Presentation for final paper

1. An Analysis of Current
Advertising and
Consumer Protection Law
Kaitlin Mason

2. History of Regulating Advertising
• FTC established in 1914 by Woodrow Wilson
• Originally established to be “Charged with the responsibility of
preventing or dissolving monopolies and to bring civil lawsuits
against violators” (Davis, 2018)
• First action of the FTC was Circle Cilk Case: Cilk does not equal
Silk
• Current mission is to “Prevent business practices that are
anticompetitive or deceptive or unfair to consumers,… enhance
informed consumer choice, … without unduly burdening legitimate
business activity” (Kerr, 2018, p.155)

3. Statute Law - FTC
• “The commission defines a deceptive ad as one that contains a
material misrepresentation, omission, or practice that is likely to
mislead a consumer acting reasonably under the circumstances”
(Kerr, 2018, p.156)

4. Statute Law – Lanham Act
• Protects businesses more than consumers
• If an ad misrepresents a person or company that may be held
liable in a civil action

5. Statute Law – Central Hudson
• Central Hudson v. Public Service Commission (1980)
• Four parts
• Whether the advertising that is regulated is misleading and whether it
concerns a legal product or service
• Whether the asserted governmental interest is substantial
• Whether the regulation directly advances the asserted governmental
interest
• Whether the regulation is “not more extensive than necessary” to serve the
governmental interest (Kerr, 2018, p.151)

6. Recent Case Law – First Amendment/Central
Hudson
• 44 Liquormart v. Rhode Island (1996) – Involving the Central
Hudson test
• Lorillard Tobacco v. Reilly (2001) – Involving the Central Hudson
Test
• Both cases involving regulations that infringed on First Amendment
rights
• Thompson v. Western Medical Center (2002) – Involving the First
Amendment – Act was too broad

7. Recent Case Law – Consumer Protection
• SnapChat (2014) – Deceptive advertising that lead consumers to
believe their messages disappeared when in actuality they could
be save
• “Revenge” Website (2015) – Deceptively advertising to get nude
photos of women using a revenge porn site
• POM Wonderful LLC v. Coca Cola Company (2014) – Coca Cola
produced a drink claiming to be flavored “pomegranate
blueberry” ingredients showed almost no pomegranate or
blueberry

8. Law Review – Ward (2015)
• Using POM Wonderful LLC v. The Coca Cola Company (2014)
• First case to involve the Lanham Act in a FDCA case
• Changed the way First Amendment and advertising regulation
connect
• Gives advertisers an opportunity to leave out certain information
that can be seen as misleading – “may contain nuts”

9. Law Review – Fujawa (2012)
• Discusses embedded advertising – sponsored brands in
entertainment media
• Several acts in place to deal with the disclosure of sponsorship but
they are limited in their scope

10. Law Review – Einstein (2015)
• Discusses native advertising – ads seamlessly integrated into a
website that mimics the content of the website
• FTC is focused on regulating advertising online but falls short
• FTC has not created a definition for native advertising and has not
updated any disclosure guidelines

11. Conclusion
• With so many advertisements it can be hard to determine what is
false, misleading, and harmful
• FTC is tasked with protecting consumers without infringing on the
advertisers First Amendment rights
• Research limitation in new forms of advertising and the amount of
advertisements out there
• Future research should focus on online advertisements and the
way social media is changing the world of advertising