A brief overview of FTC and advertising guidelines

1. Sarah Elfering
JMC 4410
FEDERAL TRADE
COMMISSION &
DECEPTIVE
ADVERTISING

2.  Federal Trade Commission was established in 1914 when
President Woodrow Wilson signed the Federal Trade
Commission Act
 Mission is “working to protect consumers by preventing
anticompetitive, deceptive, and unfair business practices,
enhancing informed consumer choice and public
understanding of competitive process, and accomplishing this
without duly burdening legitimate business activity
A BRIEF HISTORY

3.  FTC was built off Federal Trade Commission Act
 “Prevent unfair methods of competition and unfair or deceptive acts
or practices in or affecting commerce and prescribes rules in defining
with specificity acts or practices that are unfair or deceptive, and
establishing requirements designed to prevent such acts or
practices”
 Lumosity was fined millions for saying their games could help
prevent brain related health problems
 FTC issued a general warning that they are paying close
attention to companies that make claims about health related
benefits
STATUTE LAW

4.  FTC vs. Coorga Nutraceuticals Corp (2016)
 Had to pay damages for not having scientific evidence to back up the
Gray Defense Dietary Supplements. These supplements where
supposed to reverse or prevent gray hair
 JC Penny, Bed Bath and Beyond, Nordstrom, Backcountry.com
(2015)
 Each company had to pay fines for labeling textiles made of
bamboo when they were made of rayon
 Lord & Taylor (2016)
 Paid Nylon Magazine and 50 Instagram users to write reviews for
specific clothing items and didn’t require the participants to disclose
they were receiving compensation
RECENT CASES

5.  It is important to make sure that the company has the proper
research done about a product
 It is important to make sure that influencers have the proper
disclosure and let followers know if they are receiving
compensation or products for free.
 Nordstrom Rack gave social media influencers $50 gift cards
inexchange for them tweeting about store opening. There was no
disclosure
ANALYSIS OF CASES

6.  FTC monitors companies to make sure that their advertising is
not deceptive
 It is important for companies to have the proper research for
their products
 With social media on the rise it is important for influencers to
have disclosures if they are receiving compensation of some
type.
CONCLUSION