Ignorant Consumer Standard
In evaluating the tendency of advertising to deceive, the Commission is bound to protect the public in general, the unsuspecting as well as the skeptical. Doherty, Clifford, Steers & Shenfield, Inc. v. F.T.C., C.A.6 1968, 392 F.2d 921.Antitrust And Trade Regulation 
163
That no straight thinking person would believe that a skin cream would actually rejuvenate the skin as advertised would not eliminate element of deception in the advertising, since this section prohibiting false advertising was not made for the protection of experts but for the general public which includes the ignorant, the unthinking, and the credulous. Charles of the Ritz Distributors Corp. v. F.T.C., C.C.A. 2 1944, 143 F.2d 676.Antitrust And Trade Regulation 163
Actual Deception
Representations merely having a capacity to deceive are unlawful as constituting false advertising. Charles of the Ritz Distributors Corp. v. F.T.C., C.C.A. 2 1944, 143 F.2d 676.Antitrust And Trade Regulation 163
Net Impression
In determining whether an advertisement is deceptive under the Federal Trade Commission Act, the Federal Trade Commission (FTC) examines overall net impression of ad and engages in three part inquiry: what claims are conveyed in ad; are those claims false or misleading; and are those claims material to prospective consumer. Kraft, Inc. v. F.T.C., C.A.7 1992, 970 F.2d 311, certiorari denied 113 S.Ct. 1254, 507 U.S. 909, 122 L.Ed.2d 652.Antitrust And Trade Regulation 163
The important criterion in determining whether a product is falsely advertised is the net impression which the advertisement is likely to make upon the general public. Charles of the Ritz Distributors Corp. v. F.T.C., C.C.A. 2 1944, 143 F.2d 676.Antitrust And Trade Regulation 163
In determining their falsity, advertisements must be considered in their entirety, and as they would be read by those to whom they appeal. Aronberg v. Federal Trade Com'n, C.C.A. 7 1942, 132 F.2d 165.Antitrust And Trade Regulation 163
Implied Representations
In determining whether advertisements of medicinal preparation for relief of delayed menstruation were false in failing to reveal dangerous potentialities, the buying public does not ordinarily carefully study or weigh each word in advertisement, but the ultimate impression upon mind of reader arises from the sum total of not only what is said, but also of all that is reasonably implied. Aronberg v. Federal Trade Com'n, C.C.A. 7 1942, 132 F.2d 165.Antitrust And Trade Regulation 222
Basis for Civil or Criminal Proceeding
Under this section, test of falsity of advertisement is not whether it could be basis for civil action for deceit or for criminal proceeding for obtaining money by false pretenses, but is what is likely to be net impression made upon general public by the advertisement, considered in its entirety, and as read or understood by those to whom it would appeal. Federal Trade Commission v. National Health Aids, D.C.Md.1952, 108 F.Supp. 340.Antitrust And Trade Regulation 163
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Purpose
One purpose of this section is to prevent dissemination of false advertisement for purpose of inducing or which is likely to induce, directly or indirectly, the purchase, in commerce, of food, drugs, devices or cosmetics. Feil v. F.T.C., C.A.9 1960, 285 F.2d 879.Antitrust And Trade Regulation 163
Advertisements Included in this Section
Published and broadcast statements, which were sponsored by not-for-profit corporation composed of representatives of various associations of egg producers and which were designed to allay fears of the public concerning relationship between consumption of eggs and high cholesterol were “advertisements” within this chapter, as they were representations concerning the qualities of a product and promoting its purchase and use. F.T.C. v. National Com'n on Egg Nutrition, C.A.7 (Ill.) 1975, 517 F.2d 485
Probable Effect
Cardinal factor in determining whether advertising is in violation of this section is the probable effect which the advertiser's handiwork will have upon the eye and mind of the reader. F.T.C. v. Sterling Drug, Inc., C.A.2 (N.Y.) 1963, 317 F.2d 669.Antitrust And Trade Regulation 163
Good Faith
Fact that an advertiser made his representations in good or bad faith is not determinative of whether such statements are deceptive and misleading. Doherty, Clifford, Steers & Shenfield, Inc. v. F.T.C., C.A.6 1968, 392 F.2d 921.Antitrust And Trade Regulation 163
Intent or Knowledge
This chapter does not make mental state an element of violation of this section and creates no exemption from liability for parties not involved in creation of the false advertising or for unwitting disseminators thereof, but extent of party's culpability has an important bearing on the nature of the relief that should be granted. Porter & Dietsch, Inc. v. F.T.C., C.A.7 1979, 605 F.2d 294
Under this section making it unlawful to disseminate or “cause” to be disseminated any false advertisement, the term “cause” is in said section without any qualification relating to the advertiser's state of mind, and it is immaterial whether defendant thinks that he is not violating a cease and desist order of the Commission and does not intend to come under federal jurisdiction, since said section holds him liable for the natural consequences of his act regardless of his intention. Mueller v. U.S., C.A.5 (Tex.) 1958, 262 F.2d 443.Antitrust And Trade Regulation163Antitrust And Trade Regulation378(1)
Issue of whether officer of online marketing firm participated directly in, or had authority to control, firm's deceptive acts with knowledge of, or reckless indifference to, alleged misrepresentations involved fact issues that could not be resolved on motion to dismiss claims against officer for violations of Federal Trade Commission (FTC) and state alleging violations of Federal Trade Commission Act (FTC Act) and Connecticut Unfair Trade Practices Act (CUTPA). F.T.C. v. LeanSpa, LLC, D.Conn.2013, 920 F.Supp.2d 270.Federal Civil Procedure1831
*** Important Note for Advertising Agencies****
In order to be held a participant in advertiser's deception by false advertising, the advertising agency must know or have reason to know of the falsity of the advertising. Doherty, Clifford, Steers & Shenfield, Inc. v. F.T.C., C.A.6 1968, 392 F.2d 921.Antitrust And Trade Regulation291
Materiality
False or misleading statements made in advertisement by advertisers of two weight-loss products were material, as required for false advertising claim under the Federal Trade Commission Act, where advertisements made the claims either expressly or by such strong implication that they were the functional equivalent of an express claim, even if the claims were made only implicitly, statements in the advertisement were so unambiguous and repetitive that they were clearly intended by advertisers to make the alleged claims, and even if the claims were not intended by advertisers, they were important to consumers and thus likely to affect a consumer's choice of conduct regarding a product. F.T.C. v. Bronson Partners, LLC, D.Conn.2008, 564 F.Supp.2d 119.Antitrust And Trade Regulation 163
Restitution
Seller of hair loss product was required to pay restitution to consumers or to disgorge profits, where seller's claim that product was effective constituted false advertisement under Federal Trade Commission Act; neither fact that consumers' injuries were only economic in nature, nor fact that amount of injury suffered by each individual consumer was modest amount, nor fact that seller provided money-back guarantee precluded order of restitution or disgorgement. F.T.C. v. Pantron I Corp., C.A.9 (Cal.) 1994, 33 F.3d 1088, certiorari denied 115 S.Ct. 1794, 514 U.S. 1083, 131 L.Ed.2d 722.Antitrust And Trade Regulation 294Antitrust And Trade Regulation 389(2)Antitrust And Trade Regulation 391
Federal Trade Commission (FTC) was entitled to equitable relief in the amount of companies' gross sales, minus the amount already refunded to customers, for the companies' violations of FTCA by engaging in false advertising and deceptive practices in the marketing of their dietary supplement for weight loss. F.T.C. v. Medlab, Inc., N.D.Cal.2009, 615 F.Supp.2d 1068.Antitrust And Trade Regulation 390
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The Federal Trade Commission announced that Skechers USA, Inc. agreed to pay $40 million to settle charges that the company deceived consumers by making unfounded claims in a variety of advertisements. The claims made by Skechers that were determined to be unsupported related to advertisements that claimed that Shape-ups would help people lose weight, and strengthen and tone their buttocks, legs and abdominal muscles.
* Source IP Watchdog, ABC NEWS
Evidence supported Federal Trade Commission (FTC) conclusions that marketer of electronic muscle stimulation abdominal belt deliberately made false and misleading claims about weight loss and exercise, the violations were serious, marketer's conduct was transferable to other products, and a fencing-in provision to prevent violations with respect to all claims and all products was reasonably related to the violation, whether or not the FTC could consider prior violations; marketer's campaign resulted in the sale of approximately 747,000 units with gross sales, including accessories, exceeding $19 million, marketer used a compare and save strategy knowing that infomercials for competing products claimed loss of weight, development of well-defined abdominal muscles, and an effective alternative to regular exercise, and marketer stipulated that its product could not provide those benefits. Telebrands Corp. v. F.T.C., C.A.4 2006, 457 F.3d 354.Antitrust And Trade Regulation 369Antitrust And Trade Regulation 374
Advertisements representing that weight reduction tablets contained a “unique” formula were not saved from being false or misleading, in situation in which the principal ingredient of the tablets had been used for years in many products, by contention that such ingredient was a unique pharmacological substance, in that it was a particularly weak member of a family of amphetamine-like drugs with fewer side effects than others, and thus the only drug of its class available without a prescription. Porter & Dietsch, Inc. v. F.T.C., C.A.7 1979, 605 F.2d 294, certiorari denied 100 S.Ct. 1597, 445 U.S. 950, 63 L.Ed.2d 784.Health 308
In view of fact that Food and Drug Administration had specifically recognized legality of using drugs for purposes other than those for which they have been found safe and effective, district court properly refused contention of Commission that advertising was “unfair” within this chapter because, by encouraging patronage of weight reduction clinics, it violated public policy against use of drugs not established as safe and effective. F.T.C. v. Simeon Management Corp., C.A.9 (Cal.) 1976, 532 F.2d 708.Antitrust And Trade Regulation 222
Advertisement representing that bread sold under trade mark “Lite Diet” was a low calorie food when in fact it contained same number of calories as other white bread but had thinner slices was misleading and false and constituted deceptive practices and Commission properly forbade use of the trade mark in commerce. Bakers Franchise Corp. v. F.T.C., C.A.3 1962, 302 F.2d 258.Trademarks 1073
Advertisements by marketers and distributors of weight loss supplement and endorsement by physician conveyed a materially false overall, net impression that clinical tests proved that the supplement caused rapid and substantial weight-loss, including as much as 30 pounds in two months, in violation of the Federal Trade Commission Act. F.T.C. v. National Urological Group, Inc., N.D.Ga.2008, 645 F.Supp.2d 1167, affirmed 356 Fed.Appx. 358, 2009 WL 4810345, rehearing and rehearing en banc denied 401 Fed.Appx. 522, 2010 WL 2787701, certiorari denied 131 S.Ct. 505, 178 L.Ed.2d 370.Antitrust And Trade Regulation 222
Companies' representations that clinical studies had proven their dietary supplement for weight loss could cause rapid, substantial, and permanent weight loss in any user without diet or exercise were “material,” as required to establish that the representations were an unfair or deceptive act or practice under the FTCA. F.T.C. v. Medlab, Inc., N.D.Cal.2009, 615 F.Supp.2d 1068.Antitrust And Trade Regulation 222
Advertisers' claims in advertisement for two weight-loss products, including claim that the products caused rapid and substantial weight loss without the need to reduce caloric intake or increase physical activity, were false and misleading, as required for false advertising claim under the Federal Trade Commission Act, where there was no evidence that the products were ever tested, or that they yielded the claimed results. F.T.C. v. Bronson Partners, LLC, D.Conn.2008, 564 F.Supp.2d 119.Antitrust And Trade Regulation 163
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