Individual Cases | Nick Papadis | April 25, 2016

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Individual Cases

by Nick Papadis Show/Hide
  1. 1 Show/Hide More Current FTC Doctrine on Deceptive Advertising by Nick Papadis
    Original Creator: Nick Papadis
    The FTC looks closely at truth in advertising on a regular basis. The government agency especially focusses advertising of items that could affect the health of consumers. However, they do review all types of advertisements and protecting consumers from deception or fraud.  The FTC is also responsible for bringing legal action in instances where they find that a company has engaged in deceptive advertising, or has tried to mislead consumers.  Several current cases being faced are surrounding the topics of consumer health and eco friendly products.  However, action can be brought in any case of false advertising that impacts consumers.
    1. 1.1 Show/Hide More General Information
      General overview of the current FTC Doctrine as it applies to false advertising and protecting consumers through press releases on current and recent cases brought by the FTC
      1. 1.2.1 Show/Hide More Stratford Career Institute
        A recent case of the FTC cracking down on online high schools advertising diploma completion without accreditation.
      2. 1.2.4 Show/Hide More Other online high schools
        Another example of cases brought against online high schools that falsely advertised the degree programs offered and their accreditation.
      3. 1.2.5 Show/Hide More New Guidelines for Online High Schools
        New guidelines were released as a result of these cases. The new guidelines help distinguish ways to identify a scam or false advertising with online high school programs. Additionally the FTC also provides resources for verifying a scam.
      4. 1.2.6 Show/Hide More DirecTV Case
        Actions brought against DIRECTV for falsely advertising prices. The company did not disclose that the rates would increase $45 after the initial year. The FTC released this press release in regards to the high profile case.
      5. 1.2.7 Show/Hide More How to file a complaint with the FTC
        This video made by the FTC shows how to file a complaint for those who feel they have found something that is false advertising or a scam
        Notes:
        The video recommends when submitting a complaint to provide the following information:<br /> Your contact information: name, address, phone number, email<br /> The type of product or service involved<br /> Information about the company or seller: business name, address, phone number, website, email address, representative’s name<br /> Details about the transaction: the amount you paid, how you paid, the date
      6. 1.2.8 Show/Hide More CNN Reports on FTC Crackdown
        CNN Reports on FTC Crackdown
      7. 1.2.9 Show/Hide More Complaint in the case of FTC vs DirecTV
        Complaint in the above case brought forth by the FTC. “In numerous instances since 2007, Defendants have disseminated or have caused to be disseminated advertisements for Defendants’ subscription service, including but not limited to the attached Exhibits 1 through. These advertisements direct potential customers to Defendants’ telephone numbers and Internet website, www.directv.com. These advertisements contain the following statements regarding pricing for their subscription service: “All New! Limited Time Offer!…Now only $19.99*/mo.” (Exhibit 1) (October 2014).”
  2. 2 Show/Hide More FTC and L’Oreal’s false ‘scientific’ tests by Victoria Haviland
    Original Creator: Nick Papadis
    The key legal issue in this case is deceptive advertising. In 2014, L’Oreal, a French cosmetics and beauty company created an advertising campaign for Lancome Genifique and L’Oréal Paris Youth Code skin care products. The ads guaranteed anti-aging benefits – and Lancôme Génifique line claimed that, “Genes produce specific proteins. With age, their presence diminishes. Now, boost genes’ activity and stimulate the production of youth proteins.” Promising “visibly younger skin in just 7 days.” (“FTC to L’Oréal: Scientific claims need proof that’s more than just skin deep.”) Additionally, L’Oréal stated that its claims were “clinically proven” and that consumers could “crack the code to younger acting skin.” (“FTC to L’Oréal: Scientific claims need proof that’s more than just skin deep.”) The FTC discovered that the publicized “studies” failed to test the products including any of their ingredients. The FTC complaint stated that L’Oréal made false and unsupported claims. (“FTC to L’Oréal: Scientific claims need proof that’s more than just skin deep.”) In order to settle the deceptive advertising case, L’Oréal agreed to discontinue making gene-related claims regarding their facial skin care products unless supported by competent and reliable scientific evidence. This case addresses the widely used practice issue of deceptive advertising, specifically with beauty products. Lastly, marketers must support their claims with accurate and sufficient evidence in order to ensure customer satisfaction and prevent lawsuits.   
    1. 2.1 Show/Hide More Summary article titled "We’re not getting any younger: L’Oréal settles FTC charges over deceptive anti-aging claims"
      Article gives an abbreviated version of the information related to the FTC's charges against L'Oreal.
      1. 2.2.1 Show/Hide More FTC Charges on Deceptive Cosmetic Advertising
        The link provides an overview of L’Oreal’s false “scientific” tests and the company “has agreed to settle Federal Trade Commission charges of deceptive advertising.”
      2. 2.2.2 Show/Hide More Complaint filed against L'Oreal
        This Complaint lists the various claims made by L’Oréal advertisements. The exhibits elaborate L’Oreal’s use of “false advertisements, in or affecting commerce in violations of Sections 5(a) and 12 of the Federal Trade Commission Act.”
      3. 2.2.3 Show/Hide More AGREEMENT CONTAINING CONSENT ORDER
        “Agreement by L’Oreal and FTC Containing Consent Order.” The consent order is used to resolve allegations. The agreement clarifies and provides the following definitions: “commerce”, “competent and reliable scientific evidence”, “cosmetic”, “covered product”,  “including”, “and”, “or.” The settlement states that representation for L’Oreal must be “true, non-misleading.” L’Oreal is prohibited from making gene-related claims regarding their facial skin care products unless supported by competent and reliable scientific evidence.
    2. 2.3 Show/Hide More Ads from the L'Oreal Case (multimedia)
      FTC released six exhibits: L’Oreal advertisement photos. The advertisements illustrate L’Oreal’s false claims, “Clinically proven. Use AM and PM for powerful skin results in 7 days. In addition, Exhibit B suggests that by using the product at night, (New Génifique Repair Youth Activating Night Cream) will “boost the activity of genes” and “night after night, skin is visibly younger and rested, as if you had slept 2 extra hours.”
  3. 3 Show/Hide More Central Hudson v. Public Service Commission by Connor Luce
    Original Creator: Nick Papadis

    The key legal issue in this case is commercial speech.  The case, which was argued on March 17, 1980 and decided on June 20, 1980, was between Central Hudson Gas & Electric Corp. and the New York Public Service Commission.  In order to promote the conservation of energy, the Public Service Commission aimed to restrict Central Hudson from advertising their services and, by association, the use of electricity.  Commercial speech, which refers to “speech done on behalf of a company or individual for the intent of making a profit” (Wikipedia), is central to the arguments of this case.  The Supreme Court ultimately ruled in favor of Central Hudson Gas & Electric, arguing that the Public Service Commission’s advertising regulations violated Central Hudson’s First and Fourteenth Amendment rights.

    Some Cases related to this case include:

      • Posadas de Puerto Rico Associates v. Tourism Company of Puerto Rico
      • 44 Liquormart Inc. V. Rhode Island

      1. 3.1.1 Show/Hide More Background on US Energy Crisis
        Gives background information on the energy crisis in US at the time, more reasoning for the Public Service Commission’s restriction
      2. 3.1.2 Show/Hide More Case overview of Central Hudson vs. Public Service Commission
        In-depth overview of the case that explains in detail the implications of the court’s ruling in the conclusion of the article
      3. 3.1.3 Show/Hide More Further Background on the Central Hudson vs Public Service Commission case
        Provides more overview of the case and addresses key questions and explains specifically why the First and Fourteenth Amendments were being violated.  This source also contains links to primary sources within the page.
      1. 3.2.2 Show/Hide More Full Opinion from the Supreme Court
        Provides opinion, concurrences, and dissent in Central Hudson v. Public Service Commission
      2. 3.2.3 Show/Hide More Copies of the notes in Central Hudson v. PSC
        Full set of photo-copied notes and opinions of the case
      3. 3.2.4 Show/Hide More Central Hudson in the style of Dr. Suess
        Central Hudson in the style of Dr. Suess
  4. 4 Show/Hide More POM Wonderful LLC v Coca-Cola Co. by Michael Cherry
    Original Creator: Nick Papadis
    Similar to Case 3 involving L’Oreal, this case also deals with deceptive advertising in dealing with juices.  In 2014, POM Wonderful sued competitor Coca-Cola over an advertisement that was seen by them as deceptive to the consumer, and thus caused for a loss in sales of the POM Wonderful drink.  The Coca-Cola product, under the sub-brand Minute Maid, claimed that the juice drink it was selling was a five juice blend.  This was deceptive, as claimed by POM Wonderful, because the label on the container had the words pomegranate and blueberry much more prominently and boldly displayed than the other juices present, primarily apple and grape.  This is an issue because it could be deceiving to a customer thinking they are getting a juice that is primarily pomegranate and blueberry, when it is actually a majority of the much cheaper apple and grape juices.  There was only 0.3 and 0.2 percent of pomegranate and blueberry juice, respectfully, in the overall blend, while 99.4% was a the apple and grape.  POM Wonderful sued for damages over a loss of revenue due to customers choosing this cheaper drink compared to their own pomegranate blend because they thought they were getting the same thing at a cheaper price, when in reality they were not.  The Supreme Court ruled that the libel was deceiving and misleading and needed to be changed.  The major impact of this case though was deciding whether or not one federal statute does not preclude another or not, and the court ruled that it does not.  This became particularly complex when debate over the definition and interpretation of the Lanham Act, which talks about the preclusion of statutes, came into question.  This is where the majority of the debate took place and where most of the time was spent with clarification.
      1. 4.1.1 Show/Hide More Cornell Law Summary of Pom v. Coke
        Overall summary of the case with more thorough text throughout
      2. 4.1.2 Show/Hide More ABA Explaination of the Case and the Lanham Act
        Explanation about the Lanham Act and how this case has resulted in amending and clarifying of the act
      3. 4.1.3 Show/Hide More Example ad in Pom v. Coke
        Example of the advertisement in question
      4. 4.1.4 Show/Hide More Oral Argument of the Pom v. Coke case
        Oral argument of Supreme Court case
      1. 4.2.1 Show/Hide More “Pom Wins in the Supreme Court. Now it's Pom v. Coke, Round 2”
        A Bloomberg expert provides analysis of the Supreme Court's ruling on the Pom v. Coke case.
      2. 4.2.2 Show/Hide More NPR Discusses POM Wonderful Case
        Analysis of case that talks about more could come after this proceeding
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April 25, 2016

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Nick Papadis

American University

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