Monday, September 15, 2008

The Federal Trade Commission Act of 1914

It wasn’t until the early 1900’s that the United States was considered to be an industrial society. At this point in time regulatory issues involving false advertising and unfair methods of competition began to arise within the United States. The Federal Trade Commission Act of 1914 created the Federal Trade Commission as well as prohibited the unfair practices, acts, and methods of competition in interstate commerce. Areas in which the act covers pertaining to fair and free trade competition include Deceptive Practices, Price Fixing, Merger Prohibition, and unfair competition. The FTC was put in place to monitor and enforce the laws put in place by the Federal Trade Commission Act of 1914 in order to regulate the behavior of businesses.

In class I discussed the role that the Federal Trade Commission has in Advertising for profit or business purposes. The idea that commercial speech is not considered to be a part of the political marketplace of ideas prohibits the protection and freedoms that are entitled to noncommercial speech in the First Amendment of the Constitution. When referring to commercial advertising, the laws require that objective claims must be truthful and substantiated. For example if a business advertises “We have the number one product on the market” then by law the statement is required to be truthful as well as have sufficient information in order to prove so. However the laws regarding deceptive advertising consider “puffery” or subjective claims to be fair game and are not monitored by the FTC.

The question brought forward in class was how free speech and commercial speech differ in advertising. After further research I have found how controversial this subject is and that many lawsuits throughout history have helped to define and decipher between free speech and commercial speech. In the history of legal matters regarding business corporations right to free speech, many lawsuits have helped decipher exactly what can be determined as legal when pertaining to businesses. For the most part courts have agreed upon the fact that businesses are allowed the right of political speech (free speech), but there is a very fine line between political speech and commercial speech that is some cases can be very unclear and problematic. It wasn’t until the creation of the Central Hudson four part test that courts were capable of identifying whether the government regulations violated the first amendment rights of free speech. Furthermore, courts continued to make decisions narrowing down what would fall under free speech in advertising.

This case study has opened my eyes to how the regulation of communication in the media has affected the laws and policies of our society. I have been amazed at how much the government plays a role in controlling the media, as well as how much effort is put into the protection consumers. Thank you for your time

-Farron McCauley Carmichael

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