Transcript Commercial Speech

Commercial Speech
What is commercial speech?
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Commercial Speech is an expression, economic
in nature, by a person or business entity
persuading the audience to take certain action
(e.g., purchase a product) with the intent of
making profit.
“speech that does no more than propose a
commercial transaction”
“expression related solely to the economic
interests of the speaker and its audience”
Means of regulations
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Place (ads in certain places, media type, etc.)
Type of advertisement (tobacco products, law
firms, etc.)
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Content (indecent, false, etc.)
Historical development
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Before 1976, courts classified commercial speech
as speech unprotected by the First Amendment.
Unprotected does not mean prohibited.
It means that before 1976 government had to use a
simple rational justification for its regulations
(such justifications are very difficult to challenge).
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However, such regulations were not common.
Historical development: 1976
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Virginia State Board of Pharmacy v. Virginia
Citizens Consumer Council (1976): the Supreme
Court ruled that commercial speech is generally
protected by the First Amendment.
“Advertising, however tasteless and excessive it
sometimes may seen, is nonetheless dissemination
of information as to who is producing and selling
product for what reason, and at what price.”
Historical development: 1980
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In Central Hudson Gas & Electric v.
Public Service Commission of New York
(1980), the Supreme Court developed a
test for reviewing commercial speech
regulations
Central Hudson’s Test (Four-Point)
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1. Is the commercial message either misleading
or related to illegal activity?
2. Does the government assert a substantial
interest to be achieved by the restriction on
speech?
3. Does the restriction directly advance this
interest?
4. Is the restriction no more extensive than
necessary?
In other words: The Commercial
Speech Doctrine States That
• False or misleading advertising, as well as
advertising about unlawful goods and
services, receives no First Amendment
protection.
In other words: The Commercial
Speech Doctrine States That
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Truthful and non-misleading advertising
about lawful goods and services receives an
intermediate level of First Amendment
protection—
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more 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.
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Commercial Speech Doctrine Analysis
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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.
Commercial Speech Doctrine Analysis
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If the commercial speech is true, nonmisleading, 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:
Commercial Speech Doctrine Analysis
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the government must prove that:
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.
Federal Regulation of Advertising
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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/
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/
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.
False and deceptive advertising
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Perpetual "sales"
Psychological pricing
Advertising the maximum
Bait and switch. Offering a product at a low
price with no intention to sell it
"Going out of business" sales: a message of
urgency and "dumped" prices
Scare tactics
False and deceptive advertising
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Units of sale and pricing
Memberships. Problems in comparing prices of
items sold in regular packages and bulk packages.
Fillers and oversized packaging
Hidden fees and surcharges
False and deceptive advertising
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Meaningless Awards: e.g., Best in class
Meaningless terms: deluxe, advanced, hi-tech,
heavy duty, super, ultra.
Undefined terms: organic, light, low-tar, mild,
natural,
A Knight's Tale controversy
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Newsweek revealed in June 2001 that print ad for a
movie A Knight's Tale, contained glowing
comments from a film reviewer who did not exist.
Top Consumer Fraud Complaints
to the FTC in 2006
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Over 670,000 complaints filed
Identity theft complaints represented 36 percent
Shop-at-Home/Catalog Sales 7 percent
Prizes/Sweepstakes and Lotteries 7 percent
Internet Services and Computer 6 percent
Internet Auctions 5 percent
Foreign Money Offers 3 percent
Advance-Fee Loans and Credit Protection - 2 percent
Top Consumer Fraud Complaints
to the FTC in 2012
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more than 2 million complaints overall
Identity Theft
369,132
18 percent
Debt collection
199,721
10 percent
Banks and Lenders 132,340
6 percent
Shop-at-Home and Catalog Sales 6 percent
Prizes, Sweepstakes and Lotteries 5 percent
Impostor Scams
4 percent
Internet Services
4 percent
Auto-Related Complaints
4 percent
FTC Tools & Remedies
To Stop False Advertising
Guides
• Voluntary Compliance
• Consent Agreements
• Litigated Orders
• Substantiation
• Corrective Advertising
• Injunctions
• Trade Regulation Rules
Lanham Act: Section 43(a)
The federal trademark protection law
The section of the Act allows for federal civil
lawsuits based upon both false advertising
and false endorsements.
Quack Watch
http://www.quackwatch.org/
Operated by Stephen Barrett, M.D.
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Your Guide to Quackery, Health Fraud,
and Intelligent Decisions
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For example: 25 Ways to Spot Quacks and Vitamin
Pushers.
http://www.quackwatch.org/01QuackeryRelatedTopics/spotquack.html