The breadth of FTC jurisdiction over advertising since Sperry and Hutchinson vs. FTC
M.A. (Master of Arts)
Department of Journalism
United States. Federal Trade Commission; Advertising--United States; Competition; Unfair--United States
The metamorphosis of Federal Trade Commission (FTC) jurisdictional boundaries has transformed the Commission from a mere watchdog of solely competitive interests into a full-fledged campaigner of consumer rights. This evolvement of FTC authority to protect public values has necessarily brought advertising within FTC control. Prior to 1972, Supreme Court decisions as well as legislative acts served to bolster the Commission's breadth of authority to intervene in practices that did not endanger competition, but rather the consumer. With this new dimension to Commission activity came Commission proscription of practices that were not false or deceptive, but were nevertheless unfair. The Supreme Court opinion in FTC v. Sperry and Hutchinson of 1972 reiterated approval of FTC discretion to act against unfairness, apart from deception. The case is most significant due to the High Court's directive bestowing upon the Commission the power to act as a court of equity in considering public values beyond those encompassed by antitrust law. This strong consumer orientation, based on unfairness principles, opened the door to greater FTC regulation of advertising. Applied to advertising, "unfairness," as a grounds for FTC action, is potentially limitless due to the obscurity of the meaning of "unfairness." In 1972 the FTC was on the threshold to intensified advertising control based on the S&H Court's expansion of FTC jurisdiction. A case-by-case analysis of FTC action since 1972 reveals that Supreme Court decisions, which provided First Amendment protection to advertising, curtailed FTC jurisdictional gains during the period. Though the FTC continued to proscribe false and deceptive commercial speech, reviewing courts heightened scrutiny of FTC attacks on truthful advertising which the Commission found to be unfair. Despite the promise inherent in the S&H holding, no significant expansion of the unfairness doctrine in regard to advertising has occurred since 1972. Normally, a lengthy discussion of future FTC advertising would be in order; however, political activity precludes such comment. Under the Reagan administration's budget cuts, the future of the FTC, as it appears in mid—1981, is bleak. Because consumer protection endeavors by the Commission might be nearly, if not completely, terminated, FTC regulation over advertising might succumb under the administration's proposal.
Boswell, Debra A., "The breadth of Federal Trade Commission jurisdiction over advertising since Sperry and Hutchinson v. FTC" (1981). Graduate Research Theses & Dissertations. 5345.
iv, 112 pages
Northern Illinois University
Rights Statement 2
NIU theses are protected by copyright. They may be viewed from Huskie Commons for any purpose, but reproduction or distribution in any format is prohibited without the written permission of the authors.