Corrective advertising is one of the most severe penalties that can be imposed on an advertiser that knowingly fabricates false or misleading selling points to misrepresent a product's qualities to the public. It requires that the company invest a specified amount of its ad budget to publish ads or air commercials that admit to potentially misleading messages and provide accurate, "corrective" information.
Corrective ads are intended to correct two possible injuries resulting from false or misleading claims. First, corrective statements are supposed to counteract long-term negative effects of inaccurate information that appeared in prior ads. The injured parties in such cases are presumed to be consumers, who may continue to hold false beliefs about a brand well after dissemination of the offending ads has stopped. The second possible type of injury corrective advertising is intended to redress is injury to a competitive brand, especially in cases of direct comparative ads. In such cases, corrective measures are intended to restore the injured brand to the level of sales and market share that existed before the false claims were published.
At the federal level, the Federal Trade Commission regulates advertising as part of its mission to protect consumers from unfair, deceptive or fraudulent practices.
When the FTC believes a violation has occurred, it first attempts to obtain voluntary compliance from the advertiser through a consent order. If a consent agreement cannot be reached, the commission issues an administrative complaint, and a formal proceeding before an administrative law judge usually follows.
Once the FTC determines that an ad is deceptive, it may require the advertiser to disseminate information to correct consumers' impressions of a product. The commission often specifies and evaluates the content of corrective statements and makes recommendations regarding the format in which the statements must appear.
Listerine and Doan's pills
In 1977, the FTC's challenge of Warner-Lambert Co.'s Listerine advertising set the precedent as the first litigated case of enforced corrective advertising. Until that time, corrective orders were issued as consent agreements. For 40 years, Listerine mouthwash had been advertised as having germ-killing properties that prevented and cured colds and sore throats. The FTC found such claims to be false. Furthermore, it was determined that consumers' false perceptions of Listerine as a cure for colds were the result of such advertising.
The FTC ordered Warner-Lambert to cease and desist from making such claims in all future advertising and to spend $10 million on a corrective campaign over a period of 18 months. The FTC even specified the language of the corrective disclosure to be included in the Listerine ads, which stated, "Listerine will not help prevent colds or sore throats or lessen their severity."
In its ruling against Warner-Lambert, the commission elucidated the elements necessary to trigger corrective advertising as a remedy. First, the advertising must be deceptive; second, the ad must have played a substantial role in creating or reinforcing a false and material belief in the mind of consumers. Finally, corrective remedies, the ruling stated, are justified if, even after the false advertising has ceased, the false belief lingers in the mind of consumers, affecting competition by its influence on consumer purchasing decisions.
Since 1977, the FTC has required corrective advertising in only one other case. In 1999, the agency required Novartis, marketer of Doan's pills, to mount an $8 million corrective ad campaign to correct consumers' misbeliefs that Doan's was superior to all other analgesics in relieving back pain. According to the FTC, Novartis had no scientific evidence to make such a claim.
Doan's had been advertised as a remedy for back pain since its introduction to the market more than 90 years earlier. Some of the claims used in Doan's ads included: "Doan's is made for back pain relief with an ingredient [other] pain relievers don't have. Doan's makes pain go away . . . . the back specialist"; "If nothing seems to help, try Doan's. It relieves back pain no matter where it hurts. Doan's has an ingredient these pain relievers don't have"; and "Back pain is different. Why use these pain relievers? Doan's is just for back pain."
The FTC order specifically required that the packaging and advertising for Doan's include, clearly and conspicuously, the phrase, "Although Doan's is an effective pain reliever, there is no evidence that Doan's is more effective than other pain relievers for back pain." The FTC ordered that the statement be disseminated for a period of one year.
The Lanham Trademark Act
Advertisers that are damaged or are likely to be damaged by false representations made by a competitor can bring suit under Section 43 (a) of the Lanham Trademark Act. Before 1989, the wording of Section 43 (a) stated that potential damage to a plaintiff could be claimed only when a false representation was made about the defendant's goods or services. The revised wording allowed action to be taken against an advertiser that makes false claims about its own product and/or the plaintiff's products.
Thus, to prevail in a case of false advertising under Section 43 (a), the plaintiff first must prove that the defendant made a false or misleading statement regarding its own products. Specifically, the plaintiff must demonstrate that the ad is either literally false, or if literally true is likely to mislead or confuse a substantial portion of the intended audience. The plaintiff must also demonstrate damages or their likelihood. This can be accomplished by showing that sales have been diverted from the plaintiff to the defendant or by showing a corresponding loss of market share. A loss of goodwill toward the plaintiff or the plaintiffs' product also constitutes damages.
Corrective advertising may be requested by the plaintiff to counter consumers' false perceptions when these can be attributed to the competitors' advertising. In fact, most litigants seek corrective remedies under Section 43 (a). The courts may grant corrective advertising as part of the damages awarded to the plaintiff, who then receives the necessary funds to disseminate corrective messages to counteract the false beliefs or confusion created by the offending ad. On the other hand, the courts may order the defendants to design and implement the corrective campaigns, for which they assume all costs.
In some instances both parties may be required to disseminate corrective messages. In Alpo Petfoods Inc. v. Ralston Purina Co. (1989), the court ordered both the plaintiff and the defendant to distribute corrective materials to veterinarians, dog breeders and dog owners to correct the lingering false impression left by the companies' advertising.