Sunday, August 28, 2005
HD RADIO-FALSE OR DECEPTIVE ADVERTISING?
Basics In False Advertising
The FTC Act states that false advertising is a form of unfair and deceptive commerce. The term "false advertising" has been broadly construed. As you might expect, the term includes advertisements that are in fact untrue. However, the term false advertising extends well beyond untrue advertisements. It also includes advertisements that make representations that the advertiser has no reasonable basis to believe, even if the representations turn out to be true. An example would be an advertisement for a photocopier machine which stated that the machine used less toner than any comparable machine. The advertiser would have committed false advertising if it had no reasonable basis to believe the truth of this claim (such as through comparative tests), even if it turned out to be true.
The FTC Act gives the FTC broad authority to regulate advertising. Under this broad mandate, the FTC has issued regulations barring advertisements that could be misleading even if they are true. A famous example involves Anacin, a brand of aspirin. The maker of Anacin ran ads claiming that clinical tests showed that Anacin delivered the same headache relief as the leading pain relief prescription. The ad did not mention that aspirin itself is the leading pain medicine. The FTC determined that the ad was misleading. The ad implied that Anacin was more effective than aspirin, when in fact, Anacin is really just aspirin.
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Actual loss is not required to show an injury. All that is needed is a reasonable basis for the belief that the plaintiff is likely to be damaged as a result of the advertising. An example of such damage would include ads that deceive consumers who are the target population of both the advertiser and the plaintiff. The penalties for a Lanham Act violation include the plaintiff's lost profits, the additional profits to the advertiser resulting from the deceptive ad, treble damages, and attorneys' fees.
Here is the link to the full article: