Lies, Damn Lies, and Misleading Advertising: The Role of Consumer Surveys in the Wake of Mead Johnson V. Abbott Labs

Article excerpt

"There are three kinds of lies: lies, damn lies, and statistics." (1) Just as Benjamin Disraeli noted, statistics yield results that one can skew in a variety of ways. If Disraeli was around to observe American society in the second half of the twentieth century, he might have included another category in his list of lies: advertising. Advertising, like statistics, is recognized commonly as a medium where facts can be interpreted, twisted, and emphasized according to the advertiser's needs. When business judgment and professional ethics fail to enforce reasonable standards, the courts may have to decide if advertisers have twisted the facts too far. This Note examines how courts determine what constitutes misleading advertising and applauds the shift toward a more consistent judicial doctrine signaled by the Court of Appeals for the Seventh Circuit in Mead Johnson & Co. v. Abbott Laboratories. (2)

Advertising plays a significant role in today's economy and its presence in both print and electronic formats is likely to continue. (3) Buoyed by a strong market in 1999, advertisers increased their media expenditures by 10.3 percent over 1998 spending levels up to $87.5 billion from $79.3 billion. (4) With that kind of money in question, advertisers understandably want to get the highest possible return from their investment.

Advertisers want to make their products look as good as possible to as many consumers as possible. In today's market, they frequently attempt the task not just by saying "our product is good," but by saying "our product is better than the other guys'"--which is the basic concept behind comparative advertising. (5) The effectiveness of comparative advertising is shown not only by consumer studies, but by its continuing use by advertisers. Approximately one-third of all advertising in the United States is comparative. (6) A 1994 study of 5000 commercials by Research Systems Corporation (RSC) found that twenty-one percent of comparative ads had "superior" persuasion scores whereas only eighteen percent of the commercials that did not compare the competition received superior scores. (7) Comparative advertisements also lead to greater consumer attention and message recall than noncomparative advertisements. (8)

American consumers typically can recognize when advertisers make thinly veiled attempts to create an artificial advantage. (9) In these instances, exaggerated advertising or boasting upon which no reasonable consumer would rely is not grounds for legal action. (10) The term for this type of representation and manipulation of advertising statistics is "puffing." (11) The advertiser's object in puffing is simple: given a choice of data, pick those that make you look best; if there is no good choice, change the criteria to make the data support your product. (12) One of the more intriguing examples of puffing occurred in the computer industry's market-share calculations. The research firm PC Data tallied each color of Apple's popular iMac computer as a different model, thus ensuring that only the competing Windows/Intel models attained best-seller status. (13)

The effectiveness of an advertisement claiming that a given product is better than its competitors increases when the ad cites a scientific study or test to "establish" the claim. (14) The modern consumer often grants a position of "mystic infallibility" to information labeled as "scientifically proven." (15) Given the effectiveness of claims with scientific support, advertisers will, perhaps understandably, tout the smallest nuances of established superiority to gain a perceived competitive advantage.

When advertisers' claims cross the line from puffing to actual falsity, enforcement of the laws of unfair competition is available to injured parties. (16) There are a variety of legal options, (17) but the predominant legislation for addressing charges of false advertising --and the legal focus of this Note--is Section 43(a) of the Lanham Act. …