Deception is the Primary Thing That We Advertising and Marketing Lawyers Have to Worry About. But It Isn’t the Only Thing.
Claims that certain types of ads are “unfair” or violate public policy have gained considerable traction overseas in recent months. For example, there is a brand-new Israeli law that bans the use of overly thin models in advertising. That law certainly isn’t aimed at deception – it was passed because of concerns that the use of waif-thin models in advertising idealizes unhealthy thinness and contributes to eating disorders among teenage girls. In Great Britain, the Advertisng Standards Authority (ASA) used a similar rationale to ban a t-shirt that said “Nothing tastes as good as skinny feels.” The ASA has also used an unfairness type doctrine to take action against an airline ad that advertised that it had a “Red Hot Crew” to match its red hot fares and a clothing ad that showed a child model sitting on railroad tracks because the ad depicted an unsafe setting.
The Federal Trade Commission Act prohibits unfair as well as deceptive acts or practices. An act or practice is “unfair” if it causes or is likely to cause substantial consumer injury, the injury is not reasonably avoidable by consumers, and the injury is not offset by countervailing benefits to consumers or competition.
Deception is actually a subset of unfairness – a deceptive act is always unfair, but an unfair act is not always deceptive. Here’s an anecdote that will help you keep the two legal theories straight.
Many years ago, I heard about a company that was selling a mouth spray that was claimed to allow someone who had been drinking to pass a breathalyzer test. My first thought was that the marketer was caught between the Scylla and Charybdis. (For those of you who skipped school the day the teacher taught the Odyssey, the marketer was caught between a rock and a hard place.) Here’s what I mean. If the product didn’t work, obviously the company was guilty of deception. But if the oral spray did work, the company might be guilty of unfairness – because encouraging drunk driving could lead to substantial injury to consumers as a whole.
The FTC has blown hot and cold over the years when it comes to using its unfairness authority against advertising. The infamous “Kid Vid” rulemaking contemplated the ban of some or all television advertising aimed at children on unfairness grounds. Congress took the Commission to the woodshed as a result, prohibiting the agency from doing unfairness-based advertising rulemakings.
As a result, the FTC has avoided bringing advertising cases on an unfairness theory when it could allege deception instead. However, there have been some FTC unfair advertising cases. For example, in the early 1990s, there were television ads that encouraged children to call “900” telephone numbers (remember those?) to talk to Santa Claus, the Easter Bunny, and other fictional characters. Charges for the calls — typically $2 for the first minute –were automatically added to parents’ telephone bills. The Commission alleged the ads were unfair, not deceptive.
Other unfair advertising cases have involved safety concerns. For example, a television advertisement for instant rice depicted a young child cooking the rice on a stove without adult supervision. The Commission challenged the ad as unfair because it arguably encouraged young children to engage in unsafe behavior. Similarly, the Commission challenged a television advertisement for a doll with hair that could be washed and dried because the ad depicted a young girl using an electric hair dryer on the doll while standing next to a bathroom sink filled with water. (A speech describing all three cases can be found here.) And most recently the FTC challenged a beer commercial showing people drinking and boating.
The FTC, so far, has given no suggestion that it is about to embark on a campaign to strictly scrutinize advertising for unfairness issues, and in many cases public opinion may serve to discourage some forms of advertising or advertising themes even more so than than the FTC. While in most instances, legal review of a new advertising campaign or marketing practice will focus on truthfulness and substantiation, marketers do need to be concerned about unfairness as well – especially in children’s advertising, or advertising that depicts risky behavior. The goal is to avoid both the rock and the hard place.