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Unethical Advertising in Today’s Society

Ashlea E. Alley

University of Indianapolis

The First Amendment protects the American people’s five fundamental freedoms:

religion, speech, press, peacefully assembly and petition. Although the First Amendment does

not directly mention commercial speech, how does it relate in the modern media industry? This

includes portraying false information, degrading competition, exaggerated claims or puffery,

containing obscene or defamatory material and certain depictions of children. After looking at

these topics in detail, unethical advertising will be considered unconstitutional by the First

Amendment.

Before exploring deeper into the commercial speech regulations and restrictions, it is

important to further understand the case surrounding advertising guidelines. In the Central

Hudson Gas & Electric Corporation v. Public Service Commission of New York case, the

question at hand is whether or not the Public Service Commission (PSC) ban on advertising

violated the freedom of speech protected by the First and Fourteenth Amendments. The New

York Commission had ordered to cease all advertising that promoted the use of electricity due to

a concern that demand would surpass supply (Boedecker, Morgan & Wright, 1995). The U.S.

Supreme Court overruled the decision from the multiple courts before and then the U.S. Court of

Appeals. In an 8-1-court opinion, the PSC ban was found to violate the right of commercial

speech due to lack of limited speech being ineffective. Under the four-part test:

A restraint on commercial "communication [that] is neither misleading nor related to

unlawful activity" is subject to an intermediate level of scrutiny, and suppression is

permitted whenever it "directly advances" a "substantial" governmental interest and is

"not more extensive than is necessary to serve that interest (U.S. 566 (1980)).

The official name for this four-part analysis is the Central Hudson Test. The first part of

the four-part test is asking “whether the advertising that is regulated is misleading and whether it
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concerns a legal product or service” (Hopkins, 153). If the answer is yes, it receives no First

Amendment protection. In the actual case itself, Central Hudson was not misleading or

containing an illegal activity. With that being said, the next question to ask is “whether the

asserted governmental interest is substantial” (Hopkins, 153). This is when the government sees

if it needs to step in to protect the health, safety, morals and aesthetics of the public. This is not

public interest; it is much more demanding which makes it governmental interest. In Central

Hudson, it did contain assertive governmental interest. The third step of the test asks, “whether

the regulation directly advances the asserted governmental interest” (Hopkins, 153). There must

be an instant and urgent connection between the commercial speech at hand. For example, in

Central Hudson, there was an immediate connection between advertising and the electric

company. A restraint on the speech would directly effect and advance the government’s interest.

The final question of the four-part test asks, “whether the regulation is ‘not more than necessary’

to serve the governmental interest” (Hopkins, 153). The final part of the Hudson Test is making

sure the case must be a “reasonable fit” for the government ends and whether or not the ad is

achieving those or not. For Central Hudson, the case failed this final part of the test. They found

it to be more extensive than necessary because of the banned ads for electric companies and

devices that were energy efficient.

Now that there is better and complete understanding of the Central Hudson case and the

four-part test to use to see if the commercial speech is protected, what is commercial speech?

Commercial speech is communication materials and or practices that have the sale of a product

or service as the goal. Importantly, government fails to have complete full reign over commercial

speech. “Truthful, non-deceptive advertising has been explicitly protected as ‘commercial’

speech under the free speech clause of the First Amendment since 1976” (Hoefges & Rivera-
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Sanchez). The government, however, can regulate speech using the Central Hudson test to decide

if it is unconstitutional. Regulations usually are allowed in order to prevent false advertising and

other unethical advertising practices, as will be discussed further (Boedecker, Morgan & Wright,

1995). Kathy R. Fitzpatrick asks the question facing many professionals in integrating

communications and advertising today, “Does the integration of public relations messages with

advertising and marketing messages alter First Amendment protection afforded corporate

expression?” (Fitzpatrick, 2005). Although this is a different aspect of commercial speech, it still

requires attention.

After looking at cases like Nike, Inc. v. Kasky, it is discovered that public relations

designed by the courts to provision marketing objectives, not always falls within the category of

commercial speech, even if a company intergrades its communication functions. Corporate

speech is still creditable for each company (Fitzpatrick 2005). In Nike, Inc. v. Kasky, Kasky sued

Nike, Inc. for mistreatment of their factory employees in Southeast Asia. Nike had started a PR

campaign by sending out press releases, writing letters to the editor and more to diminish the

assumption of the problem (Kaksy v. Nike). The California Supreme Court could not actually

make a final decision due to the jurisdiction. Justice Breyer argued “delay itself may inhibit the

exercise of constitutionally protected rights of free speech without making the issue significantly

easier to decide later on" (Kaksy v. Nike, Justice Breyer). The importance of this case is the strict

affiliation of non-marketing public relations messages… “With less protected forms of

commercial communication may increase the possibility for messages traditionally viewed as

political to be classified as commercial for regulatory purposes” (Fitzpatrick 2005).

The Central Hudson test plays a role from now on when understanding unethical

advertising and commercial speech. Ross. D. Petty describes misleading advertising as:
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Deceives or is likely to deceive persons to whom it is addressed or whom it reaches and

which by reason of its deceptive nature, is likely to affect their economic behavior or

which, for those reasons, injures or is likely to injure a competitor (Petty 1997).

The Federal Trade Commission and all 50 states regulate commercial expression, and all

have passed legislation targeted at preventing deceptive and unethical advertising practices

(Fitzpatrick, 2005). The FTC’s role in preventing unfair and deceptive advertising is mostly

nationally, while state and local government oversee smaller markets (Hopkins, 158). According

to the FTC:

When consumers see or hear an advertisement, whether it’s on the Internet, radio or

television, or anywhere else, federal law says that ad must be truthful, not misleading,

and, when appropriate, backed by scientific evidence. The Federal Trade Commission

enforces these truth-in-advertising laws, and it applies the same standards no matter

where an ad appears – in newspapers and magazines, online, in the mail, or on billboards

or buses.

There are a few conditions in order for an advertisement to be named deceptive. One

condition is whether the representation, omission or practice is likely to mislead a reasonable

consumer. The advertisement can mislead by expressive language or implication, where the ad

suggests product can do a certain thing or certain element. The FTC will give mindful

consideration to the intended audience of the advertisement, in order to better regulate the

standards (Hopkins, 162). Before mentioning cases relevant to deceptive advertising, there is

another redress for those facing harm from false or deceptive advertising, called The Lanham

Act. The Lanham Act is the federal trademark protection law, but also contains a section with

advertising standards. Section 43(a) of The U.S. Constitution reads:

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Any person who…in commercial advertising or promotion, misrepresents the nature,

characteristics, qualities, or geographic origin of his or her or another person’s goods,

services, or commercial activities, shall be liable in a civil action by any person who

believes that he or she is or is likely to be damaged by such act (15 USC § 1127).

The Lanham Act is focused on protection of commercial interest, so this act mostly

allows businesses or people to sue for competitive action from false advertising. The biggest

difference between the Lanham Act and the FTC’s standards is the Lanham Act requires injury.

The plaintiff must show signs of commercial injury from the perceived false advertising

(Hopkins, 159). According to the 2013 case, Lexmark International v. Static Control

Components, the test for false advertising is different than the other tests regarding trademarks.

Lexmark is a company that produces printers and tones. In 2002, Lexmark sued Static Control

Components for allegedly violating Lexmark’s intellectual property when it came to their

microchips used when repairing toner cartridges. SCC filed a counterclaim regarding that

Lexmark violated the Lanham Act by enticing false advertising.

The Sixth Circuit relied on the "reasonable interest" test to establish standing under the

Lantham Act, but unlike its sister circuits, did not use the AGC Factors, which use the

same standards as those to establish an antitrust claim. Under this test, a claimant must

demonstrate 1) a reasonable interest against the alleged false advertising and 2) a

reasonable basis for believing that the alleged false advertising will damage that interest

(Oyez).

The final decision of the Supreme Court was that since the language of false advertising

claim was too broad, a determination of standing to sue would be based on proof of plaintiffs’

interest fall protected by the law. The statute was the proximate cause of the injury in question.
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To prove interest of the Lanham Act, the plaintiffs must prove they have commercial interest in

reputation or sales. The plaintiff also must show injury stemmed directly from the Lexmark

“false advertising,” claim. “In this case, Static Control Component's claim satisfied both the zone

of interest and proximate cause requirements to pursue a claim under the Lanham Act” (Oyez).

Another aspect important to note is the FTC’s requirement of prior substantiation on

advertising claims. “Advertisers must be able to substantiate the explicit and implied statements

in ads that make objective claims about products and services before the claims are

made…Without [reasonable] basis, companies are deemed to have violated Section 5 of the FTC

Act” (Hopkins, 159).

Although deceptive advertising is the most familiar form of unethical advertising, there

are many other cases where exaggerated claims are used as well. A good example of this is the

2010 FTC lawsuit against the Dannon Company Inc. Dannon claimed their yogurt prevented the

cold or flu due to the product’s probiotics (Hopkins, 160). According to a FTC press release,

former Chairman Jon Leibowitz, says “These types of misleading claims are enough to give

consumers indigestion. Consumers want, and are entitled to, accurate information when it comes

to their health. Companies like Dannon shouldn’t exaggerate the strength of scientific support for

their products” (FTC, 2010). The settlement ended in Dannon agreeing to stop the exaggerated

claims unless it was said or printed that the drink must be consumed three times a day.

Exaggerated claims are often called puffery. Most puffery claims are those that use the

phrases, “world’s best” or “Indiana’s favorite.” Most of the puffery and exaggerated claims are

not deemed deceptive by the FTC, but if the claims deal with an expert, celebrities or ordinary

people, they are regulated due to the more weight they hold in the public eye (Hopkins, 160).

Although the FTC can regulate these types of claims, they tend to have positive effects with their
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audiences. According to researcher Sang Yeal Lee, advertisers would not use puffery expressions

as much as they do if they were not effective. “The results of this research showed that puffery

claims can indeed be effective, affecting consumers’ attitudes and intentions…. It may be true

that many puffery expressions are just hyperbolic claims that consumers would not seriously

consider as truthful, factual information” (Lee, 2014).

Another form of advertising that is regulated by the FTC is comparative advertising.

Comparative advertising is when two companies or products convey information about its

service by measuring them against each other. According to the case law and the regulatory

pronouncements by the FTC, it’s not only allowed but it’s encouraged (Lieberstein & Lockerby,

2016). A 2009 comparative ad campaign between AT&T and Verizon deliberately measured

them against each other. Verizon displayed an ad called, “There’s a Map for that,” that compares

Verizon against AT&T for 3G networks. The Verizon map is more covered whereas the AT&T

map is relatively bare. AT&T took action on this claiming that Verizon’s ad was misleading and

false because AT&T did indeed have network in the bare areas, just not 3G network (AdAge,

2009). Verizon spokesperson argued that the commercial is labeled with clearly stated wording

regarding the claim and that no real false claims were in fact made. If AT&T said it was losing

market share as a result of the ad, it would be a different story (AdAge, 2009). Comparative

advertising is a significant and overall an essential component in the marketplace, according to

Lieberstein and Lockerby. “Fair, truthful comparative advertising benefits consumers and

arguably increases the quality of goods and services. To minimize the risk of liability, however,

comparative advertising must avoid any likelihood of confusion, must be accurate, and must be

backed by substantial evidence” (Lieberstein & Lockerby).

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Shifting into the next form of unethical advertising is the use of obscene or defamatory

materials in commercial speech. Sex has been a part of advertising since early woodcarvings and

illustrations of women naked from the hips up. Sex in advertisements has been a motivator in ad

sales and distribution. Although sex appeal in advertisements can sometimes make sense,

sometimes it seems completely out of the ordinary like the example with the Dallas Opera

highlighting their more sensual acts in order to entice guests to attend shows (Reichert, 2002).

“Regardless of sex in advertising, sexual information can be associated to greater or lesser

degrees with the advertiser’s persuasive appeal” (Reichert, 2002).

Reichert goes in detail about five of the various forms of sexual appeal in advertisements.

They are body display, sexual behavior, contextual factors, sexual referents, and sexual embeds

and symbolism. Body display is more of the nudity factors in advertisements, which is the most

common practice (Reichert, 2002). Sexual behavior can mean anything from kissing, sensual eye

contact or even sounds. Contextual factors are not so obvious where body display and sexual

behavior are. Contextual factors can be seen for romantic getaway ads on a cruise or bedroom

background. Lighting and angles also play a large role in contextual factors (Reichert, 2002).

Sexual referents are different to contextual factors by the way of mixed sexual innuendos and

verbal and visual elements. An example of this is with Brooke Shields’ advertisement for Calvin

Klein:

’You want to know what comes between me and my Calvins? Nothing.’ Framed with a

camera shot that took 13 seconds to slowly move along the length of her leg and up to her

inseam before including her face, Shields' question had an unmistakable sexual meaning

in the 30-second commercial (Reichert, 2002).

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Sexual embeds and symbolism is a hidden sexual references in irregular figures, such a

rocks, cones, key inserted in a lock. It is still unsure if sexual embeds cause imperial effects on

consumer (Reichert, 2002). When it comes to consumer speech and advertising, much speech is

questionable when deciding what is deemed offensive or not. According to the 1973 Miller v.

California case, the First Amendment does not protect obscene materials. Marvin Miller, a

California owner of a business that distributed pornographic books and films, mailed advertising

material showing obscene material from his products at his store to promote them. Once a

neighbor receives this mailing, they called the police and eventually the state took Miler to court

for such materials. The court decided against Miller but they modified the test for obscenity. The

three parts are: whether the average person, applying contemporary community standards, would

find that the work as a whole appeals to the prurient interest; whether the work depicts or

describes sexual conduct or excretory functions, as defined by state law, in an offensive way; and

whether the work as a whole lacks serious literary, artistic, political, or scientific value. If all

parts of this test are satisfied, then the speech can be a criminal act and rise as obscene material

(Supreme Justia). Today, sex can almost always be seen in advertisements. Although they have

limitations mentioned from Reichert, it can still be regulated using the test from the Miller v.

California case.

The final piece of unethical advertising mentioned is advertising with the use of children

and directed at children. The American Psychological Association mentions two trends of

advertising regarding children; the growth in advertising channels and privatization of children’s

media use. Dale Kunkel, PhD, senior author of the task force’s report comments on the

privatization. "They (children) don't see the exaggeration or the bias that underlies the claims (in

advertisements)…. To young children, advertising is just as credible as Dan Rather reading the
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evening news is to an adult” (Dittmann, 2004). These two recent trends come with new statistics

concerning advertising spending on children at $12 billion a year. Although the parents of the

household mostly do the purchasing, the preference and influence to products come well

regarded from the children targeted (APA, 2004). The first step in understanding children and the

effect of advertising is to simply see if the child can differentiate between commercial speech

and noncommercial speech. The next must be able to recognize advertising’s persuasive intent

and determine “selling messages.” Statistically speaking, once the children reaches about age

eight, they tend to understand that the purpose of the advertisement is to sell something, and in

that case they tend to resist it’s appeal (Moore, 2004).

The more recent transformation between advertisements has been their entertainment

roles. For example, the creative, imaginative and use of brand characters in television ads and in

publications with editorial content, coloring pages and puzzles. The entertainment role even

exists with online advertisements. This is where we see the “advergames,” where the ad looks

similar to a game to peak attention. “More broadly, the web has the potential to deliver a brand

message in such a way that consumers will interpret it more like information obtained from their

own direct experience with a product, than as an advertisement” (Moore, 2004).

Many thoughts and studies surround the question rather child advertising toward food

choices has correlation between childhood obesity. An Australian study from Elizbaeth

Handsley, Christopher Nehmy, Kaye Mehta and John Coveney found that:

Confectionery advertisements were three times more likely to be broadcast during

children's programs than during adult programs and fast food restaurants were twice as

likely to be advertised during children's programs, with fruit and vegetables being the

least advertised food (Handsley et al, 2014).

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The findings from this study suggest that unhealthy foods are far more likely to be

advertised to children rather than others. In conclusion to the advertising field with children, it is

seen from multiple sources and outlets that children are in harm of advertisements whether to

their health or later. Handlsey et al also argue that this form of advertising to children should be

seen as a form of economic exploitation of children (Handlsey et al, 2014).

After researching the many aspects that go in part with the term “unethical advertising,”

it is important to revisit the First Amendment freedoms: religion, speech, press, peacefully

assembly and petition. The First Amendment makes no direct mention of commercial speech, but

throughout this paper, an uncovering of each occurred, such as: portraying false information,

degrading competition, exaggerated claims or puffery, containing obscene or defamatory

material and certain depictions of children. Each form of unethical advertising has been defined

and researched in detail, along with information from cases, using different tests, regulations and

outlets. After finalizing the argument as mentioned in each section and topic, unethical

advertising is to be considered unconstitutional by the First Amendment.

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