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      Subjects

      This handbook

      Subject

      Advertising Law

      Substantiation of express and implied claims, endorsements and material connections, comparative advertising, pricing and reference price claims, negative option and cancellation rules, dark patterns, made in USA claims, and warranty disclosure.

      01
      Advertising Law

      Comparative Claims and Challenges by Competitors

      A comparative claim must be supported by testing of the advertised product and the named comparison product, performed under identical conditions on the versions currently sold. Where the comparison names its evidence, the evidence must exist in that form. Beyond agency enforcement, a rival may sue under Section 43(a) of the Lanham Act for false advertising, seeking an injunction and monetary relief, or bring the claim before a self-regulatory advertising body.

      6 min readFederal and state

      02
      Advertising Law

      Endorsements, Reviews and Material Connections

      The Endorsement Guides at 16 CFR Part 255 treat an endorsement as an advertising message reflecting the opinions or experience of someone other than the sponsoring advertiser. A material connection is any relationship between endorser and advertiser that the audience would not expect and that might affect how the endorsement is weighed. Disclosure must be clear and conspicuous and must appear with the endorsement itself. The advertiser, the endorser and an intermediary agency can each be liable.

      6 min readFederal law

      03
      Advertising Law

      Made in USA and Other Origin Claims

      An unqualified Made in USA claim requires that the product be all or virtually all made in the United States: final assembly or processing here, and all significant processing and virtually all ingredients or components of domestic origin. The Made in USA Labeling Rule at 16 CFR Part 323 applies the standard to labels and to online descriptions, and 15 U.S.C. 45a authorizes penalties. A qualified claim may describe the domestic content accurately without asserting complete domestic origin.

      6 min readFederal law

      04
      Advertising Law

      Environmental Marketing Claims and the Green Guides

      The Green Guides interpret the deception prohibition of the Federal Trade Commission Act as applied to environmental claims. An unqualified general environmental benefit claim is treated as unsupportable because it conveys far-reaching benefits the marketer cannot prove. Specific claim types carry their own tests: degradation within one year after customary disposal, recycling access for at least sixty percent of consumers, and disclosure where a carbon offset reduction is two years away.

      6 min readFederal law

      05
      Advertising Law

      Express and Implied Claims, and the Net Impression

      Deception analysis begins by identifying the claim. An express claim is stated in the advertisement and its meaning is settled by the words. An implied claim is conveyed without being stated, and it is identified from the net impression of the advertisement as a whole, including images, sequence, sound and omitted qualifications. Where an implied claim is reasonably clear from the face of the advertisement, extrinsic evidence is not required to establish it.

      6 min readFederal law

      06
      Advertising Law

      Substantiation: What a Claim Must Prove Before It Is Made

      Under the Federal Trade Commission Act an objective product claim carries an implied representation that the advertiser had a reasonable basis for it at the time of dissemination. Proof acquired after publication does not cure the failure. Where the claim names its support, the advertiser must hold that support in the form claimed. Health, safety and efficacy claims are ordinarily measured against competent and reliable scientific evidence.

      6 min readFederal law

      07
      Advertising Law

      Negative Option Offers, Renewals and Cancellation

      A negative option offer treats a consumer's inaction as acceptance of a continuing charge. The Restore Online Shoppers' Confidence Act at 15 U.S.C. 8403 requires clear and conspicuous disclosure of all material terms before billing information is obtained, express informed consent to the charge, and a simple mechanism to stop recurring charges. The prenotification rule at 16 CFR Part 425 adds disclosure, shipment and cancellation duties for plans that ship by default.

      6 min readFederal law

      08
      Advertising Law

      Written Warranties, Disclaimers and Presale Availability

      The Magnuson-Moss Warranty Act at 15 U.S.C. 2301 to 2312 governs written warranties on consumer products. A warranty on a product costing more than a threshold amount must be designated full or limited, and its terms must be disclosed in a single document in readily understood language under 16 CFR Part 701. A supplier that gives a written warranty may not disclaim or modify implied warranties, though a limited warranty may restrict their duration. Part 702 requires presale availability.

      6 min readFederal law

      09
      Advertising Law

      Reference Prices, Sales and Was-Now Claims

      Under 16 CFR Part 233 a former price comparison is truthful only where the higher price was the price at which the article was openly and actively offered for a reasonably substantial period, in good faith and not to establish a fictitious comparison. Comparisons to competitors' prices must reflect prices actually charged in the trade area for comparable goods. A list price comparison requires that substantial sales occur at the list figure.

      6 min readFederal law

      10
      Advertising Law

      Free, Bonus and Shipping and Handling Claims

      Under 16 CFR Part 251 a free offer requires that the article bought to obtain the free item be sold at its regular price, meaning the price at which it has been openly and actively sold in the trade area for a reasonably substantial period. The seller may not increase that price, reduce quantity or quality, or recoup the cost through a shipping and handling charge. All conditions must be disclosed with the offer, and repeated free offers of the same article are limited in frequency and duration.

      6 min readFederal law

      11
      Advertising Law

      Clear and Conspicuous Disclosure in Practice

      A required disclosure must be clear and conspicuous, meaning difficult to miss and easy to understand for the audience the claim reaches. Adequacy is judged on placement relative to the claim, prominence against the surrounding material, absence of distracting elements, repetition where a claim recurs, and delivery in the same medium as the claim. A hyperlink, a hover state, a footnote or a separate terms page will usually fail where the qualification is needed to prevent deception.

      6 min readFederal law