It is not legal or ethical to engage in false or misleading advertising for selling products or services. This is especially true when the advertising harms consumers or competitors in violation of state or federal laws.
A business that uses misleading words for the sale of a product or service can be sanctioned by state or federal agencies. The use of keywords like healthy, organic, gluten free, or 100% natural can be deceptive. The usage of false scientific support claims or endorsements may be unethical. The posting of a false or deceptive picture or video can be against the law. There have been instances where the advertiser used a false or misleading color to make its product look different. Also, there have been instances where the advertiser made a false claim that its product contained a certain product or it had clinically proven health benefits to enhance sales.
A business that engages in deceptive pricing by hiding true fees or surcharges can be sanctioned by state or federal agencies. In most cases, the consumers are misled by not knowing the true price of the product or service – e.g., a communication service provider hides the cell phone bill’s real charges from the consumer when signing up for service.
A business that engages in false or deceptive product measurements can be sanctioned by state or federal agencies. This type of illegal activity can take place when a technology company sells a computer’s hard drive by hiding its true capacity. In other words, the product manufacturer does not disclose the real size of the hard drive to mislead the consumer.
A business that engages in deceptive comparison of its products or services with another competitor can be sanctioned by state or federal agencies. There have been instances where competitors have filed lawsuits against each other for using false or misleading catchphrases.
A business that engages in deceptive warranties or guaranties can be sanctioned by state or federal agencies. This type of violation is usually related to a contract that was signed by the parties so it’s important to speak with a business attorney who understands the applicable laws. It’s also important to read the entire contract before purchasing the product or service.
There are several rules and regulations that could be applied to false or misleading advertising. For example, the Lanham Act which is codified under 15 U.S.C. §§ 1051, et seq. is applicable. This federal statute provides for various protections against trademark violation. The aggrieved party must prove the following elements to overcome the burden of proof: (1) plaintiff has a valid and legally protectable mark; (2) plaintiff owns the mark; and (3) defendant’s use of the mark to identify goods or services causes a likelihood of confusion. See A&H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198 (3rd Cir. 2000). Moreover, California’s Business and Professions Code §§ 17500 is the parallel state law that regulates false or deceptive advertising. This provision states as follows: “It is unlawful for any person, firm, corporation or association, or any employee thereof with intent directly or indirectly to dispose of real or personal property or to perform services, professional or otherwise, or anything of any nature whatsoever or to induce the public to enter into any obligation relating thereto, to make or disseminate or cause to be made or disseminated before the public in this state, or to make or disseminate or cause to be made or disseminated from this state before the public in any state, in any newspaper or other publication, or any advertising device, or by public outcry or proclamation, or in any other manner or means whatever, including over the Internet, any statement, concerning that real or personal property or those services, professional or otherwise, or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, or for any person, firm, or corporation to so make or disseminate or cause to be so made or disseminated any such statement as part of a plan or scheme with the intent not to sell that personal property or those services, professional or otherwise, so advertised at the price stated therein, or as so advertised. Any violation of the provisions of this section is a misdemeanor punishable by imprisonment in the county jail not exceeding six months, or by a fine not exceeding two thousand five hundred dollars ($2,500), or by both that imprisonment and fine.”
Our law firm manages legal actions related to false and misleading advertising in state and federal courts. We are ready to assist our clients in matters related to online marketing and advertising rules and regulations. Please contact our law firm to speak with an internet attorney at your earliest convenience.