The historic development of modern US advertising regulation

Abstract

Purpose – The purpose of this article is to examine the US history of advertising regulation, both formal and informal and public and private – particularly focused on advertising that is likely to mislead consumers about attributes, characteristics or performance of advertised products. Design/methodology/approach – This research examines both primary sources such as legal challenges and contemporary writings as well as secondary sources. Findings – Although early court decisions were reluctant to find advertising to be dishonest, the Post Office was the first government agency to challenge blatantly false advertisements through criminal prosecution. At the end of the 1800s, the nascent advertising industry developed an interest in regulating truthfulness to enhance advertising credibility. It proposed a model state criminal code and advertising clubs, followed by local Better Business Bureaus, began to informally resolve advertising dispute. In 1914, the Federal Trade Commission (FTC) was established with authority to prevent unfair methods of competition which it used to challenge advertising that was likely to injure competitors. This authority was later expanded to cover advertising that was likely to mislead consumers regardless of competitive injury. The FTC experimented with trade association advertising provisions and expanding its concepts and tools overtime until a period of retrenchment in the 1980s that set the foundations of modern advertising regulation. Originality/value – This is the first treatment of advertising regulatory history that simultaneously covers and compares various sources of advertising regulation to develop a comprehensive exposition of advertising regulation history.