The Commercial Speech Doctrine

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The Commercial Speech Doctrine

• Truthful and non-misleading advertising about
  lawful goods and services receives an
  intermediate level of First Amendment
  protectionmore 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.

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Commercial Speech Doctrine Analysis

• 1. Is it Commercial Speech?

• speech that does no more than propose a
  commercial transaction
• expression related solely to the economic
  interests of the speaker and its audience

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.
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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.
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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.

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Federal Regulation of Advertising

• Key Government Agencies
• 1. FTC Federal Trade Commission

Nearly 100 years old, the FTC polices unfair
methods of business competition and protects
consumers from deceptive advertisements.
www.ftc.gov/
2. FDA Food Drug Administration
Responsible for protecting public health and
ensuring that products like cosmetics, drugs, and
food are honestly and accurately represented to
the public.
www.fda.gov/
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TOP 10 Consumer Fraud Complaints to the FTC in
2003

• 1. Identity Theft42
• 2. Internet Auctions15
• 3. Shop-at-Home/Catalog Sales9
• 4. Internet Services and Computer Complaints6
• 5. Prizes, Sweepstakes and Lotteries5
• 6. Foreign Money Offers4
• 6. Advance Fee Loans Credit Protection4
• 8. Telephone Services3
• 9. Business Opportunities and Work-at-Home
  Plans2
• 10. Magazine Buyers Clubs1
• 11. Office Supplies and Services1

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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.

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FTC Tools Remedies To Stop False Advertising

• Guides
• Voluntary Compliance
• Consent Agreements
• Litigated Orders
• Substantiation
• Corrective Advertising
• Injunctions
• Trade Regulation Rules

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Regulatory Process

• Complaint Based System
• Special Reg. of Deceptive Ads
• Testimonial
• Bait and Switch

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