Question 1

In the Central Hudson case the Supreme Court established a four-step test to determine the constitutionality of advertising regulation.Which of the following is not a correctly stated one of the steps?

Accepted Answer

The four-step test in Central Hudson consists of the following:
1. Is the commercial message protected by the First Amendment?
2. Is the government interest in regulating the commercial message substantial?
3. Does the regulation directly advance the government's interest?
4. Is the regulation no more extensive than necessary to serve that interest? 
Option B is not a correctly stated step as the question of whether the government has a "compelling reason" is not part of the Central Hudson test. The government's interest only needs to be "substantial."

Question 2

In the 1980s the FTC appeared to

Accepted Answer

In the 1980s, the FTC backed off from its aggressive role of the 1970s, indicating a decrease in the frequency and dollar amounts of fines against advertisers. There is no evidence to suggest that the FTC focused exclusively on product packaging during this time.

Question 3

Under the _________ advertisers must have a reasonable basis,in advance,for all verifiable product claims made.

Accepted Answer

The Prior Substantiation Doctrine requires advertisers to have a reasonable basis for all product claims before making them. This doctrine is enforced by the Federal Trade Commission (FTC) and is a part of the advertising industry's self-regulation. The other options, industry guides, trade regulation rules, and the Lanham Act, are related to advertising regulations but do not specifically address the requirement for advance substantiation of product claims.

Question 4

The federal Trade Commission's basic authority is derived from Section 5 of the Federal Trade Commission Act,which charges the FTC with the responsibility to regulate

Accepted Answer

The correct answer is C because Section 5 of the Federal Trade Commission Act gives the FTC the authority to regulate unfair or deceptive acts or practices affecting commerce. This includes practices such as false advertising, deceptive pricing, and other fraudulent business practices. The FTC does not regulate all advertising agencies' business practices or any expression that mentions a specific product or service by name, as stated in answer choices A and B. Therefore, the best choice is C.

Question 5

The Federal Trade Commission has defined deceptive advertising as a material representation or omission that

Accepted Answer

Deceptive advertising is defined as a material representation or omission that is likely to mislead a reasonable consumer. It does not require that the ad misleads every consumer or contains false express representations. Therefore, option C is the best choice as it correctly summarizes the FTC's definition of deceptive advertising.

Question 6

The Federal Trade Commission is

Accepted Answer

The correct choice is D as the Federal Trade Commission is an independent federal agency that is headed by five commissioners. A is incorrect as it is not just an advisory agency, but has regulatory powers. B is incorrect as it is not within the Labor Department but is a separate entity. C is incorrect as it is not a nonprofit watchdog organization funded by government grants but is a government agency.

Question 7

In the famous Rapid Shave case,a commercial for the shaving cream was held deceptive because

Accepted Answer

In the Rapid Shave case, the deceptive aspect was the use of a Plexiglas mock-up to simulate the product's performance, misleadingly suggesting that the product had capabilities that it did not actually possess.

Question 8

A "material" representation in an ad is one that

Accepted Answer

A "material" representation in an ad is one that is likely to influence a consumer's choice of a product. This means that the representation has the potential to affect the consumer's decision to purchase the product.

Question 9

What is the legal status of commercial speech that is false or misleading?

Accepted Answer

The legal status of false or misleading commercial speech is that protection is deemed lost if the expression is false or misleading. While commercial speech does receive some First Amendment protection, it is not an absolute right and can be restricted if it is found to be deceptive or misleading. Therefore, false or misleading commercial speech is not fully protected under the First Amendment. Additionally, it may be subject to legal action by individuals or government agencies.

Question 10

In which case did the Supreme Court first hold that "pure commercial speech" is generally protected by the First Amendment?

Accepted Answer

In Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, the Supreme Court held that "pure commercial speech" which only proposes a commercial transaction is protected by the First Amendment. This case established the framework for First Amendment protection of commercial speech.

Question 11

Historically,commercial speech was classified by courts as a form of expression unprotected by the First Amendment.In what case was this view endorsed by the Supreme Court?

Accepted Answer

The Supreme Court endorsed the view that commercial speech was unprotected by the First Amendment in the case of Valentine v. Chrestensen in 1942.

Question 12

What did the government have to show in the Bolger case in order for the federal statute against mailed contraceptive ads to be upheld?

Accepted Answer

In the Bolger case, the government needed to demonstrate that the restriction on mailed contraceptive ads was carefully tailored to serve a substantial interest, aligning with the principles of intermediate scrutiny applied to content-neutral restrictions on speech.

Question 13

If the Commission determines that a voluntary settlement cannot satisfactorily be achieved with an advertiser,then it typically will seek a binding

Accepted Answer

If a voluntary settlement cannot be reached between the Commission and an advertiser regarding deceptive or unfair practices, a cease and desist order may be issued. This order requires the advertiser to stop engaging in the deceptive or unfair practices immediately, under the threat of legal action if they continue. Therefore, option B is the best choice. A class action lawsuit, license revocation, or public warning may be pursued in certain situations, but a cease and desist order is the most typical action taken by the Commission.

Question 14

In the 1999 case of Greater New Orleans Broadcasting v.United States the Supreme Court held that:

Accepted Answer

In the case of Greater New Orleans Broadcasting v. United States, the Supreme Court held that where gambling casinos are legal, the government may not prohibit their advertising unless the ban directly advances a substantial interest. Therefore, option D is the correct answer.

Question 15

An advertisement can be ruled deceptive even though it is literally true in every respect.

Accepted Answer

A statement may be technically true, but if it is presented in a way that is misleading, ambiguous, or incomplete, it could still be considered deceptive. The Federal Trade Commission's definition of deception includes both "misrepresentations" and "omissions" of material information. Therefore, advertisers must be careful not only with the content of their messages but also with the way they present them.

Question 16

One FTC industry guide specifies that an advertising endorsement must always reflect the honest beliefs of the endorser.

Accepted Answer

The FTC industry guide on endorsements states that an advertising endorsement must always reflect the honest beliefs or experiences of the endorser, and should not be deceptive or misleading to consumers. This is in order to protect consumers and promote fair advertising practices.

Question 17

The FTC will not rule an advertising claim deceptive if the claim qualifies as "puffery."

Accepted Answer

Puffery refers to exaggerated or vague advertising claims that are considered subjective and not meant to be taken literally. The FTC recognizes that consumers are not likely to take puffery claims seriously or rely on them to make purchasing decisions, and therefore does not consider them to be deceptive advertising practices.

Question 18

Disclosure requirements are generally viewed by the courts as a less objectionable kind of speech restriction than outright bans.

Accepted Answer

This is because disclosure requirements are seen as a means of ensuring transparency and accountability, rather than as an attempt to suppress or censor speech. The courts have generally upheld disclosure requirements as constitutional, but have been more wary of outright bans on speech.

Question 19

Why did the Court in Bolger v.Youngs Drug Products classify the mailings as commercial speech?

Accepted Answer

The Court in Bolger v. Youngs Drug Products classified the mailings as commercial speech because the pamphlets included references to a specific product, the company had an economic motive for mailing the pamphlets, and the company paid for the pamphlets.

Question 20

In 2009 the FTC updated its Guides Concerning the Use of Endorsements,and the Guides now cover

Accepted Answer

The 2009 update to the FTC Guides specifically covers blogging and social media endorsements, requiring that bloggers and online influencers disclose any material connections they have with the products or services they are endorsing. The other options (college lectures, political speeches, newspaper editorials) are not explicitly covered by the FTC Guides on endorsements.

Quiz 12: Commercial Speech