Information About The Federal Trade Commission

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The settlement would, according to the FTC, "require Reynolds to include a disclosure in most advertising for Winston or any other tobacco products Reynolds advertises as having no additives." The order requires that "the disclosure must be included in all advertising for Winston no-additive cigarettes, regardless of whether that advertising contains a 'no additives' claim, for a period of one year beginning no later than July 15, 1999. Thereafter, the disclosure must be included in all Winston advertising that represents (through such phrases as 'no additives' or '100% tobaccos') that the product has no additives." The FTC agreement has an important additional specification. "The disclosure is not required if Reynolds has scientific evidence demonstrating that its 'no additives' cigarette poses materially lower health risks than other cigarettes."

In the corrective advertising agreements, the FTC can indicate the type of corrective language that is necessary, the dollar amount or percentage of the advertising budget to be spent on correcting the false Omega Replica(http://www.replica-king.com/B-Omega-51.html) impressions, ...
... and even the size of the ads and the outlets in which they will appear. Thus, for example, the settlement over the Winston claim of no additives includes the requirement that "the disclosure must be placed in a rectangular box 40 percent of the size of the Surgeon General's warning, in a clear and prominent location." Such FTC specifications tax the ingenuity of copywriters to incorporate the required disclosure without undercutting the ability of the ad to sell the product.

Appointees of the Reagan administration made three changes in FTC operations. Rather than focusing on abuses in an entire industry (such as funeral operations and used car sales), the FTC started to work on a case-by-case basis. Second, the conditions required to establish deception were circumscribed. Whereas formerly the potential to mislead was considered deceptive, now a consumer acting reasonably in the circumstances must prove that an ad's representation, omission, or practice affected the actual buying decision. The FTC policy articulated in 1984 stated that "any representation, omission, or other practice that is likely to mislead the consumer acting reasonably under the circumstances to the consumer's detriment" was deceptive. Under the earlier definition, "any representation, omission, or other practice that has the capacity to mislead the consumer who is not sophisticated, wary, or cautious" constituted deception. Finally, the ground rules for substantiation of advertising claims were reframed. Inquiries are no longer conducted in public. Substantiation investigations are now revealed only upon completion. These changes shifted the burden of proof from the advertiser to the consumer.

This shift indicated the power of regulatory agencies to set their own course. Reagan's FTC chair, James Miller, tried unsuccessfully to get Congress to redefine "deceptive acts or practices." Miller then offered the FTC, controlled by like-minded appointees, a statement of policy that supposedly analyzed the law of deception but actually narrowed FTC jurisdiction in ways consistent with his failed congressional initiative.

Deception is one of two practices over which the FTC has jurisdiction. The other is unfairness. In August 1994, Congress ended a decade-and-a-half dispute about what constituted unfair advertising by defining unfairness as "acts or practices that cause or are likely to cause substantial injury to consumers, which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or competition." From 1980 to 1994, Congress Omega Replica Watches(http://www.luv-replica.com/GoodsBrand/Omega_Replica_Watches-16.html) had not approved legislation reauthorizing the FTC because the House and Senate could not agree on the extent of FTC au?thority.2 The impasse between the House and Senate originated in 1976, when an FTC inquiry seemed to be moving toward arguing that all television advertising aimed at children is unfair. The House took the position of the consumer groups, the Senate that of the advertising industry.

The FTC's Division of Advertising Practices focuses on
1. Tobacco and alcohol advertising, including monitoring for unfair practices or deceptive claims, and reporting to Congress on cigarette and smokeless tobacco labeling, advertising, and promotion.
2. Advertising claims for food and over-the-counter drugs, particularly those relating to nutritional or health benefits of foods and safety and effectiveness of drugs or medical devices.
3. Performance and energy-saving claims made for energy-related household and automotive products.
4. Environmental performance claims made for consumer products, including claims that products are environmentally safe, ozone-friendly, or biodegradable.
5. Infomercials, long-form (30-minute) broadcast advertising, to ensure that both the format and content of programs are non-deceptive.
6. General advertising at the national and regional level, particularly advertising making objective claims that are difficult for consumers to evaluate.