US False Advertising Regulations

Advertising is regulated by the authority of the Federal Trade Commission, a United States administrative agency, to forbid “unfair and misleading acts or practices in commerce.” While it makes laymen’s sense to assume that being deceptive is being unfair, falsity in practice has been treated discretely by the FTC, leaving injustice to refer only to other types. All commercial acts may be deceptive, not just advertising, but noncommercial activity such as advertising for political candidates is not subject to trial under the FTC Act. The 50 states have similar statutes, which usually are very similar to that of the FTC and in many cases copied so closely that they are known as “Little FTC Acts.” While the terms “false” and “deceptive” are fundamentally the same for most, being misleading is not the same as producing deception. What is against the law is the possible to deceive, which is interpret to occur when consumers see the advertising to be stating to them, explicitly or completely, a claim that they may not realize is false and material. The latter means that the claim, if relied on for making a purchasing decision, is likely to be harmful by adversely affecting that decision. Evidence must be obtained for what consumers saw the ad saying, and for the materiality of that, and for the true facts about the advertised item, but no evidence is required that actual deception occurred, or that reliance occurred, or that the promoter intended to deceive or knew that the claim was false.

The goal is prevention rather than punishment, reflecting the purpose of civil law in setting things right rather than that of criminal law. The usual sanction is to order the advertiser to stop its banned acts, or to include disclosure of added information that serves to keep away from the chance of deception. Corrective advertising may be mandated. But there are no fines or prison time except for the uncommon instances when an advertiser refuses to stop in spite of being ordered to do so. The definite statute defines false advertising as a “means of advertisement other than labeling, which is misleading in a material respect; and in determining whether an advertisement is misleading, there shall be taken into account no only representations made or suggested by statement, word, design, device, sound, or any combination thereof, but also the extent to which the advertisement fails to reveal facts material in the light of such representations or material with respect to penalty which may result from the use of the commodity to which the advertisement relates under the conditions prescribed in said advertisement, or under such conations as are customary or usual.”