False Advertising Law & Legal Definition

Advertising is the act or practice of attracting public notice and attention. It includes all forms of public announcement that are intended to aid directly or indirectly in the furtherance or promulgation of an idea, or in directing attention to a business, commodity, service or entertainment.

Advertising as a business may be subject to reasonable regulations, but since it is neither inherently dangerous nor a nuisance per se, it cannot be prohibited. The right to engage in any lawful private business or occupation includes the right to advertise it, and this right to advertise one's commodities or services is a valuable property right. Regulations exist governing deceptive or unfair advertising, trademark infringement, unfair competition, and use of endorsements.

Many states have laws against false advertising, which vary by state. The main federal laws governing false advertising are the Federal Trade Commission (FTC) Act and the Lanham Act. Under the FTC Act, false advertising includes advertisements that make representations that the advertiser has no reasonable basis to believe, even if the representations turn out to be true. Only the Federal Trade Commission can enforce the FTC Act.

Private parties, such as consumers or competitors, can file a complaint for false advertising under the Lanham Act. To establish a violation under the Lanham Act, consumers and competitors must prove the following: (1) the advertiser made false statements of fact about its product; (2) the false advertisements actually deceived or had the capacity to deceive a substantial segment of the target population; (3) the deception was material; (4) the falsely advertised product was sold in interstate commerce; and (5) the party bringing the lawsuit (plaintiff) was injured as a result of the deception. Injury is construed as a likelihood of injury, rather than actual injury.