Question

The Federal Trade Commission (FTC) ordered Warner-Lambert to cease and desist from advertising that its product, Listerine antiseptic mouthwash, prevents, cures, or alleviates the common cold and sore throats. The order further required Warner-Lambert to disclose in future advertisements that “[c]ontrary to prior advertising, Listerine will not help prevent colds or sore throats or lessen their severity.” Warner-Lambert contended that even if its past advertising claims were false, the corrective advertising portion of the order exceeded the FTC’s statutory powers. The FTC claimed that corrective advertising was necessary in light of Warner-Lambert’s one hundred years of false claims and the resulting persistence of erroneous consumer beliefs. Explain whether the FTC is correct.

Answer 1

Case study solution :

Issue :

The Federal Trade Commission (FTC) ordered Warner-Lambert to cease and desist from advertising that its product, Listerine antiseptic mouthwash, prevents, cures, or alleviates the common cold and sore throats. The order further required Warner-Lambert to disclose in future advertisements that contrary to prior advertising, Listerine will not help prevent colds or sore throats or lessen their severity. Warner-Lambert contended that even if its past advertising claims were false, the corrective advertising portion of the order exceeded the FTC’s statutory powers. The FTC claimed that corrective advertising was necessary in light of Warner-Lambert’s one hundred years of false claims and the resulting persistence of erroneous consumer beliefs.

Explanation :

FTC POWER To ORDER CORRECTIVE ADVERTISING

The idea that the Federal Trade Commission can require a violator to make some certifiable move later on is a stage past express approval of restraining orders. In any case, acknowledgment of the Warner-Lambert lion's share's perspective that certifiable requests in both the antitrust and misleading promoting settings are inside the ambit of segment 5 doesn't consequently prompt the end that restorative publicizing orders are inside the Commission's forces.

As the Warner-Lambert court watched, the inquiry remains whether restorative publicizing is remembered for the class of positive solutions for which the Commission may look. The limits of this class are characterized regarding three unique

Federal Exchange Commission Improvement Act, and the main change,

The Commission's wide optional capacity to decide the suitable solution for right an infringement favors the view that it might go past a straightforward prohibitory request and may require the wrongdoer to make some positive move. By and by, on account of both the protected denial on the discipline of conduct not saw as illicit at the time of its event and the way that the main cure approved by the resolution is the restraining request, the passability of such agreed
orders isn't undeniable. Since Congress forced cutoff points on the FTC's medicinal position, the Commission's optional capacity to manage out of line
or on the other hand tricky strategic policies isn't of itself adequate to help an expansion of that capacity to positive alleviation. In this manner, the edge question in Warner-Lambert concerned whether the FTC has the authority under area 5 to give agreed requests when all is said in done," since remedial publicizing is a sort of confirmed cure. The greater part sentiment settled this issue for positive cures by dependence on the legal treatment of the Commission's antitrust cures." Because the antitrust cases hide nished huge help for the Warner-Lambert choice, a thought of those cases is fitting.

Conclusion :

In holding that the Federal Trade Commission has the position to arrange obligatory remedial publicizing, the United States Court of Appeals for the District of Columbia has looked past the exacting language of area 5 of the Federal Trade Commission Act. On account of the fair treatment issue innate in that'section's language, the Commission has been constrained to disallowing for the future those strategic approaches that it finds out of line or misleading. Be that as it may, the Commission has in the past been permitted to require the 'miscreant to make some positive move to address antitrust infringement and it appears to be coherent to stretch out this capacity to publicizing infringement.

Restorative publicizing is an allowable agreed cure under section 5 since it serves to forestall future misdirection through waiting incorrect convictions in the open psyche caused by past bogus promoting. Since the cure requires divulgence in actually honest commercials, it ought to not be seen as a class of the Commission's capacity to arrange positive revelation yet rather as a sensible expansion of that power. Such expansion is made fundamental by the way that conventional restraining orders can't manage the issue of remaining double dealing. Albeit remedial publicizing will be exposed to a closer legal examination than that given basic restraining orders before, the Warner-Lambert case estab-lishes restorative promoting as a significant new weapon for both the Federal Trade Commission and the customer. So FTO powers are beyond their statutory limits.