Chapter 13

Advertising – When Speech and Commerce Converge 

“Our question is whether speech which does “no more than propose a commercial transaction,” is so removed from any “exposition of ideas” and from “truth, science, morality and arts in general, in its diffusion of liberal sentiments on the administration of Government,” that it lacks all protection. Our answer is that it is not.”

The Commercial Speech Doctrine highlights that the government may regulate advertising that is false, misleading or deceptive as well as advertising for unlawful goods and services. Even accurate advertising for legal goods and services may be regulated if the government demonstrates a substantial interest behind the regulation, the regulation directly advances the state’s interest, or there’s a reasonable fit between the state’s interest and the regulation. The Supreme Court often determines the limits to regulation of advertising for alcohol, tobacco, drugs, gambling and, more recently, marijuana. The growing legalization of marijuana in several states has prompted deferral and state governments to regulate marijuana ads as much as they do ads that control the promotion of alcohol products. In 2014, the U.S. Supreme Court established that a plaintiff has standing to bring suit under the Lanham Act when 1) the defendants actions occurred inside “the zone of interest” of the Lanham Act and 2) the injury to the plaintiff is “proximately caused” by the defendants actions. Federal Trade Commission (FTC) created a policy statement that establishes the three-part federal definition of false and misleading advertising:

  1. Ad must involve a “material” representation, omission or practice
  2. The material representation must be likely to affect the consumer’s conduct or decision with regard to a product or service
  3. The representation must be likely to mislead a reasonable consumer acting reasonably in the circumstances 

The FTC and federal and state legislators have dealt with improper advertising practices online. Congress enacted the Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM) to help prevent unsolicited e-mail messages. A majority of states also have anti-spam laws, though a section of at least one, Virginia’s, have been ruled unconstitutional. 

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