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Advertising Law Research Guide

Case Law

Even where the FTC determines through adjudication that a practice violates consumer protection or competition law, the FTC must still seek the aid of a court to obtain civil penalties or consumer redress for violations of its orders to cease and desist or trade regulation rules.  Section 13(b) of the FTC Act, 15 U.S.C. Sec. 53(b), authorizes the FTC to seek preliminary and permanent injunctions to remedy “any provision of law enforced by the Federal Trade Commission.” Whenever the FTC has “reason to believe” that any party “is violating, or is about to violate” a provision of law enforced by the FTC, the FTC may ask the district court to enjoin the allegedly unlawful conduct, pending completion of an FTC administrative proceeding to determine whether the conduct is unlawful. Further, “in proper cases,” the FTC may seek, and the court may grant, a permanent injunction.

Search the following key numbers and legal topic search to locate case law on: advertising, comparative advertising, commercial speech, false or deceptive claims, gambling and gaming, misappropriation of likeness, name, or celebrity status, right of publicity, and trademark dilution.

Administrative Materials

In the administrative process, the FTC determines in an adjudicative proceeding whether a practice violates the law.  When the FTC has “reason to believe” that a law violation has occurred, the FTC may issue a complaint setting forth its charges.  If the respondent elects to contest the charges, the complaint is adjudicated before an administrative law judge (“ALJ”) in a trial-type proceeding conducted under the FTC's Rules of Practice. The prosecution of a matter is conducted by FTC “complaint counsel,” who are staff from the relevant bureau or a regional office. Upon conclusion of the hearing, the ALJ issues an “initial decision” setting forth his or her findings of fact and conclusions of law, and recommending either entry of an order to cease and desist or dismissal of the complaint. Either complaint counsel or respondent, or both, may appeal the initial decision to the full Commission. In limited cases, including certain merger cases, the FTC’s rules provide that the appeal is automatic.

Upon appeal of an initial decision, the FTC receives briefs, holds oral argument, and thereafter issues its own final decision and order. The FTC’s final decision is appealable by any respondent against which an order is issued. The respondent may file a petition for review with any United States court of appeals within whose jurisdiction the respondent resides or carries on business or where the challenged practice was used. FTC Act Section 5(c), 15 U.S.C. Sec. 45(c). If the court of appeals affirms the FTC’s order, the court enters its own order of enforcement. The party losing in the court of appeals may seek review by the Supreme Court. FTC decisions and orders are available on this site.

Regulations

In addition to its authority to investigate law violations by individuals and businesses, the FTC also has federal rule-making authority to issue industry-wide regulations.  FTC rules -- including the Commission rules of organization, procedure, and practice -- are published in Title 16 of the Code of Federal Regulations.

The FTC’s semiannual Regulatory Agenda and annual Regulatory Plan can be found at www.reginfo.gov and www.regulations.gov. Each Agenda contains a Preamble, information about active rulemakings and updates to the ten-year review program of rules and guides. The Regulatory Plan sets out the FTC’s regulatory and deregulatory priorities for the year.

Government Regulation

The FTC is responsible for enforcing federal consumer protection laws, including the FTC Act, which prohibits ‘unfair or deceptive acts or practices’.  In addition, state attorneys general and local district attorneys enforce state and local consumer protection laws.  Many other different state and federal entities are also responsible for regulating and enforcing advertising law.

Some examples include:

Industry Self-Regulation

In addition to government regulation, many industry organizations also play a role in regulating the advertising industry through self-regulation.  For example, many trade organizations have rules of conduct for their members.  In advertising the major self-regulating body is the Better Business Bureau (BBB).  

BBB National Programs, Inc. (formerly known as the Advertising Self-Regulatory Council (ASRC)) administers and sets policies and procedures for the following programs: the National Advertising Division (NAD), the National Advertising Review Board (NARB), the Children's Advertising Review Unit (CARU), the Electronic Retailing Self-Regulation Program (ERSP), the Direct Selling Self-Regulatory Council (DSSRC) and  the Accountability Program (IBA).  

The NARB is the appellate body for advertising industry self-regulation. When an advertiser or challenger disagrees with an NAD or CARU recommendation, they may appeal the decision to the NARB for additional review.The NARB's recommendations are non-binding, however, in the spirit of self-regulation, almost all advertisers accept the NARB findings and recommendations. In the extremely rare instance of an advertiser’s unwillingness to accept the NARB recommendations, NAD/NARB Procedures call for a referral of the matter to an appropriate law-enforcement agency, like the FTC.

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