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Advertising is the act or practice of attracting public notice and attention. It includes all forms of public announcement that are intended to aid directly or indirectly in the furtherance or promulgation of an idea, or in directing attention to a business, commodity, service or entertainment.

Advertising as a business may be subject to reasonable regulations, but since it is neither inherently dangerous nor a nuisance per se, it cannot be prohibited. The right to engage in any lawful private business or occupation includes the right to advertise it, and this right to advertise one's commodities or services is a valuable property right. Regulations exist governing deceptive or unfair advertising, trademark infringement, unfair competition, and use of endorsements.

Many states have laws against false advertising, which vary by state. The main federal laws governing false advertising are the Federal Trade Commission (FTC) Act and the Lanham Act. Under the FTC Act, false advertising includes advertisements that make representations that the advertiser has no reasonable basis to believe, even if the representations turn out to be true. Only the Federal Trade Commission can enforce the FTC Act.

Private parties, such as consumers or competitors, can file a complaint for false advertising under the Lanham Act. To establish a violation under the Lanham Act, consumers and competitors must prove the following: (1) the advertiser made false statements of fact about its product; (2) the false advertisements actually deceived or had the capacity to deceive a substantial segment of the target population; (3) the deception was material; (4) the falsely advertised product was sold in interstate commerce; and (5) the party bringing the lawsuit (plaintiff) was injured as a result of the deception. Injury is construed as a likelihood of injury, rather than actual injury.

The term false advertisement means “an advertisement, other than labeling, which is misleading in a material respect; and in determining whether any advertisement is misleading, there shall be taken into account (among other things) not only representations made or suggested by statement, word, design, device, sound, or any combination thereof, but also the extent to which the advertisement fails to reveal facts material in the light of such representations or material with respect to consequences which may result from the use of the commodity to which the advertisement relates under the conditions prescribed in said advertisement, or under such conditions as are customary or usual.

No advertisement of a drug shall be deemed to be false if it is disseminated only to members of the medical profession, contains no false representation of a material fact, and includes, or is accompanied in each instance by truthful disclosure of, the formula showing quantitatively each ingredient of such drug.

In the case of oleomargarine or margarine an advertisement shall be deemed misleading in a material respect if in such advertisement representations are made or suggested by statement, word, grade designation, design, device, symbol, sound, or any combination thereof, that such oleomargarine or margarine is a dairy product, except that nothing contained herein shall prevent a truthful, accurate, and full statement in any such advertisement of all the ingredients contained in such oleomargarine or margarine.” (15 USCS § 55)

An accusation that is contrary to fact or truth is a false accusation. To accuse means to make a charge of wrongdoing against another. Accusation can be a formal charge of criminal wrong doing, like the accusation that is presented to a court or magistrate having jurisdiction to inquire into the alleged crime. It can also be an informal statement that a person has engaged in an illegal or immoral act.

15 U.S. Code § 54 - False advertisements; penalties (a) Imposition of penalties Any person, partnership, or corporation who violates any provision of section 52 (a) of this title shall, if the use of the commodity advertised may be injurious to health because of results from such use under the conditions prescribed in the advertisement thereof, or under such conditions as are customary or usual, or if such violation is with intent to defraud or mislead, be guilty of a misdemeanor, and upon conviction shall be punished by a fine of not more than $5,000 or by imprisonment for not more than six months, or by both such fine and imprisonment; except that if the conviction is for a violation committed after a first conviction of such person, partnership, or corporation, for any violation of such section, punishment shall be by a fine of not more than $10,000 or by imprisonment for not more than one year, or by both such fine and imprisonment: Provided, That for the purposes of this section meats and meat food products duly inspected, marked, and labeled in accordance with rules and regulations issued under the Meat Inspection Act [21 U.S.C. 601 et seq.] shall be conclusively presumed not injurious to health at the time the same leave official “establishments.”

(b) Exception of advertising medium or agency No publisher, radio-broadcast licensee, or agency or medium for the dissemination of advertising, except the manufacturer, packer, distributor, or seller of the commodity to which the false advertisement relates, shall be liable under this section by reason of the dissemination by him of any false advertisement, unless he has refused, on the request of the Commission, to furnish the Commission the name and post-office address of the manufacturer, packer, distributor, seller, or advertising agency, residing in the United States, who caused him to disseminate such advertisement. No advertising agency shall be liable under this section by reason of the causing by it of the dissemination of any false advertisement, unless it has refused, on the request of the Commission, to furnish the Commission the name and post-office address of the manufacturer, packer, distributor, or seller, residing in the United States, who caused it to cause the dissemination of such advertisement.

For the purposes of sections 52 to 54 of this title— (a) False advertisement (1) The term “false advertisement” means an advertisement, other than labeling, which is misleading in a material respect; and in determining whether any advertisement is misleading, there shall be taken into account (among other things) not only representations made or suggested by statement, word, design, device, sound, or any combination thereof, but also the extent to which the advertisement fails to reveal facts material in the light of such representations or material with respect to consequences which may result from the use of the commodity to which the advertisement relates under the conditions prescribed in said advertisement, or under such conditions as are customary or usual. No advertisement of a drug shall be deemed to be false if it is disseminated only to members of the medical profession, contains no false representation of a material fact, and includes, or is accompanied in each instance by truthful disclosure of, the formula showing quantitatively each ingredient of such drug.

(2) In the case of oleomargarine or margarine an advertisement shall be deemed misleading in a material respect if in such advertisement representations are made or suggested by statement, word, grade designation, design, device, symbol, sound, or any combination thereof, that such oleomargarine or margarine is a dairy product, except that nothing contained herein shall prevent a truthful, accurate, and full statement in any such advertisement of all the ingredients contained in such oleomargarine or margarine.

(b) Food The term “food” means (1) articles used for food or drink for man or other animals, (2) chewing gum, and (3) articles used for components of any such article. (c)

Drug The term “drug” means (1) articles recognized in the official United States Pharmacopoeia, official Homoeopathic Pharmacopoeia of the United States, or official National Formulary, or any supplement to any of them; and (2) articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals; and (3) articles (other than food) intended to affect the structure or any function of the body of man or other animals; and (4) articles intended for use as a component of any article specified in clause (1), (2), or (3); but does not include devices or their components, parts, or accessories. (d)

Device The term “device” (except when used in subsection (a) of this section) means an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, which is— (1) recognized in the official National Formulary, or the United States Pharmacopeia, or any supplement to them, (2) intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or (3) intended to affect the structure or any function of the body of man or other animals, and which does not achieve any of its principal intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its principal intended purposes. (e) Cosmetic The term “cosmetic” means (1) articles to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof intended for cleansing, beautifying, promoting attractiveness, or altering the appearance, and (2) articles intended for use as a component of any such article; except that such term shall not include soap. (f)

Oleomargarine or margarine For the purposes of this section and section 347 of title 21, the term “oleomargarine” or “margarine” includes— (1) all substances, mixtures, and compounds known as oleomargarine or margarine; (2) all substances, mixtures, and compounds which have a consistence similar to that of butter and which contain any edible oils or fats other than milk fat if made in imitation or semblance of butter.

Dissatisfaction with the common-law remedies for deceptive advertising led to the widespread enactment of state statutes providing individuals and businesses with a private right of action for the consumer-aimed deceptive practices of other businesses. In Texas, the Deceptive Trade Practices Act (DTPA) empowers consumers to fight against such advertising. The Texas DTPA's underlying purpose is to protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty, and to provide efficient and economical procedures to secure such protection. A consumer may qualify as a plaintiff if he/she/it is an individual, partnership, corporation, the State of Texas, or a subdivision or agency of the State of Texas, who seeks or acquires by purchase or lease, any goods or services. The term consumer doesn't include a business consumer that has assets of $25 million or more, or that is owned or controlled by a corporation or entity with assets of $25 million or more.

The DTPA provides a list of conduct exempt from the provisions of the Act. The Act does not apply to newspapers that publish advertisements without knowledge of the false, misleading, or deceptive nature of the publication. Nothing in the Act applies to an act or practice authorized by specific rules or regulations of the Federal Trade Commission. Moreover, the Act does not apply to a claim for damages based on rendering of a profession service, the essence of which is the providing of advice, judgment, opinion, or similar professional skill. In addition, the exemption in certain cases will cover personal injury claims, written transactions involving more than $100,000, or any transaction consisting of more than $500,000.

Exceptions to the aforementioned professional service exemption include (a) an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion, (b) a failure to disclose information in violation of Section 17.46(b)(23) of the Act, (c) an unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion, or (d) a breach of an express warranty that cannot be characterized as advice, judgment, or opinion.

There are four claims under the DTPA. Section 17.50(a) of the Act provides that a consumer may maintain an action where any of the following constitute a producing cause of economic damages or damages for mental anguish:

The use or employment by any person of a false, misleading, or deceptive act or practice that is part of what is considered a laundry list, and relied on by a consumer to the consumer's detriment;

a breach of an express or implied warranty;

any unconscionable action or course of action by any person; or

the use or employment by any person of an act or practice in violation of the Texas Insurance Code.

Consumer Law in Texas applies to debt collection problems, and other such issues that potential clients may face, including business opportunities, contests and giveaways, health spas, home solicitations, the removal of an unauthorized vehicle from a parking facility, rental-purchase agreements, notaries pretending to be attorneys, mobile home sales, credit repair companies, unfair settlement claims, new lemon cars, timeshares, and the regulation of telephone solicitation.




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