The Federal Trade Commission recently announced that it will renew efforts to investigate and police companies that use misleading advertising to sell legitimate products and services.
In the keynote speech at the 2019 ANA Advertising Law & Public Policy Conference, FTC Chairman Joseph Simmons discussed the FTC’s role in ensuring that consumers have access to truthful, non-deceptive information to guide their choices among various products and services. While the FTC has been successful at prosecuting fraudulent advertisers who promote the sale of products or services that have little or no value, the Chairman stated that the FTC, in addition to protecting consumers from worthless or harmful products, must also police legitimate companies that use false or misleading claims to create an unfair competitive advantage over a product or service that is marketed truthfully. For example, in 2016, the FTC took enforcement action against Volkswagen for its deceptive claims about its vehicles’ emission standards. Although the cars legitimately worked as intended, consumers were persuaded to purchase the cars based on the false belief that the cars were less harmful to the environment than other competing vehicles.
To ensure that consumers are able to make choices based on accurate information and promote fair competition in the marketplace, the FTC will bring cases that address deceptive claims, regardless of whether the product or service offered is of value or works as intended. Companies that engage in deceptive advertising will be subject to monetary fines; however, the Chairman stated that the FTC will proceed in federal court when necessary. Additionally, the FTC will not shy away from proceeding against well-known national advertisers. The Chairman stated that “going forward, consumers can expect the FTC to continue its vigorous enforcement of consumer protection and competition laws, and to utilize its remedies to maximum effect.” Companies should review their marketing campaigns and be prepared to provide support for their claims, as simply offering a legitimate product or service will not shield companies from FTC enforcement against misleading advertising.