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False advertising or deceptive advertising is the use of false or misleading statements in advertising. As advertising has the potential to persuade people into commercial transactions that they might otherwise avoid, many governments around the world use regulations to control false, deceptive or misleading advertising.
California law Edit
In California, a claim for false advertising requires proof that the defendant, in connection with the sale of a product or service, made an untrue or misleading statement regarding the product or service. Under California Business & Professions Code §17500, a statement can be true but still be misleading withing the meaning of the statute.
The standard to be applied in assessing whether a statement is false or misleading within the meaning of California Business & Professions Code §§17200 and 17500 is whether it is "likely to deceive" the consumer. To determine whether a statement is likely to deceive, the court is to use a "reasonable consumer" standard, i.e., "that it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled." A clearly disclosed term or practice is not likely to deceive a consumer. Whether a business practice constitutes a breach of contract is a separate inquiry from whether the practice violates Unfair Competition Law. In other words, even if a practice does not breach the express terms of a contract between the parties, it may still be actionable as a misleading business practice.
Federal Trade Commission Edit
An advertisement is deceptive if it contains a statement — or omits information — that is likely to mislead consumers acting reasonably under the circumstances and is "material" or important to a consumer's decision to buy or use the product. A statement also may be deceptive if the advertiser does not have a reasonable basis to support the claim.
- ↑ Cal. Bus. & Prof. C. §17500; Nagel v. Twin Labs., Inc., 109 Cal.App.4th 39, 51, 134 Cal.Rptr.2d 420 (2003) (full-text).
- ↑ Id. (citing Day v. AT&T Corp., 63 Cal.App.4th 325, 332-33, 74 Cal.Rptr.2d 55 (1998) (full-text)).
- ↑ See Lavie v. Procter & Gamble Co., 105 Cal.App.4th 496, 507-08, 129 Cal.Rptr.2d 486 (2003) (full-text).
- ↑ Id. at 508, 129 Cal.Rptr.2d 486.
- ↑ Wayne v. Staples, Inc., 135 Cal.App.4th 466, 483-84, 37 Cal.Rptr.3d 544 (2006) (full-text).
- ↑ R&B Auto Center, Inc. v. Farmers Group, Inc., 140 Cal.App.4th 327, 356, 44 Cal.Rptr.3d 426 (2006) (full-text).
- ↑ Id.
- ↑ See "FTC Policy Statement on Deception," appended to Cliffdale Associates, Inc., 103 F.T.C. 110, 174 (1984). ("Deception Policy Statement").
- ↑ See "FTC Policy Statement on Advertising Substantiation," appended to Thompson Medical Co., 104 F.T.C. 648, 839 (1984), affd, Thomas Medical Co. v. FTC, 791 F.2d 189 (D.C. Cir. 1986) (full-text), cert. denied, 479 U.S. 1086 (1987).
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