Will Increase Emphasis of Self Regulation, Media Screening and New Remedies
Federal Trade Commission Chairman Robert Pitofsky told a group of advertising executives today that, while the agency's advertising enforcement program generally is moving in the right direction, he will encourage expanded media screening of ads and be more aggressive in ensuring the Commission uses all the remedies available to it -- from cease and desist orders to corrective notices and other forms of consumer education, to redress and civil penalties, to corrective advertising where appropriate. The agency also will continue its record of strong enforcement against false and deceptive claims, he said. Pitofsky said future adjustments may be necessary to reflect changing conditions in the marketplace -- including technological changes such as the growth of the Internet as a marketing medium, and the globalization of consumer protection issues.
Pitofsky delivered his remarks at the American Advertising Federation's annual Government Affairs Conference in Washington today.
The FTC will continue its largely case-by-case approach to advertising enforcement, focusing on health and safety issues and cases that involve serious dollar losses, Pitofsky said. He pointed to recent FTC cases targeting nutritional and environmental claims as examples. He also pointed to the FTC's success in the regulatory reform area, citing a 25 percent reduction in the agency's industry guides and rules, stating that this reflects the FTC's responsibility to ensure that government works better and costs less. Some traditional approaches should be revisited, such as the FTC's view of "Made in USA" claims in advertising, Pitofsky said, but other programs are working well, such as the FTC's guidelines for claims about the effect of products on the environment.
Pitofsky heralded the advertising industry's self-regulation program as a model of effectiveness, and noted the FTC's recent endorsement of programs in the medical insurance and funeral industries to boost compliance with FTC-enforced regulations. He called on the media to expand advertising screening programs, such as those of the major networks, to other forms of media, broadcast, electronic and print, to prevent ads with facially implausible claims from continuing to "slip through the cracks." Toward that end, he said, the FTC had in some recent cases identified by the name the media in which challenged advertising ran.
Reducing consumer fraud also remains an important FTC goal, but being successful depends on doing "a better job of inoculating consumers against frauds in the first place," Pitofsky said. He commended the AAF for taking a leadership role in the FTC's Partnership for Consumer Education, an industry/government initiative to capitalize on the expertise of industry in reaching consumers with an effective message.
As to remedies, Pitofsky cited several cases exemplifying the Commission's use of a broader range of consumer education and financial remedies, and said he believes the Commission should consider corrective advertising in appropriate cases.
Chairman Pitofsky's remarks reflect his own views and not necessarily those of the Commission or any individual Commissioner.
Copies of his remarks are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. FTC news releases and other documents also are available on the Internet at the FTC's World Wide Web site at http://www.ftc.gov