FTC Issued Policy Statement Regarding Advertising Substantiation (November 23, 1984)

FTC Policy Statement Regarding Advertising Substantiation

November 23, 1984

The Federal Trade Commission (“FTC”) issued a policy statement regarding advertising substantiation, following a review of public comments and its own analysis of the program. This statement reaffirms the requirement that advertisers must have a reasonable basis for any claims made in their advertisements before those claims are disseminated. The FTC emphasizes its commitment to vigorous enforcement of this requirement, noting that failure to substantiate claims constitutes an unfair or deceptive act under Section 5 of the FTC Act.

The statement clarifies that when advertisements make express claims about the support for a product, the advertiser must possess at least the level of substantiation explicitly stated. In cases where claims are implied, advertisers are still expected to have reasonable substantiation that aligns with consumer expectations. The FTC considers various factors in determining what constitutes a reasonable basis, including the type of claim, the product involved, potential consequences of false claims, and expert opinions.

The FTC has historically employed two methods for seeking substantiation: industry-wide inquiries and specific requests to individual companies. However, it has determined that targeted requests to individual firms are more efficient and effective. The Commission plans to prioritize nonpublic requests for substantiation, recognizing that public input is generally less relevant in these investigations.

Additionally, the policy outlines circumstances under which the FTC may consider post-claim evidence—information obtained after the dissemination of an advertisement. While the absence of prior substantiation can lead to violations, post-claim evidence may be relevant in assessing the truth of a claim, evaluating the adequacy of previous substantiation, or determining the appropriate scope of enforcement actions.

The FTC also notes its relationship with self-regulatory groups, asserting that their findings will not automatically protect firms from FTC action, nor will negative determinations automatically lead to prosecution. Each case will be evaluated on its individual merits, allowing for independent judgment by the FTC. Overall, the statement aims to clarify the expectations for advertising substantiation and enhance the effectiveness of the Commission's enforcement efforts.

 

For more information, see here:  https://www.ftc.gov/public-statements/1984/11/ftc-policy-statement-regarding-advertising-substantiation

 

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