce identify 5 specific components of the law: 1. _______________________: Commercial e-mail messages that include "materially false or misleading" header information or deceptive subject lines are prohibited. 2. ______________________________________: All commercial e-mail messages must contain either a functioning return address or an Internet-based reply "opt-out" mechanism for at least 30 days after transmission of a message. 3. _________________________: Spam senders are barred from transmitting commercial e-mail messages to any recipient after 10 business days following the exercise by the recipient of his or her right to opt out of future commercial e-mail messages. 4. ________________________________: All commercial e-mail messages must disclose 3 specific items of content: (a) a clear and conspicuous identification of the message as an "advertisement or solicitation," (b) a notice of "opt-out" mechanism, and (c) a "valid physical postal address." All commercial e-mail "that includes sexually oriented material" must also include a warning label on the subject line. To implement this provision, the FTC in 2004 adopted a rule requiring spammers who send sexually oriented material to include the warning "SEXUALLY-EXPLICIT:" in the e-mail subject line or face fines for violations of federal law. In addition, the matter in the spam e-mail message that is initially viewable when it is opened cannot include any sexually oriented material. (you have to scroll down to be able to see it) 5. _________________________: The act proscribes as "aggravated violations," warranting additional civil and commercial penalties, (a) e-mail "harvesting" or the knowing use of harvested addresses, (b) the automated creation of multiple e-mail accounts used for commercial e-mail, and (c) the use of unauthorized relays for commercial e-mail messages.

$16,000

Uder the terms of the CAN-SPAM Act, each separate e-mail in violation of the law is subject to penalties of up to $________________, and more than one person may be held responsible for violations. That obviously can add up very fast.

*Lanham*

Under the ________ Act, a plaintiff can prove an ad is literally false if the test used to prove a claim for a product either is: 1) not sufficiently reliable to permit a conclusion; or 2) simply irrelevant. Importantly, under the doctrine of "falsity by necessary implication," a company's claims about particular aspects of its product may necessarily imply more sweeping claims about that product, and these implied claims also may be literally false within the meaning of the Lanham Act. In other words, the creators of ads should be wary of creating false implications.