Chapter 15/16 Quiz

Name two FCC remedies against broadcasters for content violations.

1) Issue a warning notice. 2) Impose a monetary fine. 3) Place conditions on renewal of a broadcast license. 4) Revoke a broadcaster's license entirely (very rarely used). (pg. 651)

Name two requirements an applicant must meet to acquire a broadcast license?

1) The applicant must be a citizen of the United States. 2) The applicant must have sufficient funds to build and operate the station for at least three months w/o earning advertising revenue. 3) The applicant must either possess or be able to hire people who possess the technical qualifications to operate a broadcasting station. 4) The applicant must be honest and open in dealing with the commission and must have good character.

What are three requirements the government must satisfy to regulate truthful advertising for legal goods and services?

1) The government must assert a substantial state interest to justify the regulation. 2) The government must demonstrate that the ban on advertising it has instituted will directly advance the interest outlined before. 3) The state must show that there is a "reasonable fit" between the state interest being asserted and the government regulation. (pg. 588)

How does the FTC define false or deceptive advertising?

1) There must be a representation, omission or practice that is likely to mislead the consumer. 2) The act of practice must be considered from the perspective of a consumer who is acting reasonably. 3) The representation, omission or practice must be material. (pg. 610)

What is the Printer's Ink statute?

A model drafted in 1911 to control false or misleading advertising. Most states adopted some version of this model in the early 20th century. Such laws are largely ineffective because they are not normally enforced. (Glossary).

What term is defined as "an alluring but insincere offer to sell a product or service which the advertiser in truth does not intent or want to sell"?

Bait-and-switch advertising, which the FTC prohibits. (pg. 627)

Which Act signed by President George W. Bush applies to "commercial electronic mail messages" that have as their "primary purpose" the "commercial advertisement or promotion of a commercial product or service."?

Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM Act) of 2003. (pg. 606)

What is the term for when the FTC forces the advertiser to inform the public that in the past it has not been honest or has been misleading?

Corrective Advertising. (pg. 619)

True or False: A singly entity may own any number of television stations on a nationwide basis as long as the station group collectively reaches no more than 50% of the total national TV viewing audience?

False, 39%. (pg. 646)

True or False: The FTC only has the power to act against all unfair and deceptive acts or practices in commerce as long as they affect competition.

False, In 1938 Congress adopted the Wheeler-Lea Amendment to the Trade Commission Act, which gave the FTC the power to proceed against all unfair and deceptive acts or practices in commerce regardless of whether they affect competition. (pg. 601)

True or False: The CAN-SPAM Act provides private legal cause of action or remedy to spam recipients.

False, The CAN-SPAM Act does not provide private legal cause of action but instead the FTC enforces the law, with help from the Justice Department and the FBI. (pg. 606)

True or False: A broadcasting license never has to be renewed.

False, a broadcasting license must be renewed every eight years, but it is not likely that the license will not be renewed unless the licensee has committed serious violations of the Communications Act. (pg. 648)

True or False: COPPA exists to protect the privacy of adults online.

False, the Children's Online Privacy Protection Act (COPPA) exists to protect the privacy of children online. (pg. 614)

True or False: The FCC has the power to censor broadcasters.

False, the FCC lacks the power to censor broadcasters: "Nothing in this act shall be understood or construed to give the commission the power of censorship over radio communications..." (pg. 644)

True or False: The Radio Act of 1917 required that all radio transmitters be licensed by the federal government and that radio operators be licensed by the government as well.

False, this is the Radio Act of 1912. (pg. 634)

What is the Lanham Act?

It was created by Congress to stop unfair competition in the marketplace. The test of false advertising has three parts: 1) What message, either explicitly or implicitly, does the ad convey? 2) Is this message false or misleading? 3) Does this message injure the plaintiff? (pg. 598)

What is the significance of McNeil-PPC, Inc. v. Pfizer, Inc.?

Pfizer created a campaign for Listerine mouthwash that said studies show mouthwash is just as effective as dental floss, implying that consumers no longer need to purchase floss and can replace it with mouthwash. Johnson & Johnson sued, claiming that the ad was false and misleading, and was an unfair threat to sales of dental floss. Pfizer was ordered to stop its campaign. (pg. 595)

What did the Supreme Court rule in FRC v. Nelson Brothers?

That state lines do not divide radio waves and that national regulation of broadcasting was not only appropriate but also essential to the efficient use of radio facilities. (pg. 642)

What is the commercial speech doctrine?

The First Amendment does not protect either false or misleading ads or ads for unlawful goods or services. Government may regulate truthful advertising for legal goods and services if the following conditions are met: 1) There is a substantial state interest to justify the regulation 2) There is evidence that the regulation directly advances this interest. 3) There is a reasonable fit between the state interest and the government regulation. (pg. 586)

What happened in Rubin v. Coors Brewing Co.?

The Supreme Court struck down a federal rule that forbade brewers from listing the alcohol content on labels attached to bottles and cans of beer and malt liquor. (pg. 591)

What is the most commonly used FTC remedy for when they find an advertisement's claim to be deceptive?

The consent agreement, or consent order, which is a written agreement between the commission and the advertiser in which the advertiser agrees to refrain from making specific product claims in future advertising. (pg. 617)

What was the Federal Trade Commission created for in 1914?

To police unfair methods of business competition. It enforces the laws that prohibit business practices that are anticompetitive, deceptive or unfair to consumers. It also educates consumers and businesses to encourage informed consumer choices, compliance with the law and public understanding of the competitive process. (pg. 600-601)

True of False: The Federal Communications Act of 1934 remains as a base for all telecommunications regulation today.

True, it expanded the earlier statute to include telephones and the telegraph as well as radio, and provided for the FCC to regulate these telecommunications media. (pg. 635)

True or False: The Food and Drug Administration is the primary agent of the government that enforces consumer protection laws.

True. (pg. 600)

Which Act empowers the FDA to regulate the language of the labels on a food product?

the Food, Drug and Cosmetic Act (FDCA). (pg. 600)