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Regulation of Advertising

The law governing television advertising is more settled than that of obscene, indecent, or profane materials. The First Amendment permits governmental regulation of television advertising and other forms of commercial speech so long as the government’s interest in doing so is substantial, the regulations directly advance the government’s asserted interest, and the regulations are no more extensive than necessary to serve that interest. This test affords advertisers more First Amendment protection than does the public-interest test under which federal courts review most FCC content-related regulations. In a free enterprise system the law recognizes that consumers depend on unfettered access to accurate and timely information regarding the quality, quantity, and price of various goods and services.

Conversely, society is not served by false, deceptive, or harmful advertisements, and thus regulations aimed at curbing such advertising are typically found to serve a substantial governmental interest. The best example involves the federal ban on cigarette advertising. In 1967 the FCC acted upon citizen complaints against the misleading nature of tobacco advertisements by implementing a rule that required any television station carrying cigarette advertisements to also air public service announcements addressing the health risks posed by tobacco. The rule withstood a court challenge. In addition, two years later Congress passed the Public Health and Cigarette Smoking Act of 1969, which banned all electronic advertising of cigarettes as inherently misleading and harmful. The act took effect in 1971 and survived a court challenge that same year. The law remains in effect today. No federal laws or FCC rules ban alcohol advertising, however.

Unlike other areas of telecommunications law, Congress has allowed states to adopt their own regulations governing false and deceptive advertising. Many states have responded by adopting the Uniform Deceptive Trade Practices Act (UDTPA), which prohibits three specific types of representations: (1) false representations that goods or services have certain characteristics, ingredients, uses, benefits, or quantities; (2) false representations that goods or services are new or original; and (3) false representations that goods or services are of a particular grade, standard, or quality. Under UDTPA, liability may arise for advertisements that are only partially accurate, if the inaccuracies are likely to confuse prospective consumers. Ambiguous representations may require clarification to prevent the imposition of liability. For example, a business that accuses a competitor of being “untrustworthy” may be required to clarify that description with additional information if consumer confusion is likely to result.

Inside Regulation of Advertising