Edited by Geraint Howells, Iain Ramsay, Thomas Wihelmsson and David Kraft
Chapter 5: Misleading and Unfair Advertising
James P. Nehf* 1. Introduction When policy makers regulate advertising, the resulting laws generally take one of two forms, or some combination of both. Laws either set standards that prohibit misleading and unfair advertising in commerce generally, or they regulate certain sectors or marketing practices specifically. Regardless of the form of regulation, laws against misleading advertising are designed to help consumers make better informed decisions based on accurate information, which may result in more efficient market transactions. In some situations, a more interventionist approach is pursued, and regulators prohibit certain advertising practices that are deemed to be unfair, regardless of the accuracy of the information conveyed. Laws against unfair advertising further other public, health, environmental, or social policy goals by tightly regulating or banning the marketing of certain categories of products or services, even when they are not necessarily misleading. This chapter discusses the regulation of misleading and unfair advertising in consumer-targeted media. It first examines approaches to the regulation of advertising in general and provides an overview of basic standards for determining both misleading and unfair advertising. Section 3 addresses the regulation of advertising in five specific subject areas that lawmakers have targeted for special treatment in many countries. Subjects addressed include: comparative advertising, tobacco advertising, alcohol advertising, environmental claims, and advertising to children. The final section discusses three types of enforcement regime, which is a matter of paramount importance if the regulation of advertising is to achieve its objective of ensuring the dissemination of fair and accurate information:...
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