Introduction About The Federal Trade Commission

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The Federal Trade Commission (FTC) regulates "unfair methods of competition" (Section 5 of the Federal Trade Commission Act), "unfair or deceptive acts or practices" (Section 5), and "false advertising" (Section 12). The FTC's Bureau of Consumer Protection has issued a handful of guides to aid advertisers and the public in determining how certain types of products should be advertised Breitling Replica(http://www.kopeez.com/B-Replica-Breitling-Watches-19.html) and what techniques may be used. One guide discusses use of testimonials, for example. These guides are advisory, as are the FTC's opinions about the applicability of federal laws to specific cases.

The Trade Regulation Rules issued by the Bureau of Consumer Protection are, by contrast, legally binding. These rules govern what is and is not considered an illegal practice. The Advertising Evaluation Section of the Bureau of Consumer Protection was set up in 1973 to oversee advertising and to review the substantiation of advertising claims. The staff of the Advertising Evaluation Section draws samples of televised and print ads for evaluation and also reviews complaints ...
... filed by the public.

When the FTC concludes that a complaint is worth pursuing, staffing members' deter-mine whether, in their judgment, the ad has violated the law. If they find it has, they may seek voluntary assurance that the practice will be discontinued. Such an agreement is not legally binding, but if it is violated, the FTC may reopen the case against the advertiser. When the case is serious or the advertiser stubborn, the FTC institutes formal proceedings. To halt these proceedings, the advertiser may sign a consent order stipulating the facts in the case, the findings of the commission, and the conditions accepted by the advertiser, and indicating that the practice will not be repeated. This order is legally binding.

If, instead, the advertiser wishes to contest the findings, a hearing is held before an administrative law judge, who may dismiss all or some of the charges, issue a legally binding cease-and-desist order, or order corrective advertising. Either the FTC staff or the advertiser may appeal this decision to the five FTC commissioners. An advertiser who loses at this level may appeal to the federal court of appeals and, losing there, may appeal to the U.S. Supreme Court.

The appeal process may go on for years, during which the contested advertising practice may continue. For example, in 1965 the FTC told the producers of Geritol to eliminate the claim that the product combated "tired blood." Being tired is not a reliable indicator of iron deficiency. Nonetheless, Geritol reintroduced the claim in subsequent ads. The FTC sued and finally won in 1976. Geritol's maker, which had since switched advertising strategies, was fined $125,000 for noncompliance.

The use of corrective advertising to counter false impressions is a relatively new phenomenon. In 1971, the FTC demanded that the producers of Profile Bread devote one-quarter of one year's media budget to countering the impression that eating their product would produce weight loss. The Breitling Bentley Replica(http://www.fashion-replica.com/GoodsSeries/Breitling_for_Bentley-91.html) corrective ad asked, in part, "Does Profile have fewer calories than other breads? No. Profile has about the same calories per ounce as other breads. To be exact, Profile has seven fewer calories per slice. That's because it's sliced thinner. But eating Profile will not cause you to lose weight."1 Similarly, the producers of Domino Sugar were required to spend one-quarter of a year's budget to correct the impression that their sugar was a better source of energy than other brands were.

In the first court test of the FTC's right to require corrective advertising, the Supreme Court in 1977 let stand the order by the U.S. Court of Appeals for the Second Circuit that the makers of Listerine mouthwash state in their next $10 million worth of advertising that "Listerine will not help prevent colds or sore throats or lessen their severity."

A consent agreement was the basis for the March 3, 1999, resolution of the charge that Winston cigarettes had deceptively been advertised as a brand that contained "no additives." R. J. Reynolds, which produces Winston cigarettes, had, according to the FTC, "represented that because they contain no additives, Winston cigarettes are less hazardous than otherwise comparable cigarettes that contain additives. The complaint alleges that Reynolds did not have a reasonable basis for the representations at the time they were made. Among other reasons, the agency alleged, the smoke from Winston cigarettes, like the smoke from all cigarettes, contains numerous carcinogens and toxins."