Magazine article Editor & Publisher

Advertising Regulation's 'State of the Union:' Chairman of the Federal Trade Commission Discusses Government and Monitoring Policy

Magazine article Editor & Publisher

Advertising Regulation's 'State of the Union:' Chairman of the Federal Trade Commission Discusses Government and Monitoring Policy

Article excerpt

I DO NOT believe that major changes in advertising regulation are needed.

When I rejoined the Federal Trade Commission in 1995, I said that I believed the FTC's advertising program had been moving in the right direction. After a year, I am even more convinced this is true.

One reason is that the program, over time has become firmly based on a set of long-standing principles that the Commission began developing in the 1970s.

At the core is a recognition of the important role that advertising plays in the competitive process, and an understanding that unnecessary restraints on truthful advertising can be as harmful to consumers as deceptive or unfair advertising.

Similarly, the importance to consumers of advertising in a market economy has been accorded constitutional protection, and the Supreme Court's commercial speech doctrine has articulated a common-sense set of standards, against which would-be regulators of advertising must measure their actions.

In fact, the U.S. antitrust laws, the commercial speech doctrine, private Lanham Act enforcement, and the adoption of FTC-type, deception-based advertising regulatory policies by almost all states have combined to form a de facto national advertising policy in the United States.

I would add to this mix the important fact that the advertising industry itself has strongly embraced these values.

Although in FTC cases, there is sometimes heated debate by advertisers and advertising agencies about whether a particular claim is deceptive or unsubstantiated, there is rarely debate from the advertising industry concerning the appropriateness of strong enforcement against false and deceptive claims.

The idea, once widely advanced, that the "market" will do a better job of punishing deceptive claims than any band of bureaucrats is seldom heard any longer.

Simply because an advertising campaign has been successful in the past is no guarantee that it will continue to be successful in the future. An advertising campaign that is not regularly adjusted to reflect changing conditions is almost certain to cot lapse in the long run, no matter how effective it was when initiated.

The same is true for government programs. It is essential that the FTC carefully consider what changes or adjustments it should be making in its programs to get the job done.

What I would like to see us do better, or differently, than we have in the past includes increasing emphasis on our regulatory review program, making greater use of industry self-regulation, using more consumer education to supplement our case-by-case efforts to contain consumer fraud, and considering carefully the remedies we use in the cases we do bring.

One of the things I do not think needs change is the focus of case-by-case enforcement. I believe that it is essential for the FTC to maintain an active enforcement program that requires national advertisers to meet high standards for truthfulness and substantiation of their claims.

During the past year, we have continued to bring cases in traditional areas of FTC responsibility, focusing primarily on advertising claims about health and safety, and those posing the risk of serious economic harm to consumers. "

We also have taken action to highlight the importance of developing trends, such as advertising using formats that blur the line between advertising and editorial content.

And, we have jointly announced with the state attorneys general a package of cases targeting deceptive claims on the Internet. These Internet advertising cases make clear that the prohibitions against deceptive advertising that apply television, cable, newspapers and other traditional media apply with equal force to online advertising.

In addition to its responsibility to bring cases, the FTC must review its own policies and procedures to eliminate or revise rules, guides and procedures that have become obsolete, inefficient or outmoded. …

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