Bus 50 Advertising for Small Business
Social Responsibility & Legal Restraints
Legal Aspects - Regulation & Self-Regulation

Regulators:

  • Government
  • F.T.C. - Federal Trade Commission
  • F.D.A. - Food & Drug Administration
  • F.C.C. - Federal Communications Commission

Consumer Interest/Trade Groups

  • N.A.B. - National Association of Broadcasters
  • A.C.T. - Action For Children’s Television

F.T.C. Powers: Police unfair methods of competition and unfair or deceptive practices in commerce.

  • issue cease and desist orders
  • fine $10,000 per day per incident
  • investigate and enforce acts of Congress
  • Make Trade Regulation Rules (TRR’s) - industry-wide rules to define unfair practices
  • make judgments concerning existing laws
  • give orders
  • require corrective actions

The F.T.C. has staff attorneys, directors, administrative law judges, 50 commissioners to hear cases & give opinions, 5 commissioners to render opinions & give orders, then appeal to regular court of law.

Legal Remedies For Consumers and Competing Firms:

1) Full Disclosure - all data necessary for a consumer to make a safe and informed decision be provided in a promotional message

2) Substantiation - requires a firm to prove all claims in promotional messages and make info available to the public..

3) Cease-And-Desist Order - a firm must discontinue a promotion practice that is considered deceptive and modify messages accordingly.

4) Corrective Advertising - requires a firm to run new ads to correct false impressions left by previous ads.

5) Fines - dollar ($) penalties levied on a firm fro deceptive promotions.
T.R.R’S:

Truth/Deception/Unfair Practices

must prove ad deceived
“reasonable consumer” must be deceived
deception must lead to material injury

Some Areas of Interpretation:

  • reinforce false beliefs (i.e. - red crystals in bleach do something)
  • comparative ads are deceptive unless: factual, difference is
    statistically significant, issue is meaningful, harms a meaningful competitor
  • endorsements: must be qualified to make an expert judgment, must use, must examine or study the product
  • demonstrations: accurately portrayed
  • misuse of promotional funds: distribution system violations
  • Liable Parties for action/fines: manufacturer, ad agency,
    spokespersons, distributors

Voluntary Practices/Psuedo Legal:

Examples -

  • no smoking on t.v ads
  • no drinking on t.v. ads
  • no alcohol ads on t.v. over certain % alcohol content
  • anti-speeding/reckless driving
  • no nudity

Do Not Call Registry

The Federal Government has a Do Not Call Registry where you can go to avoid telemarketers and unwanted phone and fax solicitations.

The National Do Not Call Registry gives you a choice about whether to receive telemarketing calls at home. Most telemarketers should not call your number once it has been on the registry for 31 days. If they do, you can file a complaint at this Website. You can register your home or mobile phone for free. Your registration will be effective for five years.

You can sign up for your home, cell and personal numbers that are swirched on for fax machines. Fax numbers and Business to Business calls are not covered.

You can file a complaint, after 31 days since 2005, by calling or going to their website:

To Register either call or go to the website:
(888)382-1222
https://www.donotcall.gov/default.aspx

It is run by the FTC. The FTC has a FAQ page about the Do Not Call Registry regarding rules and exception:
http://www.ftc.gov/bcp/conline/pubs/alerts/dncalrt.htm#Exceptions

14. Can I register my business phone number or a fax number?

The National Do Not Call Registry is only for personal phone numbers. Business-to-business calls and faxes are not covered by the National Do Not Call Registry.

23. Can I register online if I do not have an active email address?

No. The online registration process requires an active email address. If you register online, we will send you an email message with a link in it. You need to click on the link in the email within 72 hours to finalize your registration. If you do not have an email address, you can register by phone
(1-888-382-1222).