LEXSEE 32 F

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In the Matter of ADOPTION OF STANDARDS DESIGNED TO ELIMINATE DECEPTIVE ADVERTISING FROM TELEVISION (PETITION OF TUBE (TERMINATION OF UNFAIR BROADCASTING EXCESSES))

RM-1553

FEDERAL COMMUNICATIONS COMMISSION

32 F.C.C.2d 360

RELEASE-NUMBER: FCC 71-1099

November 1, 1971 Released

Adopted October 26, 1971

JUDGES:

BY THE COMMISSION: COMMISSIONER JOHNSON DISSENTING AND ISSUING A STATEMENT; COMMISSIONER REID NOT PARTICIPATING.

OPINION:

[*360] 1. This matter involves the problem of preventing deceptive advertising on broadcast stations, particularly television stations, raised in a petition for rule making filed by a group of law students called Termination of Unfair Broadcasting Excesses, or TUBE. The petition was filed on January 13, 1970, and supplemented, particularly with respect to more specific actions requested, on April 6, 1970. It was supported in letters from Consumers Union and others, and some Congressional interest has been expressed. No opposing statements were filed. n1

n1 The TUBE petition deals entirely with television. The problem is not, of course, confined to this medium but may also exist in radio. Past and future Commission actions and pronouncements in this field of course relate to both media. However, there are differences, including the probably significantly greater impact of television, and the fact that radio advertising is a much less centralized type of operation, likely presenting different regulatory problems. Therefore, our present consideration relates primarily to television, the medium dealt with in the petition.

2. The TUBE petition is discussed at some length below, including specific discussion of the 20 examples of TV advertising, allegedly presented and allegedly deceptive for the reasons stated in the TUBE comments on the examples. n2 We note that in substantial part the petition is premised on the alleged inadequacy of regulation by other Government agencies, chiefly the Federal Trade Commission (FTC), and of industry "self regulation" (e.g., by the National Association of Broadcasters (NAB)). We do not necessarily agree, by any means, with the opinion expressed in the petition as to the efforts of these other agencies. The TUBE petition, however, does represent a thoughtful contribution in this important public-interest area.

n2 In summarizing TUBE's examples and comments on them in some detail, we do not, of course, determine that the advertising was in fact run in exactly this form, or, if it once was, is now being so presented. Also, of course, we are not necessarily adopting TUBE's characterizations and evaluations of it. However, it is necessary to set forth the material in some detail in order to evaluate the general arguments which are based on it.

3. TUBE's original request was that the Commission adopt as part of its rules a "Code of Standards" concerning television advertising, which was appended to its petition. This is discussed in para. 14, below. [*361] Some of the ideas set forth are obviously pertinent, and will be contained in a new Public Notice which we intend to issue shortly. Other ideas expressed, such as "courtesy and good taste", might raise further questions, at least if they were embodied in a rule.

4. It is also appropriate, as a preliminary matter, to call attention to this Commission's own efforts in this area at the present time. In a number of pronouncements, including the 1960 Program Policy Statement, n3 the Commission has emphasized the licensee's obligation to avoid the presentation of deceptive advertising on radio and television. In the Statement mentioned, it was said:

n3 Report and Statement of Policy re: Commission En Banc Programming Inquiry, July 27, 1960, 25 F.R. 7291, 20 Pike & Fischer R.R. 1901.

Broadcasting licensees must assume responsibility for all material which is broadcast through their facilities. This includes all programs and advertising material which they present to the public. With respect to advertising material the licensee has the additional responsibility to take all reasonable measures to eliminate any false, misleading, or deceptive matter and to avoid abuses with respect to the total amount of time devoted to advertising continuity as well as the frequency with which regular programs are interrupted for advertising messages. This duty is personal to the licensee and may not be delegated.

5. This Commission operates closely with the FTC in this area, under the terms of an arrangement announced in a Public Notice adopted November 7, 1961. As stated therein, television and radio broadcast licensees have regularly been sent copies of the FTC's "Advertising Alert", or similar material, dealing with broadcast advertising and describing complaints issued by the FTC, and later final Orders, concerning false and misleading advertising which has been presented on broadcast stations. The Public Notice points out the licensee's obligation: he should exercise particular care with respect to accepting and presenting material which has been the subject of an FTC complaint, even though this is not a final FTC determination as to the propriety of the material. After on FTC Order, if a broadcaster presents advertising which is known to have been the subject of such Order, serious questions would be raised as to the adequacy of the measures instituted and carried out by the licensee in the fulfillment of his responsibility, and as to his operation in the public interest.

The Public Notice also pointed out the licensee's obligation to review advertising copy submitted for broadcast, and also to take reasonable steps to satisfy himself as to the reputation and reliability of every prospective advertiser and his ability to fulfill the promises made in his broadcast message. It was stated that the fact that a product or advertisement has not been the subject of FTC action in no way lessens the licensee's responsibility. Rather, it is hoped that the dissemination to broadcasters of FTC releases will alert them to questionable claims, guarantees, etc., and if they deem particular material unsuitable, to call it to the FTC's attention for investigation.

6. Under the FCC-FTC arrangement, complaints to this Commission of deceptive advertising are handled by us if they involve only local matters. Where the advertising is national, the matter is referred to the FTC. The practice of the FCC's sending FTC material to licensees [*362] was suspended in November 1970, at the FTC's request in connection with revision of its publications. However, many broadcasters receive material directly from the FTC.

THE TUBE PETITION

7. The lengthy TUBE petition is divided into seven parts: (1) The Impact of Television; (2) The Harm Caused by Deceptive Advertisements; (3) The Failure of the Federal Trade Commission; (4) The Inadequacy of Self-Policing; (5) The Responsibility of the FCC to Regulate; (6) The Constitutionality of FCC Standards; (7) A Discussion of the Proposed Code of Standards. In the first section, TUBE discusses the tremendous impact of television as a source of impression and information; its widespread use for instruction is noted, and it is stated that TV actually drugs the viewer into a state of passive reception, in which he is susceptible to any form of information received from TV. n4 The power of the medium for advertising is also discussed, including the assertion that its effectiveness has been made even greater by new sophistication in the science of motivation. It is said that, for example, inconsistency is used as a form of stimulation to create uncertainty, which the viewer attempts to resolve by trying to find an answer, e.g., purchasing a new product claimed on TV to be better than the one he is now using. n5 It is said that as a consequence of this entire process, advertising is susceptible to excessive claims which, often, lead to deception, which is "the capacity or tendency to deceive the public", without actual deception having to be established. Montgomery Ward & Co. v. FTC, 379 F. 2d 666 (1967). The tendency to deceive, it is said, is greatest as to the least sophisticated viewers, which are those that regulation should protect. Exposition Press, Inc. v. FTC, 295 F. 2d 869 (1961). n6 It is also asserted that the more extravagant the claim, up to a point, the more successful the ad; if you repeat a claim loud, often and vigorously enough, the problem of disbelief will disappear.

n4 Many of the statements set forth herein as taken from the TUBE petition are in fact paraphrases there of the statements of writers in the field, cited in the petition, including social scientists, psychologists, marketing and advertising experts, and others.

n5 TUBE advances the following as an illustration: "A housewife has viewed three different ads for a detergent; the first states 'X detergent will get your wash clean'; in the second, a wash cleaned with Y is compared with another and it is stated 'Y gets wash cleaner'. The third shows the same comparison but it is stated that 'Z with bio-enzyme will get wash whiter than white -- bright!' The housewife is most stimulated by the most extravagant claim. Originally she thought that the brand she was using was adequate. Now she is told that Z is the best and this creates uncertainty. She resolves her conflict by purchasing brand Z to test the validity of the claims."

n6 TUBE also quotes a passage from our 1968 decision in National Broadcasting Company, Inc., FCC 68-597, 14 R.R. 2d 315, 316, to the effect that deception may result from statements which are not technically false or are perhaps even technically true, "since the only relevant consideration is the impact of the statements on the general public, including the ignorant, unthinking and the credulous." This case involved a contest on an NBC radio station, in which the prize money was said to be $1,000,000, whereas the chances of NBC's actually awarding that sum, or anything like it, were extremely remote. There were other misleading aspects.

8. Concerning the harm involved in deceptive advertising, the petition mentions the financial loss in purchasing a deceptively advertised product (possibly small each time, but large in the aggregate), inordinate gains to the manufacturers whose products are thus unfairly sold, and harm to health from undisclosed side effects and reliance on worthless remedies when effective treatment is needed. It is said [*363] that this most affects those who can least afford it, such as the poor (particularly inner-city residents, who are particularly susceptible to misleading claims of products seeming to identify with the "prosperous middle class"), and children (without the experience and judgment necessary to evaluate exaggerations), n7 their parents (who probably did not see the ad which has motivated the child), and others. It is said that deceptive advertising also is harmful in the industry, with one exaggerated claim requiring all competitors to imitate or exceed it in "snowball" fashion, and with consequently no basis on which the public can evaluate legitimate claims (e.g., the toothpaste area, where the superiority of the only brand with real cavity-preventing qualities was lost, from 1956 to 1960, amid a welter of other claims, some of them misleading). n8

n7 We do not here consider those aspects of TV commercials which relate only to children. This subject (as well as children's TV material generally) is under consideration in Docket 19142.

n8 According to the petition, this brand got only 12% of the market during this period; the leader, with 35% based its advertising on a claim that tests showed persons brushing with it after every meal having better teeth than those following their regular brushing habits. TUBE claims that this was misleading in that any toothpaste used after every meal would have led to similar improvement.

9. Assertions concerning the Federal Trade Commission. TUBE asserts that the FTC, the agency traditionally responsible for the prevention of deceptive advertising, has been ineffective. The petition refers to a Report by a Commission of the American Bar Association (September 1969) which was critical of the agency in some respects. TUBE asserts that the problems are "delay, ineffective sanctions, and the inability to reach those most responsible", i.e., the broadcast licensees whose stations carry the material. n9 It is pointed out that in most areas -- those other than foods, drugs, physical devices and cosmetics where it has authority to seek injunctive relief against false advertisements -- the Commission cannot proceed until a final decision, after a lengthy investigation followed by a formal complaint and then adjudicatory proceedings, has resulted in a cease and desist order. Thereafter, the manufacturer-respondent has appeal rights, and it is only after these have been exhausted that an advertisement can be barred from the airwaves. It is pointed out that in the well-known Carter Pills case, 13 years elapsed from the first cease-and-desist order until the final removal of the deceptive commercials from the air. There are no retroactive sanctions, merely prohibitions of the same conduct in the future, and, according to TUBE, the prohibition runs only against the same type of material found deceptive, not other [*364] types of deception. The same is said to be true of cease-and-desist "consent" orders, where the respondent does not insist on the adjudicatory formalities.

n9 TUBE's analysis in this respect is not entirely correct. Section 5 of the Federal Trade Commission Act (15 U.S.C. § 45), which is the basic legislative provision under which many FTC actions in the advertising area are brought, gives the FTC the power to prohibit unfair methods of competition and unfair or deceptive acts or practices in commerce. This does not contain any exemptions. The section referred to by TUBE, § 14(b) of the Act, is one of the sections added to the statute in 1938. The first of these, § 12 (15 U.S.C. § 52), deals specifically with false advertisements, declaring it unlawful to disseminate them in commerce. The second provides for the injunctive relief mentioned in the text in certain cases. The third, § 14, provides criminal penalties for the dissemination of advertisements prohibited by § 12, if the purchase or use thereof would be injurious to health or if dissemination was with intent to defraud or mislead. The second paragraph of this section, § 14(b), exempts from the criminal-penalty provision radio and television broadcasters, publishers, etc., except where they refuse to disclose the identity of the manufacturer, etc. responsible for the advertising. This is the restriction on the authority of the FTC over broadcasters to which TUBE refers, which is thus limited. However, in practice, the broadcast stations and print media used are seldom included in FTC complaints, though advertising agencies often are joined.

10. TUBE also refers to the FTC's difficulties in obtaining compliance, citing the product "Geritol". This was the subject of an FTC complaint in 1962 (after a three-year investigation), and of an Order in 1965, but (despite FTC pronouncements that the later commercials were no less objectionable), as of September 1969, "the commercials were still being televised."

n10 "Agencies don't get paid for sticking to principles. If a company wants to go haywire in its claims, the agency either goes along or loses the account. Agencies need the moral crutch of Uncle Sam's regulation to resist the pressure of clients in this Darwinian jungle." Max Geller, "Madison Avenue v. the FTC", Time, February 2, 1962, p. 61, quoted by TUBE.

The NAB is taken to task for its relatively mild actions in the cigarette advertising area, proposing voluntary withdrawal by September 1971, which was a considerably longer period than some tobacco companies were willing to accept if the broadcasting industry would release them from their contracts. It is also claimed that the NAB has not been able to eliminate deceptive analgesic advertising, claiming to relieve "jumpy nerves" and "taut-tense nerves", despite the findings of the Medical and Science Advisory Panel that in its experts' opinion none of these products can relieve tension, depression, jumpy or taut-tense nerves, findings which the NAB called to the attention of broadcasters. n11

n11 "The NAB still continues to see itself as the protector of the free enterprise system of broadcasting which is another way of saying don't interfere with the broadcaster's right to sell advertising time as he chooses." From a speech by Warran Braren, former head of the New York office of the NAB's Television Code Authority, before the Advertising Age Media Workshop, December 3, 1969, quoted by TUBE. See paragraphs 19-21, below for further reference to the NAB and its activities.

12. The responsibility and authority of the FCC. In view of the problem as described, and the asserted inadequacy of other methods of dealing with it, TUBE calls for regulatory action by this Commission, using as a basis its absolute licensing power over broadcasting stations, under which it gives licensees a limited (or sometimes only slightly limited) monopoly for the term of the license. Numerous cases in which we have granted short-term renewals, or revoked or denied renewal of licenses, are cited, as well as the tremendous monetary value of the licenses involved. Our obligation under the Communications Act to grant licenses only where they would serve the "public interest, convenience and necessity" is noted, as well as our mandate to encourage [*365] the larger and more effective use of radio and act by rule to carry out the provisions of the Communications Act (Sections 303(g) and (r)). It is pointed out that the FCC, as well as its predecessor Federal Radio Commission, have recognized the public-interest aspect of advertising (and of avoiding deception in it) in the 1960 Program Policy Statement quoted above, early decisions concerning dangerous drugs and "quack" medicines, and, more recently, the running of fraudulent contests by stations (footnote 6, above), and fraudulent use of audience "rating" material. Actions applying the "fairness doctrine" to cigarette advertising, and against stations which carried rigged quiz shows, are also cited as precedent. n12 In sum, it is asserted, the public interest requires that we act to exclude deceptive commercial advertising along with these other types of material.

n12 The early cases cited are KFKB Broadcasting Association v. FCC, 47 F. 2d 670 (1931); Farmers Bank and Bakers Life Insurance Company, 2 FCC 455 (1935); and Oak Leaves Broadcasting Station, Inc., 2 FCC 298 (1935). The cigarette-advertising "fairness doctrine" ruling is found in WCBS-TV, 9 FCC 2d 921.

13. The constitutionality and appropriateness of Commission adoption of general standards. TUBE claims that the adoption of general advertising standards does not present any Constitutional problems, for example under the First Amendment bar against restrictions on free speech. It cites in support of this proposition National Broadcasting Company v. U.S., 319 U.S. 190 (1943); the KFKB decision (footnote 12, supra), in which the Court noted that there had been no Commission effort to scrutinize the broadcast matter prior to broadcast, and stated that later consideration of it, in the public interest evaluation of a renewal application, is not censorship; and Bay State Beacon, Inc., v. FCC, 171 F. 2d 826 (1948), a comparative hearing situation in which one applicant was preferred over another inter alia because of the respective amounts of time proposed to be devoted to sustaining and commercial broadcasting. In urging adoption of general standards, TUBE calls attention to our 1963 proposal to adopt rules limiting the amount of commercial advertising stations could carry, in which we pointed out the advantages of such an approach: permitting an over-all treatment of the problem, being definite and affording guidance, and applying equally to all competitors in a given market. n13

n13 Notice of Proposed Rule Making in Docket 15083, FCC 63-467 (1963). In the decision in that proceeding (1 R.R. 2d 1606 (1964)) it was decided not to adopt definite over-all standards but to consider the matter on a case-by-case basis. It was concluded that the record did not contain information on which a sound set of generally applicable standards could be formulated, and that further investigation and adoption of a new program reporting form yielding better information, were needed before such action. One important factor in the decision was the existence of an industry-formulated code of good practice in the field, which, while far from completely successful as a general regulating device, was one appropriate limitation and may be more effective in the future.

14. TUBE's proposed Code of Standards. As mentioned, TUBE's original request was that we adopt as a rule its Code of Standards. Briefly, after an introductory statement, paragraph I-B sets forth the general principle that licensees have certain responsibilities in this area, to see that advertising is presented with courtesy and in good taste, in accordance with the highest standards of ethical sensitivity, acceptability and discretion in relation to the average viewer; that licensees must understand the great effect of advertising, especially on children and youth; and that concern for the public good should take [*366] precedence over economic expediency and institutional or individual advantage. Section II sets forth slightly more definite criteria for identifying "deceptive" advertisements, which are proscribed: the tendency or capacity to deceive the average viewer, through misrepresentation as to a product's characteristics, performance and/or appearance, by misrepresentation of facts, misrepresentation in the implications derived from the "totality" of the advertisement, or failure to disclose material facts. Section III deals with enforcement, stating that, on reasonable notice, the Commission shall take appropriate action against licensees not complying with the provisions of the Code, such action to be limited to the sanctions provided in the Communications Act.

15. Commenting on these proposed provisions, TUBE asserts that they recognize the importance of protecting "the ignorant, the unthinking, and the credulous" as well as children and youth, that they require licensee awareness, and that they reflect an appropriate balance between the undoubted economic importance of advertising -- in dispensable to broadcasting under the American system, as we have noted -- but subordinating economic interest to the public good. It is asserted that the proposal will permit FCC participation in regulation in this area without requiring any legislation or change in inter-agency relationships, simply the acceptance by this Commission of greater responsibility for the benefit of the viewing public. With respect to its more specific criteria of "deception" in Section II of its Code, TUBE defines "misrepresentations of fact" (one of the most common forms of deception) as including both verbal and visual representations, the latter including "undisclosed simulations, mock-ups, distortion by cameras or props, or tampering with or abusing a competitor's product." TUBE also discusses its concept of misrepresentation resulting from total impressions, deception "from the sum total of not only what is said but of all that is reasonably implied." ( Aronberg v. FTC, 132 F. 2d 165, 167 (1942)). The third method of deception mentioned is failure to disclose, or "inverted deception", the omission of facts as to a product's dangers, limitations or ineffectiveness. n14 Illustrations are advanced of these methods of deception among the various examples set forth by TUBE summarized below. As to enforcement, TUBE cites the Commission's public-interest responsibility in connection with licensing. n15 It is is suggested that the assistance of other Government agencies could be used in this connection; for example, the FTC might make the determination that a particular ad is deceptive; the FCC would be responsible for determining whether a licensee had adhered to the prescribed standards designed to eliminate deceptive ads, and, if it concluded he had not, he could receive a letter of censure, a short-term renewal, a denial of renewal, or a revocation.

n14 "To tell less than the whole truth is a well known method of deception; and he who deceives by resorting to such a method cannot excuse the deception by relying upon the truthfulness per se of the partial truth by which it has been accomplished." P. Lorillard Co. v. FTC, 186 F. 2d 52, 58 (1960).

n15 TUBE cites a 1959 memorandum by the then Attorney General, William Rogers, suggesting a more thorough analysis of broadcast renewal applications on a spot check basis, including consideration of advertising practices, material which has been advertised, and action on complaints issued by the FTC.

[*367] ADDITIONAL SUGGESTIONS IN THE TUBE SUPPLEMENT TO PETITION

16. On April 6, 1970, TUBE filed a supplement to its petition, making five suggestions. The first is adoption of an "Advertising Primer", similar to the well-known "Fairness Doctrine" primer (29 F.R. 10415 (1964)), to be complied with the assistance of the FTC, containing the rules and proposed Code, case law, and relevant FTC and FCC rulings in deceptive-advertising cases. This would provide notification to licensees so that they could properly regulate their action if an ad deviated from the detailed standards set forth in the Primer. TUBE asserts that even if no other Commission action were taken this step would have a substantial effect in curbing deceptive advertising. TUBE's second suggestion is that the Commission amend its renewal application form to provide for information as to the station's practices in this area, including a description of the licensee's procedures for detecting and preventing deceptive advertising, and his procedure when he receives complaints on this subject. The third suggestion is that licensees be furnished with notification as to what ads are found to be deceptive, either from the "Advertising Advisory Board" discussed below, or (if that is not established) from other government agencies, networks, and advertising agencies. The fourth suggestion is that stations be required to keep logs showing all advertising run; if the log shows presentation of a deceptive ad, this would be held against the licensee at renewal time unless he could show good faith and absence of negligence. The fifth suggestion is that an Advertising Advisory Board be formed, non-investigatory in nature and designed to assist in identifying deceptive advertising, to which licensees could refer doubtful material and which would act on complaints to the FCC, notifying the FTC and licensees (and also relaying to the licensee all FTC and other government rulings).

THE TUBE EXAMPLES OF ALLEGEDLY DECEPTIVE ADVERTISING

17. In the next paragraph, there is set forth a summary of the 20 TUBE examples and petitioner's comments on them. See footnote 2, above. n16

n16 It is noted that few of the examples involve an actual affirmative false statement, which is perhaps the easiest form of deception to deal with. In some cases, the matter is one of visual technique (the toy ads); in other cases, it is a question of nondisclosure of limitations or harmful effects. We note that (aside from the long-standing Geritol situation) at least one of the commercials mentioned by TUBE, concerning the vegetable slicer, has since been the subject of an FTC determination and proposed complaint. On the other hand, at a meeting of FTC and FCC staff members held in mid-August 1970, the former expressed the view that three of the TUBE examples were not in fact false and misleading from their standpoint, and in another case (the allegedly harmful toothpaste) this was recognized as a possible problem and was being studied, but there is at present no way of establishing that the advertisement should be barred as deceptive. In sum, it appears that while many people might regard some of the examples as deceptive, probably this would not be true of all of them, and opinions might well differ as to which ones are so. Thus, it appears that often there are no clear-cut or easy answers.

18. The 20 TUBE examples relate to toys (3, two dolls and a racing car set), analgesics (2, both Anacin), household goods (3, a cutterslicer, a brush, and drain cleaner), enzyme detergents (7), and miscellaneous (5, snow tires, Listerine, a toothpaste, Geritol, and a disposable diaper). TUBE's comments may be summarized as follows:

(a) With respect to the toys, the chief complaint is misleading visual effects, including showing a doll and human dancers in [*368] rapid succession (giving a false idea of the doll's possible movements), showing a doll rapidly from different camera angles, and, for the racing cars, the total impression from the speed of the sound track and the camera techniques, making the car appear to go faster than it can and also appearing larger and more agile, a "total impression" gained by the viewer which is inconsistent with the actual performance.

(b) TUBE regards the analgesic ads as misleading in two respects: (1) the "pain relieving ingredient" referred to is aspirin (which is generally regarded by the public as the real pain reliever), and all of these tablets contain the same amount of aspirin; therefore the comparison of two of one tablet to four of another is a misrepresentation of fact with respect to the impression created; (2) the second ad, it is said, gives the impression that the tablet will relieve tension, whereas it will not. n17

n17 "Anacin relieves headache pain and so relaxes its tension... Headache pain, stress, nerves, pain, its tension builds... there can be more to a headache than pain."

(c) The complaint about the cutter-slicer is that the ad creates the impression that it cuts and slices with ease, whereas, TUBE claims, it can be used only with considerable difficulty and the blades sometimes break and are hard to clean. With respect to the brush, the totality of the ad is said to give a misleading implication inconsistent with the brush's true performance. As to the liquid drain cleaner, the deception is said to consist in showing a sink full of water and immediately switching to a clear sink, implying that the product will work through any obstacle, immediately, and the first time.

(d) As to the detergents, the complaints common to all of the ads set forth are nondisclosure: that the products require presoaking, often overnight; that they work only on some stains (protein-based); and failure to disclose that the action may result in acid-like burns in the fabric.

(e) With respect to the snow tires, the complaint is against the totality of the ad; cars simply do not move off that easily in ice and snow regardless of the tire used, but slip and slide. It is also pointed out that there is a "dangling comparative"; these tires "last longer". As to Listerine, it is said that the totality of the ad implies that Listerine will help in preventing colds, which it cannot. n18 The toothpaste is said to mislead because of nondisclosure of harmful effects on tooth enamel from the abrasives involved, a harmful "side effect". The Geritol ad is said to mislead by implying that the product is a panacea for "iron-poor blood", whereas there are several causes of this condition which the product will not remedy. The diaper ad involves a comparison as to water soaking through; TUBE claims that it is misleading in that it implies that other diapers do not have a keep-dry lining and waterproof backing, whereas some of them do.

n18 "It's colds I'm worried about. We can't really stop'em, but this year we're going to fight back with lots of sleep, good food, and gargle twice a day with Listerine. I bet that'll help keep you in school." [*369]

19. The NAB and its Television Code Board and Authority. It appears that the activities of the NAB and related groups in the deceptive-advertising area are somewhat greater than would be gathered from the TUBE material set forth above, increasing in recent years. For many years that organization has had a Television Code Board, and, to implement the actions of the Board, a Code Authority. As of December 1969, some 408 stations (roughly 65% of operating U.S. television stations) were TV Code subscribers. n19 As re-issued in March 1971, the TV Code contains numerous provisions relating to avoidance of deception. Generally, it is stated that a broadcaster should, in recognition of his public responsibility, refuse advertising when he has "good reason" to doubt the integrity of the advertiser, the truth of the representations, or compliance with the spirit and purpose of all legal requirements; that advertising should be presented with courtesy and good taste; and that great care be exercised to avoid presenting false, misleading or deceptive advertising. While it is appropriate to present a product in a "favorable light", the presentation must not, by copy or demonstration, involve a material deception as to the product's characteristics, performance or appearance. As to competing products, advertising should refrain, by identification or other means, from discrediting, disparaging or unfairly attacking competitors or competing products, or other industries professions or institutions. More specifically, it is stated that "bait-switch" advertising is unacceptable, and personal endorsements or testimonials shall be genuine and reflect personal experience, and contain no statement that cannot be supported if presented in the advertiser's own words. In connection with commercials in or near children's programs, it is stated that broadcasters should use special caution, avoiding exploitation and presenting only commercials which "in no way mislead as to the product's performance or usefulness." In connection with advertising of medical products, it is stated that this presents considerations of high importance because of the direct bearing on the consumer's health; and that claims of cure and indiscriminate use of words such as "safe", "without risk", "harmless", or similar terms should not be used. Physicians, dentists or nurses, or actors portraying them, are not to be employed directly or by implication in commercial announcements selling a particular product (the same applies to related professions, such as physical therapists and pharmacists); laboratory settings may be used if they have a direct relationship to bona fide research which has been done on the product. There are also specific provisions concerning avoidance of exaggerated employment claims in ads for institutions offering instruction, and concerning ads involving premiums and offers. n20

n19 Not all NAB member TV stations are Code subscribers, and some stations are subscribers but not NAB members.

n20 The Code also contains a number of provisions concerning advertising less immediately pertinent here, such as prohibition against some types (e.g., hard liquor and "tip sheets") limitations on others (e.g., beer and wine) and provisions concerning "good taste", e.g., in advertising concerning products of a personal nature.

As to the results of research or testing, the Code states that such activities relating to the product advertised "shall not be presented in a manner so as to create an impression of fact beyond that established by the work which has been conducted."

[*370] 20. The NAB Television Code Board and Authority conduct continuing activity in this area, including issuance of a periodic "Code News" inter alia informing subscribers of FTC complaints, orders and Trade Practice Rules and other industry-wide regulations, Court and Food and Drug Administration actions, as well as FCC actions. The Authority reviews commercials, declaring them acceptable or unacceptable; during the first 9 months of 1968, 977 commercials were reviewed, representing 188 manufacturers, 443 products and 132 advertising agencies, with particular emphasis on toy advertising, ads for arthritis and rheumatism, ads involving "competitive disparagement", and those for weight-reduction products. Examples of commercials disapproved are those for a dandruff remover (claim of "positively controls dandruff" not adequately substantiated); a sprayon bandage (ad designed to appeal to children despite warning on package to keep it away from children); a battery additive (documentation supporting claim of effectiveness in winterizing battery held inadequate); four commercials for an antacid (objectionable as involving self-diagnosis and treatment going beyond the Code limits); diet wafers (documentation insufficient and video demonstration misleading); and ulcer remedies (involving too much self-diagnosis and treatment for what is a serious condition). It appears that before reaching a decision of unacceptability, the Authority tries to get the manufacturer or agency to revise the commercial to make it acceptable; this is often done but was not in these cases. The November 1970 issue of the Code News listed 272 toy commercials which had been reviewed and (sometimes with suggested changes) approved during 1970.

21. The Code publications also include material of a general nature. For example, 1968 issues of the Code News contained the FTC's guidelines as to what kind of advertising of guarantees is acceptable (the description of the guarantee must be specific as to what is covered, duration, limitations, etc.), and a question and answer exposition of what claims are acceptable in the advertising of vegetable oil and margarine. The December 1970 Code News called attention to the FTC's pronouncement of October 1970, concerning what is an adequate "affirmative disclosure" in a television ad where such disclosure is required. n21 The Code Board and Authority have also issued general guidelines in certain product areas, concerning the types of claims which are proper or improper. These include toys, arthritis and rheumatism remedies, and -- February 1971 -- non-prescription drugs (designed to deal with the claimed connection between the lavish advertising of such products and the growing use of illegal drugs). The November 1970 Code News contained some rather specific interpretations of the toy-advertising guidelines.

n21 The disclosure should be simultaneous on both the audio and video portions of the advertisement; the video announcement should be in letters large enough to be easily readable on all sets, and contrasting with the background; no other sounds should be presented during the audio disclosure; the video announcement should last long enough to be read completely; the disclosure should be presented immediately after each presentation of the specific claim to which it relates; and it should be in language understandable to the audience to whom it is directed.

22. It also appears that the Code Authority does considerable monitoring of stations, to determine whether the various Code standards [*371] are being complied with. It does not appear how much of this relates to possibly deceptive advertising, and how much to observance of other types of standards, such as amounts of commercial time, "good taste", etc.

23. Activities of the three national networks. Much of television advertising is, of course, contained in programs presented by the three national networks. It appears that all of the networks have standards for the acceptance of advertising, including, like the NAB, some documentation as to performance claimed. It is said that these standards differ somewhat, and to some degree the NAB's Code Authority's action occurs when there are differences among the networks as to acceptability. CBS has described its organization and standards in this area to the Commission in connection with the complaint of the Consumers Association of the District of Columbia against CBS and WTOP-TV, Washington, which we have passed upon today. The details are set forth in that document and will not be repeated at length here; it is stated that CBS has six editors working exclusively on commercial material, which is said to be carefully reviewed initially (often with conferences with the advertiser or its agency concerning the claim and its substantiation), and later if there are complaints from the public or inquiries from affiliates. A medical adviser is also used to pass on medical claims. The CBS Research Department is called upon to evaluate the methodology of scientific studies submitted in support of claims; and there is said to be consultation with other public groups such as the National Safety Council, the Council of Better Business Bureaus, the American Dental Association, and Underwriters Laboratories, as well as reference to FDA and FTC publications.

24. Activities of the Federal Trade Commission. It also appears that the TUBE petition may give an erroneous impression as to the extent of FTC activity in this area, even as of the time it was written. For example, the figures quoted by TUBE from the ABA Report, as to the smaller number of FTC formal complaints and Orders issued after adjudicatory proceedings, may not take into account the extent of enforcement achieved otherwise: through "consent" Orders issued after complaint but without hearing, and, perhaps more important, voluntary and Industry-wide actions, such as the promulgation of Industry Guides and Trade Regulation Rules, and the issuance of advisory opinions. In addition to the guidelines concerning permissible advertising of guarantees, mentioned above, general rules and guidelines proposed or adopted in recent years include those concerning the general subject of "deceptive pricing" (offering a particular product at less than a fictitious "going" or "regular" or "suggested retail" price); TV set advertising (picture size, etc.); tires ("first line", etc.); poisons (making the advertising conform to the warnings on the label); dog and cat food; watches (claims as to the number of jewels, material from which the case is made, and durability); glass fabrics and draperies (disclosure of possible hazards to skin from washing and handling); and radios (as to) number of transistors). The FTC also has long done considerable monitoring of television and radio to check on possible deceptive [*372] advertising, in addition to its review of print advertising. It gets regularly from the three national networks a "staggered week" containing all of their commercials run on 7 days.

25. Whatever may have been the case at the beginning of 1970, certainly the TUBE petition gives an incorrect idea of the FTC's activity and effectiveness as of mid-1971. Since the time it was written, that agency has taken many steps to increase the extent and effectiveness of its activities aimed at protection of the consumer, including a sweeping reorganization and the formation of a new Bureau of Consumer Protection. Among its numerous other actions have been: (1) the inclusion in a number of orders proposed in complaints, and also in at least one consent order, of a provision requiring the advertiser involved to devote a substantial amount of his advertising over the next year to statements either that his product would not do what he had previously claimed it would do, or that the FTC has alleged his previous advertising to be deceptive; n22 (2) the adoption in June 1971 of a resolution which would require companies on an industry-wide basis to submit to the FCC the tests and other material which they allege support their specific advertising claims (starting with the automobile industry in the fall of 1971); (3) the public notice mentioned above (October 1970) concerning what constitutes an adequate "affirmative disclosure" announcement on television when such an announcement is required; and (4) the calling of a general conference on advertising, to begin this fall, with particular emphasis on TV advertising.

n22 This type of remedy has been proposed, inter alia, in complaints issued against Continental Baking Co. (ITT) in connection with three of its products; Standard Oil Co. of California (Chevron); a sugar company. Continental Baking has consented to an order including such a provision in connection with one of the three products.

26. One point which is made by TUBE and has been urged by many others in the past is the delay involved in FTC matters, between the time it receives a complaint from the public and the time it issues a formal complaint, from issuance of a formal complaint until a final Order is entered, or, occasionally, after an Order but before full compliance is secured (the Geritol situation). Unquestionably, over the years this has been true in some situations where full-scale adjudication is involved; this is one reason for the emphasis on consent proceedings, informal assurances of future compliance, and trade-practice rules and other industry-wide actions. n23 Another way of dealing with the problem, which the FTC has long sought from the Congress, is to enable the agency to seek injunctive relief against the advertising when it issues a complaint, on a broader basis than it now is able to do under the Federal Trade Commission Act. There have been other bills introduced in the Congress in recent years, some of which both the FTC and the FCC have supported, to create a new Federal agency particularly charged with the protection of consumers' rights.

n23 As far as the time between initial complaint and formal FTC action is concerned, sometimes the period is quite short, for example only slightly more than 4 weeks in a case involving TV advertising for a window-cleaner. The investigation began about July 15, 1970 and a "determination to issue complaint" was issued August 18, 1970. This degree of speed is probably unusual, but it demonstrates that delay is certainly not inevitable.

27. Self-regulation within the advertising industry. It is also appropriate to take note of a very recently formed group for the review of national advertising, within that industry itself -- the National [*373] Advertising Review Board (hereinafter the Board), recently formed under the sponsorship of the National Advertising Review Council, a group composed of representatives of leading groups in the industry. n24 The Board consists of a Chairman (Charles W. Yost, former Ambassador to the U.N.), 10 public members (including former FCC Commissioner Kenneth A. Cox), 10 members from advertising agencies (plus ten alternates), and a larger number of members from businesses which are national advertisers (the organizational structure contemplates 30, of which about 22 had been named by late September). The Board's stated objective is to sustain "high standards of truth in national advertising", and it is to operate through review of complaints about national advertising, when cases are referred to it by the National Advertising Division of the Council of Better Business Bureaus, after that agency has been unable to resolve matters -- "complaints or questions received from any source" -- through evaluation, investigation, and initial negotiations with the advertiser. The review by a five-member panel of the Board is to result in a decision; if it is concluded that the advertisement is misleading or deceptive and therefore violates the Board's standards, the advertiser is given a reasonable time to withdraw or modify the ad, and ten days to indicate his acceptance or rejection of the decision. If the decision is not accepted and complied with, "the appropriate Government agency" will be notified of the decision and non-compliance. This notification, and any comments which the advertiser may wish to make on it, will be released to the news media.

28. It is, of course, too early to evaluate the effectiveness of this new Board in the national advertising area (which is where most of TUBE's examples fall). However, as with the NAB's activities mentioned above, at least the mechanism for considerable self-regulation has been established.

n24 The American Association of Advertising Agencies, Inc., The American Advertising Federation, Inc., The Association of National Advertisers, Inc., and The Council of Better Business Bureaus, Inc.

DISCUSSION

29. In light of the foregoing and the opinion in the WTOP-CBS case, issued this day, little discussion is needed with respect to the disposition of the TUBE petition. Indeed, for the reasons stated in that opinion -- and primarily the recent activity of the FTC -- the TUBE petition will not be granted. We therefore need discuss here only a few aspects of the TUBE petition. n25

n25 As set forth in the WTOP-CBS decision, we have concluded that the institution of rule making proceedings in this area is not appropriate, at least at present; but we will shortly issue a new Public Notice setting forth the obligations and responsibility of broadcast licensees in the avoidance of deceptive advertising, and we will explore with the FTC the feasibility of developing an "advertising primer" for broadcasters. We also expressed our belief that it is desirable for licensees to set forth, and make available in the local public file, their procedures and staff responsibilities in the deceptive-advertising area. See letter to Geoffrey Cowan, Esq. and Joseph N. Onek, Esq., FCC 71-1098, pp. 10-11.

30. Improving notification to licensees as to advertising found deceptive. This suggestion of TUBE (para. 16, above), warrants implementation. As mentioned above, for a long time the FCC mailed to broadcast licensees copies of FTC releases concerning advertising matters, an arrangement suspended in November 1970 at the FTC's [*374] request. Many licensees now receive material directly from the FTC. We will examine in the near future whether new notification arrangements are needed and if so adopt them.

31. Other TUBE suggestions. TUBE advanced two other requests, mentioned in para. 16, above, and not passed upon in the WTOP-CBS opinion. As to the suggested formation of an "Advertising Advisory Board," with the number of groups already active in this field as mentioned above, including the newly formed National Advertising Review Board, we believe this to be unnecessary, at least for the present. With respect to the suggestion that TV station logs be required to show individual commercials run, we are not persuaded that anything additional to present logging requirements is needed. Station program logs must now show the sponsor (or person paying for) each program and commercial announcement, except in network programs, when the networks compile and furnish such information. While there could be a question as to which one a number of commercials for a given product was run at a particular time, we are not aware that this is a significant problem.

32. In view of the foregoing, IT IS ORDERED, That the petition for rule making filed on January 13, 1970, by Termination of Unfair Broadcasting Excesses (TUBE), IS DENIED, except to the extent indicated above.

FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.

DISSENTBY: JOHNSON

DISSENT:

DISSENTING OPINION OF COMMISSIONER NICHOLAS JOHNSON

For some time the Commission has had under consideration various proposals and complaints dealing with broadcasting advertising, including questions of control of false, misleading or deceptive advertising. By its actions here the Commission concluded that nothing of substance has been presented to it worth considering in formal proceedings outside of the Children's Television Rulemaking and the Inquiry on the Fairness Doctrine. I dissent to this do-nothing attitude.

There are two purposes for this short opinion. First, I want to review and comment on the actions the Commission is taking in response to complaints. And second, I want to introduce and summarize the appendix to this statement: a proposal for a comprehensive proceeding on television advertising, including proposed rules.

The two complaints decided by the majority today involve similar questions: what are the Commission's standards for determining whether a licensee has met his independent obligation not to carry false, misleading or deceptive commercials? Action for Children's Television asked for rulings that licensees must warn their audience of toy commercials subject to FTC complaints. The majority tells ACT that licensees must consider FTC complaints, but that warnings are not required and Fairness Doctrine issues are not raised. ACT is "invited" to submit evidence, if they have any, that licensees are not meeting their obligations. Since it is difficult to tell what those obligations are, other than to say that licensees have looked at the FTC complaints and decided to run the commercials anyway, it is hard to [*375] imagine what evidence the majority expects ACT to gather. We then promise to take up these "basic and important" questions in the Children's Television proceeding and the Fairness Doctrine Inquiry.

The D.C. Consumers complaint raises a similar question. It is said that WTOP-TV and CBS have inadequate procedures for reviewing television commercials, and therefore Commission policies regarding licensee responsibility for commercials are not being carried out. As with the ACT petition, we say that licensees have to take account of FTC complaints, but we decline to specify how licensees should comply with Commission policies. We ask for "reasonable diligence" and give some examples of possible ways this "responsibility" can be met. A licensee has "to be a vigilant as feasible." We promise a new public notice on false advertising, and say we will look into issuing an advertising primer. We don't want a "new time consuming rulemaking," but then we might review the question of rulemaking later. We don't want to add anything to the renewal form -- like an explanation from the licensee as to what he is doing -- but we might have the licensee write up something to keep at his station.

All this vigorous FCC action is supposed to lead to a "new mood of heightened awareness on the part of licensees."

We then tell WTOP-TV that it should review FTC complaints and advertisers' responses, and require evaluations from CBS when it receives complaints about CBS commercials, if WTOP-TV is relying entirely on CBS for the initial evaluation of commercials.

Finally, the Commission rejects the 21-month-old petition for rulemaking filed by TUBE, a group of George Washington University National Law Center students. Relying on its discussion in the Consumers complaint, the TUBE petition is denied.

The only conclusion that can be drawn from these non-actions by the majority is that broadcast licensees are free to make decisions about commercials in whatever way they wish, and can continue to succumb to the pressure to take whatever commercials are offered them, absent a final FTC order finding the commercial false, misleading or deceptive.

There is apparently to be no way that any public interest representative can successfully raise an issue of whether the licensee is exercising reasonable diligence, so long as the licensee engages in a few little formalities. Consumers are justified in concluding that relief from present advertising practices must be found elsewhere than at the Federal Communications Commission. Its abdication on questions of commercial advertising is complete -- except to the extent the majority attempts to protect advertisers and licensees from the effects of adverse court decisions. I find this stance by the Commission deplorable but not surprising. As with the Commission's initial "no standing" posture in the first notorious United Church of Christ case, I do not expect the Commission's attitude to change without Court or Congressional action.

I had hoped the Commission would use the TUBE petition as a starting point in initiating a thorough review of Commission policies regarding advertising. To that end I made several proposals for inclusion in a notice of proposed inquiry and rulemaking. I was not successful. [*376] I could not convince my colleagues that any proposals were worthy of being considered in a formal proceeding.

Perhaps there is reason to hope these problems will just go away. I don't believe they will. And I am convinced that even these industries -- broadcasting and advertising -- will suffer in the long-run from the failure of the Commission to provide even minimum standards of good practice.

The Appendix to this opinion suggests a proceeding, and proposes some rules on a variety of advertising issues. Had my colleagues been willing to go ahead, I believe we would have received very useful information and comments, as well as counter-proposals and suggestions. The Commission would then have been in a better position to decide whether any proposals merited adoption.

I have seen this Commission fully consider issues, and then decide to take actions I did not agree with. Sometimes I have felt those actions to be very wrong, but at least the Commission was willing to fully consider all the alternatives, and to hear diverse views on the proposed alternatives. Here the Commission is unwilling even to consider proposals after they have had the opportunity to hear comments from all sides. That I cannot accept; nor would the American people, in my judgment, were they ever to find out about it.

APPENDIX:

APPENDIX

Before the Federal Communications Commission, Washington, D.C. 20554

IN THE MATTER OF ADOPTION OF STANDARDS DESIGNED TO ELIMINATE DECEPTIVE ADVERTISING FROM TELEVISION

Docket No. RM-1553

NOTICE OF INQUIRY AND PROPOSED RULEMAKING

1. The purpose of this proceeding is to determine what over-all actions by this Commission, if any, can and should be taken to prevent the presentation by television broadcast stations of false and misleading, or deceptive, advertising of commercial products or services. It is prompted by a petition for rule making filed by a group of law students called Termination of Unfair Broadcasting Excesses, or TUBE, on January 13, 1970, which was supplemented, particularly with respect to more specific action requested, on April 6, 1970. The petition was supported in letters from Consumers Union and others, and some Congressional interest has been expressed. No opposing statements have been filed. n1

n1 The TUBE petition deals entirely with television. The problem is not, of course, confined to this medium but may also exist in radio. We welcome comments on how the situation in radio is the same or different, and what role this Commission should play with respect to that medium as well as television. However, radio in general probably does not have the impact that television does, and, moreover, radio advertising is a much less centralized operation, as to which regulation might be more difficult. Therefore the primary emphasis in this proceeding is on television advertising.

2. The TUBE petition is discussed at some length below, and we attach as Appendix A hereto the 20 examples of TV advertising, allegedly presented and allegedly deceptive for the reasons stated in the TUBE comments on the examples. n2 We note that in substantial part the petition is premised on the alleged inadequacy of regulation by other Government agencies, chiefly the Federal Trade Commission (FTC), and of industry "self regulation" (e.g., by the National Association of Broadcasters (NAB)). We do not necessarily agree, by any means, with the opinion expressed in the petition as to the efforts of these other agencies and groups; but we believe there may be something which this Commission can and should do in this area in addition to these efforts. The TUBE petition represents a thoughtful and well-written contribution to advancement of the public interest.

n2 The examples and the TUBE comments on them are presented exactly as set out in the petition, except for the deletion of the name of the local outlet (a leading department store in an Eastern city) in Example D-1. The reservations with which we set forth this material verbatim are discussed in paragraph 17, below.

3. Appendix B hereto is the "Code of Standards" which TUBE urges us to adopt. This is set forth for comment.

n3 Report and Statement of Policy re: Commission En Banc Programming Inquiry, July 27, 1970, 25 F.R. 7291, 20 Pike & Fischer R.R. 1901.

Broadcasting licensees must assume responsibility for all material which is broadcast through their facilities. This includes all programs and advertising material which they present to the public. With respect to advertising material the licensee has the additional responsibility to take all reasonable measures to eliminate any false, misleading, or deceptive matter and to avoid abuses with respect to the total amount of time devoted to advertising continuity as well as the frequency with which regular programs are interrupted for advertising messages. The duty is personal to the licensee and may not be delegated.

5. This Commission operates closely with the FTC in this area, under the terms of an arrangement announced in a Public Notice adopted November 1, 1961, which is attached as Attachment 3 hereto. As stated therein, radio and television broadcast station licensees are regularly sent copies of FTC releases describing complaints issued by that agency, and later final Orders, concerning false and misleading advertising which has been presented on broadcast stations. The Public Notice points out the licensee's obligation: he should exercise particular care with respect to accepting and presenting material which has been the subject of an FTC complaint, even though this is not a final FTC determination as to the propriety of the material. After an FTC Order, if a broadcaster presents advertising which is known to have been the subject of such Order, "serious questions would be raised as to the adequacy of the measures instituted and carried out by the licensee in the fulfillment of his responsibility, and as to his operation in the public interest."

6. Under the FCC-FTC arrangement, complaints to this Commission of deceptive advertising are handled by us if they involve only local matters. Where the advertising is national, the matter is referred to the FTC. The practice of the FCC's sending FTC material to licensees was suspended in November 1970, at the FTC's request in connection with revision of its publications. However, many broadcasters receive material directly from the FTC, and we continue to work closely with FTC on these matters.

THE TUBE PETITION

7. The lengthy TUBE petition is divided into seven parts: (1) The Impact of Television; (2) The Harm Caused by Deceptive Advertisements; (3) The Failure of the Federal Trade Commission; (4) The Inadequacy of Self-Policing; (5) The Responsibility of the FCC to Regulate; (6) The Constitutionality of FCC Standards; (7) A Discussion of the Proposed Code of Standards. In the first section, TUBE discusses the tremendous impact of television as a source of impression and information; its widespread use for instruction is noted, and it is stated that TV actually drugs the viewer into a state of passive reception, in which he is susceptible to any form of information received from TV. n4 The power of the medium for advertising is also discussed, including the assertion that its effectiveness has been made even greater by recently sophistication in the science of motivation. It is said that, for example, inconsistency is used as a form of stimulation to create uncertainty, which the viewer attempts to resolve by trying to find an answer, e.g., purchasing a new product claimed on TV to be better than the one he is now using. n5 It is said that as a consequence of this entire process, advertising is susceptible to excessive claims which, often, lead to deception, which is "the capacity or tendency to deceive the public," without actual deception having to be established. Montgomery Ward & Co. v. FTC, 379 F. 2d 666 (1967). The tendency to deceive, it is said, is greatest among the least sophisticated viewers, which are those that regulation should protect. Exposition Press, Inc. v. FTC, 295 F. 2d 869 (1961). n6 It is also asserted that the more extravagant the claim, up to a point, the more successful the ad; if you repeat a claim loud, often and vigorously enough, the problem of disbelief will disappear.

n4 Many of the statements set forth herein as taken from the TUBE petition are in fact paraphrases there of the statements of writers in the fiel, cited in the petition, including social scientists, psychologists, marketing and advertising experts, and others.

n6 TUBE also quotes a passage from our 1968 decision in National Broadcasting Company, Inc., FCC 68-597, 14 R.R. 2d 315, 316, to the effect that deception may result from statements which are not technically false or are perhaps even technically true, "since the only relevant consideration is the impact of the statements on the general public, including the ignorant, unthinking and the credulous." This case involved a contest on an NBC radio station, in which the prize money was said to be $1,000,000, whereas the chances of NBC's actually awarding the sum, or anything like it, were extremely remote. There were other misleading aspects.

8. Concerning the harm involved in deceptive advertising, the petition mentions the financial loss in purchasing a deceptively advertised product (possibly small each time, but large in the aggregate), inordinate gains to the manufacturers whose products are thus unfairly sold, and harm to health from undisclosed side effects and reliance on worthless remedies when effective treatment is needed. It is said that this most affects those who can least afford it, such as the poor (particularly inner-city residents, who are particularly susceptible to misleading claims of products seeming to identify with the "prosperous middle class"), and children (without the experience and judgment necessary to evaluate exaggerations), n7 their parents (who probably did not see the ad which has motivated the child), and others. It is said that deceptive advertising also is harmful in the industry, with one exaggerated claim requiring all competitors to imitate or exceed it in "snowball" fashion, and with consequently no basis on which the public can evaluate legitimate claims (e.g., the toothpaste area, where the superiority of the only brand with real cavity-preventing qualities was lost, from 1956 to 1960, amid a welter of other claims some of them misleading). n8

n7 We do not here consider those aspects of TV commercials which relate only to children. This subject (as well as children's TV material generally) is under consideration in Docket No. 19142.

n8 According to the petition, this brand got only 12% of the market during this period; the leader, with 35%, based its advertising on a claim that tests showed persons brushing with it after every meal having better teeth than those following their regular brushing habit. TUBE claims that this was misleading in that any toothpaste used after every meal would have led to similar improvement.

9. Assertions concerning the Federal Trade Commission. TUBE asserts that the FTC, the traditional agency responsible for the regulation of deceptive advertising, has been ineffective. An American Bar Association Commission Report of 1969 is cited as labeling it as "a failure on many courts" in living up to its potential, with a decrease in investigations in the advertising field as compared to the 1962-1964 period, and a percentage of cases "pending over 2 years" of 52% in 1969. It is said by TUBE that the problems are "delay, ineffective sanctions, and the inability to reach those most responsible...", i.e., the broadcast licensees. n9 It is pointed out that in most areas -- those other than foods, drugs, physical devices and cosmetics where it has authority to seek injunctive relief against false advertisements -- the Commission cannot proceed until a final decision, after a lengthy investigation followed by a formal complaint and then adjudicatory proceedings, has resulted in a cease and desist order. Thereafter, the manufacturer-respondent has appeal rights, and it is only after these have been exhausted that an advertisement can be barred from the airwaves. It is pointed out that in the well-known Carter Pills case, 13 years elapsed from the first cease-and-desist order until the final removal of the deceptive commercials from the air. There are no retroactive sanctions, merely prohibitions of the same conduct in the future, and, according to TUBE, the prohibition runs only against the same type of material found deceptive, not other types of deception. The same is said to be true of cease-and-desist "consent" orders, where the respondent does not insist on the adjudicatory formalities. TUBE notes the decrease in formal complaints and cease-and-desist orders issued after formal proceedings, 177 and 180 in 1961 compared to 65 and 68 in 1969, in the advertising field.

n9 TUBE's analysis in the respect is not entirely correct. Section 5 of the Federal Trade Commission ACT (15 U.S.C. § 45), which is the basic legislative provision under which many FTC actions in the advertising area are brought, gives the FTC the power to prohibit unfair methods of competition and unfair or deceptive acts or practices in commerce. This does not contain any exemptions. The section referred to by TUBE, § 14(b) of the Act, is one of the sections added to the statute in 1938. The first of these, § 12 (15 U.S.C. § 52). deals specifically with false advertisements, declaring it unlawful to disseminate them in commerce. The second provides for the injunctive relief mentioned in the text in certain cases. The third, § 14, provides criminal penalties for the dissemination of advertisements prohibited by § 12, if the purchase or use thereof would be injurious to health or if dissemination was with intent to defraud or mislead. The second paragraph of this section, § 14(b), exempts from the criminal-penalty provision radio and television broadcasters, publishers, etc., except where they refuse to disclose the identity of the manufacturer, etc. responsible for the advertising. This is the restriction on the authority of the FTC over broadcasters to which TUBE refers, which is thus limited. See paragraph 22, below, for further reference to the FTC.

11. TUBE's assertions as to self regulation. It is asserted that self policing by the industry itself has generally been inadequate, with the NAB, despite its claims, for the most part unable to take care of problems in the deceptive advertising area. The petition cites a Time article of 1962, quoting Phil Edwards, the Chairman of Broadcast Advertisers Reports, to the effect that he would no longer monitor for the industry, since the NAB and stations were ignoring the complaints, and stating that self-regulation on an industry-wide basis is not only deceptive but impossible. The petition asserts that the structure of the industry precludes effective self-policing, since this would be biting the advertising hand that feeds it, and since broadcasters are not able to be selective unless all are required to conform to the same standard. n10 The NAB is taken to task for its relatively mild actions in the cigarette advertising area, proposing voluntary withdrawal by September 1971, which was a considerably longer period than some tobacco companies were willing to accept if the broadcasting industry would release them from their contracts. It is also claimed that the NAB has not been able to eliminate deceptive analgesic advertising, claiming to relieve "jumpy nerves" and "taut-tense nerves", despite the findings of the Medical and Science Advisory Panel that in its experts' opinion none of these products can relieve tension, depression, jumpy or taut-tense nerves, findings which the NAB called to the attention of broadcasters. n11

n10 "Agencies don't get paid for sticking to principles. If a company wants to go haywire in its claims, the agency either goes along or loses the account. Agencies need the moral crutch of Uncle Sam's regulation to resist the pressure of clients in this Darwinian jungle." Max Geller. "Madison Avenue v. the FTC", Time, February 2, 1962, p. 61, quoted by TUBE.

n11 The NAB still continues to see itself as the protector of the free enterprise system of broadcasting which is another way of saying don't interfere with the broadcaster's right to sell advertising time as he chooses." From a speech by Warran Braren, former head of the New York office of the NAB's Television Code Authority, before the Advertising Age Media Workshop. December 3, 1969, quoted by TUBE. See paragraphs 19-21, below for further reference to the NAB and its activities.

12. The responsibility and authority of the FCC. In view of the problem as described, and the asserted inadequacy of other methods of dealing with it, TUBE calls for regulatory action by this Commission, using as a basis its absolute licensing power over broadcasting stations, under which it gives licensees a limited (or sometimes only slightly limited) monopoly for the term of the licensee. Numerous cases in which we have granted short-term renewals, or revoked or denied renewal of licenses, are cited, as well as the tremendous monetary value of the licenses involved. Our obligation under the Communications Act to grant licenses only where they would serve the "public interest, convenience and necessity" is noted, as well as our mandate to encourage the larger and more effective use of radio and act by rule to carry out the provisions of the Communications Act (Sections 303 (g) and (r)). It is pointed out that the FCC, as well as its predecessor Federal Radio Commission, have recognized the public-interest aspect of advertising (and of avoiding deception in it) in the 1960 Program Policy Statement quoted above, early decisions concerning dangerous drugs and "quack" medicines, and more recently, the running of fraudulent contest by stations (footnote 6, above), and fraudulent use of audience "rating" material. Actions applying the "fairness doctrine" to cigarette advertising, and against stations which carried rigged quiz shows, are also cited as precedent. n12 In sum, it is asserted, the public interest requires that we act to exclude deceptive commercial advertising along with these other types of material.

n12 The early cases cited are KFKB Broadcasting Association v. FCC, 47 F. 2d 670 (1931); Farmers Bank and Bakers Life Insurance Company, 2 FCC (1935); and Oak Leaves Broadcasting Station, Inc., 2 FCC 298 (1935). The cigarette-advertising "fairness doctrine" ruling is found in WCBS-TV, 9 FCC 2d 921.

13. The constitutionality and appropriateness of Commission adoption of general standards. TUBE claims that the adoption of general advertising standards does not present any Constitutional problems, for example under the First Amendment bar against restrictions on free speech. It cites in support of this proposition National Broadcasting Company v. U.S., 319 U.S. 190 (1943); the KFKB decision (footnote 12, supra), in which the Court noted that there had been no Commission effort to scrutinize the broadcasting matter prior to broadcast and taking into account the conduct later, in the public interest evaluation of a renewal application, is not censorship; and Bay State Beacon, Inc. v. FCC, 171 F. 2d 826 (1948), a comparative hearing situation in which one applicant was preferred over another inter alia because of the respective amounts of time proposed to be devoted to sustaining and commercial broadcasting. In urging adoption of general standards, TUBE calls attention to our 1963 proposal to adopt rules limiting the amount of commercial advertising stations could carry, in which we pointed out the advantages of such an approach: permitting an over-all treatment of the problem, being definite and affording guidance, and applying equally to all competitors in a given market. n13

n13 Notice of Proposed Rule Making in Docket 15083, FCC 63-467 (1963). In the decision in that proceeding (1 R.R. 2d 1606 (1964)) it was decided not to adopt definite over-all standards but to consider the matter on a case-by-case basis. It was concluded that the record did not contain information on which a sound set of generally applicable standards could be formulated, and that further investigation and information, were needed before such action. One important adoption of a new program reporting form yielding better factor in the decision was the existence of an industry-formulated code of good practice in the field, which, while far from completely successful as a general regulating device, is one appropriate limitation and may be more effective in the future.

14. TUBE's proposed Code of Standards. The complete text of TUBE's proposed Code of Standards is attached as Attachment 2 hereto. Briefly, after an introductory statement, paragraph I-B sets forth the general principle that licensees have certain responsibilities in this area, to see that advertising is presented with courtesy and in good taste, is in accordance with the highest standards of ethical sensitivity, acceptability and discretion in relation to the average viewer; that licensees must understand the great effect of advertising, especially on children and youth; and that concern for the public good should take precedence over economic expediency and institutional or individual advantage. Section II sets forth slightly more definite criteria for identifying "deceptive" advertisements, which are proscribed: the tendency or capacity to deceive the average viewer, through misrepresentation as to a product's characteristics, performance and/or appearance, by misrepresentation of facts, misrepresentation in the implications derived from the "totality" of the advertisement, or failure to disclose material facts. Section III deals with enforcement, stating that, on reasonable notice, the Commission shall take appropriate action against licensees not complying with the provisions of the Code, such action to be limited to the sanctions provided in the Communications Act.

15. Commenting on these proposed provisions, TUBE asserts that they recognize the importance of protecting "the ignorant, the unthinking, and the credulous" as well as children and youth, that they require licensee awareness, and that they reflect an appropriate balance between the undoubted economic importance of advertising -- indispensable to broadcasting under the American system, as we have noted -- but subordinating economic interest to the public good. It is asserted that the proposal will permit FCC participation in regulation in this area without requiring any legislation or change in inter-agency relationships, simply the acceptance by this Commission of greater responsibility for the benefit of the viewing public. With respect to its more specific criteria of "deception" in Section II of its Code, TUBE defines "misrepresentations of fact" (one of the most common forms of deception) as including both verbal and visual representations, the latter including "undisclosed simulations, mock-ups, distortion by cameras or props, or tampering with or abusing a competitor's product." TUBE also discusses its concept of misrepresentation resulting from total impressions, deception "from the sum total of not only what is said but of all that is reasonably implied." (Aronberg v. FTC, 132 F. 2d 165, 167 (1942)). The third method of deception mentioned is failure to disclose, or "inverted deception", the omission of facts as to a product's dangers, limitations or ineffectiveness. n14 Illustrations are advanced of these methods of deception among the various examples set forth by TUBE and in Appendix A. As to enforcement, TUBE cites the Commission's public-interest responsibility in connection with licensing. n15 It is suggested that the assistance of other Government agencies could be used in this connection; for example, the FTC might make the determination that a particular ad is deceptive; the FCC would be responsible for determining whether a licensee had adhered to the prescribed standards designed to eliminate deceptive ads, and, if it concluded he had not, he could receive a letter of censure, a short-term renewal, a denial of renewal, or a revocation.

n15 TUBE cites a 1959 memorandum by William Rogers, then Attorney General, suggesting a more thorough analysis of broadcast renewal applications on a spot check basis, including consideration of advertising practices, material which has been advertised, and action on complaints issued by the FTC.

ADDITIONAL SUGGESTIONS IN THE TUBE SUPPLEMENT TO PETITION

16. On April 6, 1970, TUBE filed a supplement to its petition, making five suggestions. The first is adoption of an "advertising Primer", similar to the well-known "Fairness Doctrine" primer (29 F.R. 10415 (1964)), to be complied with the assistance of the FTC, containing the rules and proposed Code, case law, and relevant FTC and FCC rulings in deceptive-advertising cases. This would provide notification to licensees so that they could properly regulate their action if a licensee deviated from the detailed standards set forth in the Primer. TUBE asserts that even if no other Commission action were taken this step would have a substantial effect in curbing deceptive advertising. TUBE's second suggestion is that the Commission amend its renewal application form to provide for information as to the station's practices in this area, including a description of the licensee's procedures for detecting and preventing deceptive advertising, and his procedure when he receives complaints on this subject. The third suggestion is that licensees be furnished with notification as to what ads are found to be deceptive, either from the "Advertising Advisory Board" discussed below, or (if that is not established) from other government agencies, networks, and advertising agencies. The fourth suggestion is that stations be required to keep logs showing all advertising run; if the log shows presentation of a deceptive ad, this would be held against the licensee at renewal time unless he could show good faith and absence of negligence. The fifth suggestion is that an Advertising Advisory Board be formed, non-investigatory in nature and designed to assist in identifying deceptive advertising, to which licensees could refer doubtful material and which would act on complaints to the FCC, notifying the FTC and licensees (and also relaying to the licensee all FTC and other government rulings).

THE TUBE EXAMPLES OF ALLEGEDLY DECEPTIVE ADVERTISING

17. There are set forth in Attachment 1 hereto the 20 examples of allegedly deceptive advertising set forth by TUBE, with its comments. The fact that this material is set forth, almost verbatim as contained in the Appendices to the petition, does not constitute a determination by us that the material in fact was presented in exactly this form, or at least that it is currently being so presented. Even less is the presentation of the TUBE appraisals. We hope that in responding to this Notice, knowledgeable parties will point out any respects in which either the material is different, or TUBE's evaluation of it is not correct. But it is necessary to set the material forth in order to evaluate the arguments set forth above, which are based on it.

18. The 20 TUBE examples relate to toys (3, two dolls and a racing car set), analgesics (2, both Anacin), household goods (3, slicer, a brush, and Drano), enzyme detergents (7), and miscellaneous (5, snow tires, Listerine, a toothpaste, Geritol, and a disposable diaper). TUBE's comments may be summarized as follows:

(a) With respect to the toys, the chief complaint is misleading visual effects, including showing a doll and human dancers in rapid succession (giving a false idea of the doll's possible movements), showing a doll rapidly from different camera angles, and, for the racing cars, the total impression from the speed of the sound track and the camera techniques, making the car appear to go faster than it can and also appearing larger and more agile, a "total impression" gained by the viewer which is inconsistent with the actual performance.

n16 "Anacin relieves headache pain and so relaxes its tension... Headache pain, stress, nerves, pain, its tension builds... there can be more to a headache than pain."

As to the liquid drain cleaner, the deception is said to consist in showing a sink full of water and immediately switching to a clear sink, implying that the product will work through any obstacle, immediately, and the first time. With respect to the brush, the totality of the ad is said to give a misleading implication inconsistent with the brush's true performance.

(d) As to the detergents, the complaints common to all of the ads set forth are non-disclosure: that the products require pre-soaking, often overnight; that they work only on some stains (protein-based); and that they do not disclose that the action may result in acid-like burns in the fabric.

(e) With respect to the snow tires, the complaint is against the totality of the ad; cars simply do not move off that easily in ice and snow regardless of the tire used, but slip and slide. It is also pointed out that there is a "dangling comparative"; these tires "last longer". As to Listerine, it is said that the totality of the ad implies that Listerine will help in preventing colds, which it cannot. n17 The toothpaste is said to mislead because of nondisclosure of harmful effects on tooth enamel from the abrasives involved, a harmful "side effect". The Geritol ad is said to mislead by implying that the product is a panacea for "iron-poor blood", whereas there are several causes of this condition which the product will not remedy. The diaper ad involves a comparison as to water soaking through; TUBE claims that it is misleading in that it implies that other diapers do not have a keep-dry lining and water-proof backing, whereas some of them do.

n17 "It's colds I'm worried about. We can't really stop'em, but this year we're going to fight back with lots of sleep, good food, and gargle twice a day with Listerine. I bet that'll help keep you in school."

FURTHER DISCUSSION OF NAB AND FTC ACTIVITIES

19. The NAB and its Television Code Board and Authority. It appears that the activities of the NAB and related groups in the deceptive-advertising area are somewhat greater than would be gathered from the TUBE material set forth above, increasing in recent years. For many years that organization has had a Television Code Board, and, to implement the actions of the Board, a Code Authority. As of December 1969, some 408 stations (roughly 65% of operating U.S. television stations) were TV Code subscribers. n18 As revised in September 1969, the TV Code contains numerous provisions relating to avoidance of deception. Generally, it is stated that a broadcaster should, in recognition of his public responsibility, refuse advertising when he has "good reason" to doubt the integrity of the advertiser, the truth of the representations, or compliance with the spirit and purpose of all legal requirements; that advertising should be presented with courtesy and good taste; and that care must be exercised to avoid presenting false, misleading or deceptive advertising. While it is appropriate to present a product in a "favorable light", the presentation must not, by copy or demonstration, involve a material deception as to the product's characteristics, performance or appearance. As to competing products, advertising should refrain, by identification or other means, from discrediting, disparaging or unfairly attacking competitors or competing products, or other industries, professions or institutions. More specifically, it is stated that "bait-switch" advertising is unacceptable, and personal endorsement or testimonials shall be genuine and reflect personal experience, and contain no statement that cannot be supported if presented in the advertiser's own words. In connection with commercials in or near children's programs, it is stated that broadcasters should use special caution, avoiding exploitation and presenting only commercials which "in no way mislead as to the product's performance or usefulness." In connection with advertising of medical products, it is stated that this presents considerations of high importance because of the direct bearing on the consumer's health; and that claims of cure and indiscriminate use of words such as "safe", "without risk", "harmless", or similar terms should not be used. Physicians, dentists or nurses, or actors portraying them, are not to be employed directly or by implication in commercial announcements selling a particular product (the same applies to related professions, such as physical therapists and pharmacists); laboratory settings may be used if they have a direct relationship to bona fide research which has been done on the product. There are also specific provisions concerning avoidance of exaggerated employment claims in ads for institutions offering instruction, and concerning ads involving premiums and offers. n19

n18 Not all NAB member TV stations are Code subscribers, and some stations are subscribers but not NAB members.

n19 The Code also contains a number of provisions concerning advertising less immediately pertinent here, such as prohibition against some types (e.g., hard liquor and "tip sheets") limitations on others (e.g., beer and wine, cigarettes) and provisions concerning "good taste", e.g., in advertising concerning products of a personal nature.

20. The NAB Television Code Board and Authority conduct continuing activity in this area, including issuance of a periodic "Code News" inter alia informing subscribers of FTC complaints, orders and Trade Practice Rules and other industry-wide regulations, Court and Food and Drug Administration actions, as well as FCC actions. The Authority reviews commercials, declaring them acceptable or unacceptable; during the first9 months of 1968, 977 commercials were reviewed, representing 188 manufacturers, 443 products and 132 advertising agencies, with particular emphasis on toy advertising, ads for arthritis and rheumatism, ads involving "competitive disparagement", and those for weight-reduction products. Examples of commercials disapproved are those for a dandruff remover (claim of "positively controls dandruff" not adequately substantiated); a spray-on bandage (ad designed to appeal to children despite warning on the package to keep it away from children); a battery additive (documentation supporting claim of effectiveness in winterizing battery held inadequate); four commercials for an antacid (objectionable as involving self-diagnosis and treatment going beyond the Code limits); diet wafers (documentation insufficient and video demonstration misleading); and ulcer remedies (involving too much self-diagnosis and treatment for what is a serious condition). It appears that before reaching a decision of unacceptability, the Authority tries to get the manufacturer or agency to revise the commercial to make it acceptable; this is often done but was not in these cases. The November 1970 issue of the Code News listed 272 toy commercials which had been reviewed and (sometimes with suggested changes) approved during 1970.

21. The Code publications also include material of a general nature. For example, 1968 issues of the Code News contained the FTC's guidelines as to what kind of advertising of guarantees is acceptable (the description of the guarantee must be specific as to what is covered, duration, limitations, etc.), and a question and answer exposition of what claims are acceptable in the advertising of vegetable oil and margarine. The December 1970 Code News called attention to the FTC's pronouncement of October 1970, concerning what is an adequate "affirmative disclosure" in a television ad where such disclosure is required. n20 The Code Board and Authority have also issued general guidelines in certain product areas, concerning the types of claims which are proper or improper. These include toys, arthritis and rheumatism remedies, and -- February 1971 -- non-prescription drugs (designed to deal with the claimed connection between the lavish advertising of such products and the growing use of illegal drugs). These general guidelines are attached hereto as Appendices D-1, D-2 and D-3. The November 1970 Code News contained some rather specific interpretations of the toy-advertising guidelines.

n20 The disclosure should be simultaneous on both the audio and video portions of the advertisement; the video announcement should be in letters large enough to be easily readable on all sets, and contrasting with the background; no other sounds should be presented during the audio disclosure; the video announcement should last long enough to be read completely; the disclosure should be presented immediately after each presentation of the specific claim to which it relates; and it should be in language understandable to the audience to whom it is directed.

22. It also appears that the Code Authority does considerable monitoring of stations, to determine whether the various Code standards are being complied with. It does not appear how much of this relates to possibly deceptive advertising, and how much to observance of other types of standards, such as amounts of commercial time, "good taste", etc.

24. Activities of the Federal Trade Commission. It also appears that the TUBE petition may give an erroneous impression as to the extent of FTC activity in this area, even as of the time it was written. For example, the figures quoted in paragraph 9, above, as to the smaller number of FTC formal complaints and Orders issued after adjudicatory proceedings, may not take into account the extent of enforcement achieved otherwise: through "consent" Orders issued after complaint but without hearing, and, perhaps more important, voluntary and industry-wide actions, such as the promulgation of Industry Guides and Trade Regulation Rules, and the issuance of advisory opinions. In addition to the guidelines concerning permissible advertising of guarantees, mentioned above, general rules and guidelines proposed or adopted in recent years include those concerning the general subject of "deceptive pricing" (offering a particular product at less than a fictitious "going" or "regular" or "suggested retail" price); TV set advertising (picture size, etc.); tires ("first line", etc.); poisons (making the advertising conform to the warnings on the label); dog and cat food; watches (claims as to the number of jewels, material from which the case is made, and durability); glass fabrics and draperies (disclosure of possible hazards to skin from washing and handling); and radios (as to number of transistors). The FTC also has long done considerable monitoring of television and radio to check on possible deceptive advertising, in addition to its review of print advertising. It gets regularly from the three national networks a "staggered week" containing all of their commercials run on 7 days.

25. Whatever may have been the case at the beginning of 1970, certainly the TUBE petition gives an incorrect idea of the FTC's activity and effectiveness as of mid-1971. Since the time it was written, that agency has taken many steps to increase the extent and effectiveness of its activities aimed at protection of the consumer, including a sweeping reorganization and the formation of a new Bureau of Consumer Protection. Among its numerous other actions have been: (1) the inclusion in a number of orders proposed in complaints, and also in at least one consent order, of a provision requiring the advertiser involved to devote a substantial amount of his advertising over the next year to statements either that his product would not do what he had previously claimed it would do, or that the FTC has alleged his previous advertising to be deceptive; n21 (2) the adoption in June 1971 of a resolution which would require companies on an industry-wide basis to submit to the FTC the tests and other material which they allege support their specific advertising claims (starting with the automobile industry in the fall of 1971); (3) the public notice mentioned above (October 1970) concerning what constitutes an adequate "affirmative disclosure" announcement on television when such an announcement is required; and (4) the calling of a general conference on advertising, to begin this month, with particular emphasis on TV advertising.

n21 This type of remedy has been proposed, inter alia, in complaints issued against Continental Baking Co. (ITT) in connection with three of its products: Standard Oil Co. of California (Chevron); a sugar company. Continental Baking has consented to an order including such a provision in connection with one of the three products.

26. One point which is made by TUBE and has been urged by many others in the past is the delay involved in FTC matters, between the time it receives a complaint from the public and the time it issues a formal complaint, from issuance of a formal complaint until a final Order is entered, or, occasionally, after an Order but before full compliance is secured (the Geritol situation). Unquestionably, over the years this has been true in some situations where full-scale investigation is involved; this is one reason for the emphasis on consent proceedings, informal assurances of future compliance, and trade-practice rules and other industry-wide actions. n22 Another way of dealing with the problem, which the FTC has long sought from the Congress, is to enable the agency to seek injunctive relief against the advertising when it issues a complaint, on a broader basis than it now is able to do under the Federal Trade Commission Act. There have been other bills introduced in the Congress in recent years, some of which both the FTC and the FCC have supported, to create a new Federal agency particularly charged with the protection of consumers' rights.

n22 As far as the time between initial complaint and formal FTC action is concerned, sometimes the period is quite short, for example only slightly more than 4 weeks in a case involving TV advertising for a window-cleaner. The investigation began about July 15, 1970 and a "determination to issue complaint" was issued August 18, 1970. A consent order has since been issued. This degree of speed is probably unusual, but it demonstrates that delay is certainly not inevitable.

27. The TUBE petition deals with an area which is of high importance, the prevention of the occurrence on television of "deceptive advertising" -- designed to induce the viewer to purchase an advertised product or service on the basis of essentially false assumptions engendered by the advertising as to the product's usefulness, appearance, adequacy and freedom from harmful effects, and/or price. The presentation of deceptive advertising on television or radio, like anywhere else, is an evil, and in the case of broadcast stations represents pro tanto a substantial misuse of facilities operating on channels which are public property. Few, and certainly not this Commission, would argue about the importance of preventing such misuse, and of insuring (as far as possible) that the consumer buying an advertised product is getting a fair return for the money he spends after working hard to gather it, and that he is not led to rely on products which may not meet his needs when he should be seeking other forms of relief, as in the health field. These things have long been true, and they assume even greater significance in the present period, when there is increased awareness of the importance of protecting the consumer, in the field of general advertising as well as more particularized sales efforts such as direct-mail or door-to-door selling and the extending of credit. As indicated above, the Commission has long been concerned with matters in this area, and we have recently had occasion to consider it in connection with a specific complaint: Alan F. Neckritz and Lawrence Ordower (Complaint against KGO-TV et al., the Chevron decision), 29 FCC 2d 807 (May 12. 1971).

28. But in considering the TUBE petition, including the Examples discussed above, there are also other pertinent considerations and problems. The first of these relates to the avoidance of the censorship prohibited by Section 326 of the Communications Act, of infringement on free speech prohibited by the First Amendment to the Constitution, and of unwarranted Governmental intrusion into the preparation and presentation of broadcast material. There are indications that advertising is not protected to the same extent as other material under the First Amendment (Valentine v. Christensen, 316 U.S. 52 (1942)). The barring of advertising concerning illegal activities and enterprises is of course appropriate, e.g., the provisions of the U.S. Criminal Code concerning lottery information; and the same principle has been extended now into the area of broadcast advertising concerning cigarettes, a product which, while certainly not illegal, has been established to be generally harmful. There is not the same reason for restraint here as there was in our consideration of the question of "truth" and "fairness" in news and public event coverage, for example of the 1968 Democratic National Convention in Chicago. n23

n23 In our letter to the three national TV networks concerning this coverage, we stated:

"It is important that the public understand that the fairness doctrine is not concerned with fairness in this sense. This is not because such actual fairness is not important, but rather because its determination by a Government agency is inconsistent with our concept of a free press. The Government would then be determining what is the 'truth' in each news situation -- what actually occurred and whether the licensee deviated too substantially from that 'truth'." (Letter to ABC, CBS and NBC, FCC 69-192, 16 FCC 2d 650, 655, February 28, 1969).

29. But while advertising is not legally entitled to the same degree of protection from governmental evaluation as at least some other types of material, it is highly important, n24 both in broadcasting to the conduct of that medium as it operates under the American system, and in the print media to make possible their continued existence. Effective advertising presupposes a reasonably affirmative portrayal of the product; as mentioned, and we believe legitimately, the NAB TV Code recognizes that it is entirely appropriate to present a product "in a favorable light and atmosphere", as long as there is no deception. Moreover, we believe that, with respect to television advertising in particular, effective advertising presupposes a good deal of flexibility in its creation, and substantial measures of imagination and humor. While these values are probably secondary to the adherence to truth and avoidance of deception, nonetheless they are important and a substantial restraint on them is not to be taken lightly.

n24 We note in this connection the rather limited significance of the early FRC and FCC actions cited by petitioner and mentioned in footnote 12, above. The first two involved the well-known health broadcasts by Dr. John R. Brinkley; the third involves somewhat similar alleged remedies. Only in the first case was the license taken away, and the ground of decision was not so much the character of the material as the fact that the station was serving primarily as an adjunct to Dr. Brinkley's business activities, rather than being operated to serve the public.

30. There is also to be borne in mind the matter of providing some certainty to licensees, particularly in light of some of the examples set forth by TUBE, as discussed below. It is doubtless possible to write a rule barring deceptive advertising, and include in it all of the elements mentioned above, including nondisclosure of side effects or limitations, purely visual as opposed to aural or written misrepresentations, looking to the total impression rather than individual statements or other separate elements, and protecting the young, ignorant, unthinking and credulous as well as more sophisticated or skeptical members of the audience. But the problem still remains as to how this standard can be applied in any particular case by a licensee in deciding whether or not to accept a piece of advertising, so that he will know whether the advertising will be regarded as deceptive or as acceptable.

31. The third consideration is whether the problem, to the extent it exists, is such as to warrant action by this Commission in view of the other agencies and groups already active in this area, and our own limited manpower resources. With respect to governmental agencies, the Federal Trade Commission is the agency primarily responsible for the prevention of deceptive advertising generally, not only in the broadcast media but elsewhere. It has a long history of action and has developed expertise in the field, and, moreover, has a large part of its staff devoted exclusively to this activity. The Food and Drug Administration of the Department of Health, Education and Welfare is similarly active within its area of jurisdiction. We would certainly be bound by any determination these agencies should make, with respect to any particular advertisement which it covers.

32. However, notwithstanding these considerations, we recognize the importance of the objective sought by TUBE and referred to in paragraph 24, above, as well as our public-interest responsibility in the regulation of the tremendously persuasive medium of television. If this Inquiry and Rulemaking indicates that there is a substantial problem, and that other machinery cannot deal with it adequately, we will devote whatever efforts are possible to remedy the situation. We are posing a number of complementary and alternative rules, and may issue additional notices, or treat matters separately in one part at a time, if that procedure seems appropriate.

33. Discussion of the TUBE examples. One of the problems presented in this matter, and pertinent in connection with the foregoing discussion, is the nature of some of the material TUBE advances as deceptive and which should therefore be prohibited (paragraph 18, above, and Attachment 1). It is noted that none of the examples involves an actual affirmative false statement, which is perhaps the easiest form of deception to deal with. In some cases, the matter is one of visual techniques (the toy ads); in other cases it is a question of non-disclosure of limitations or harmful effects. We do not here pass on whether or not any of these ads are in fact deceptive; this would require a look at the commercial as it appears on television, or in some cases at least an assumption that TUBE's allegations as to the factual reality are true, which we do not make. See paragraph 17, above. With respect to two of them -- the second Anacin commercial, which TUBE claims misleadingly implies that the product can relieve tension beyond that resulting from headaches, and the Listerine commercial, which TUBE claims wrongly implies that the product helps prevent colds -- it appears less than certain that, to the average viewer, the ad would give this impression. On the other hand, if it is assumed that the cutter-slicer mentioned in fact performs as badly as TUBE claims, it may well be that the ad is deceptive if it gives the impression that it works easily and satisfactorily. The same is true of the toothpaste ad, which, if TUBE's assertion is correct, appears to fall short of adequate disclosure.

34. Thus, in sum, the group of examples set forth by TUBE present some problems and uncertainties. One of the chief purposes of the Inquiry detailed below is to obtain information as to how these uncertainties can be resolved, by this Commission to the extent it should become involved, and otherwise by other Government agencies and private parties.

35. Delays involved in determinations. It is apparent from the discussion of the TUBE petition, above, that one of the chief problems involved is that of delay -- for example, the delay between the time the FTC issues a complaint and the time a final cease-and-desist order is issued and appeal remedies, if pursued, have been exhausted. This presents a difficult problem. On the one hand, it is undesirable to permit clearly deceptive advertising to be presented during this sometimes long period, with the resulting economic and other detriment to the public. On the other hand, it is at least in some ways undesirable to impose premature restrictions on the presentation of material which may ultimately be deemed unobjectionable, particularly in view of the tremendous importance for advertisers of access to television. We invite comments on how these conflicting considerations can be resolved. In particular, we invite comments upon the question of whether it is appropriate to regard advertising as prima facie deceptive when the FTC has issued a complaint so charging, but before that agency has completed its processes and reached a decision. To some degree, our evaluation of the situation will depend on the extent to which other government agencies have, and exercise, the authority to seek injunctive relief.

36. This Commission's resources. As mentioned, one of the problems in this area is the limited resources of this Commission, which must be used in a multitude of activities in the broadcast area and elsewhere. Therefore, it is our hope, and our intention unless there is a substantial problem which cannot be dealt with otherwise, not to get involved in determinations of whether or not a given piece of advertising matter is false, misleading or deceptive, except in quite obvious situations. As indicated, there are other agencies and groups with a history of regulation of these matters, better equipped than we and with more expertise.

37. Conclusions. In view of the foregoing, we conclude that there is a problem in this area, that it may be substantial despite the efforts of other agencies and groups, and that action by this Commission beyond that undertaken at present may be necessary to deal with the problem and maintain the public interest. Therefore, we are inviting comment on the questions and proposed rules set forth below, in the Notice of Inquiry and Proposed Rulemaking. We particularly hope that knowledgeable parties will file thoughtful and detailed comments. These include other government agencies, the NAB, the television networks, licensees, advertising agencies and their associations, consumer groups and the public.

NOTICE OF INQUIRY AND PROPOSED RULEMAKING

38. In view of the foregoing, comments are invited, particularly from the persons and groups mentioned in paragraph 34, above, on the following questions and subjects:

(a) The 20 Examples contained in Attachment 1. Comments are invited on the material set forth in Attachment 1, including: (1) the extent to which it was actually presented as indicated, or if not how the presentation differed; (2) the extent to which the factual statements set forth by petitioner at the end of each example are true, e.g., that the slicer does not work easily and the blades frequently break; (3) the extent, if any, to which this material has been modified or withdrawn since its presentation as described, and, if so, whether this represented a determination that it was or might be deceptive (and if so by whom); and (4) whether the TUBE conclusion as to its deceptive character is correct.

(b) Other examples of deceptive advertising. Parties are invited to advance and discuss any other examples of television advertising they believe are or may be deceptive, or any advertisements which in their experience have presented this question, and give the same responses as in (a), above, and also information as to what proportion of all television advertising they believe raises questions in this respect.

(c) Criteria, guidelines and procedures used in evaluating TV advertising for possible deception. We seek information as to the extent to which, and how, the various pertinent elements of the industry evaluate TV advertising with respect to whether it is or is not possibly deceptive. The elements mentioned include the three national networks, the NAB and its Code Board and Authority, advertising agencies and associations, advertisers and associations, and individual TV station licensees. n25 Parties are asked to indicate: (1) the extent advertising is reviewed from this standpoint before it is accepted and broadcast, and by whom; (2) what procedures are followed in such review; (3) what general criteria or guidelines are used in such review, including the NAB Code and specific guidelines in particular areas, network guidelines. FTC-industry guidelines and Trade Regulation Rules, similar pronouncements by other Government agencies, or other material; (4) to what extent are more specific pronouncements used as a basis for evaluation, such as NAB rulings on the same or a similar commercial, FTC complaints against the same or similar advertisements or products, final FTC Orders holding this or similar advertising to be deceptive, or similar specific pronouncements by other Government agencies or others; (5) examples of the approval or disapproval of particular advertising following review, with a general indication of how much advertising is disapproved as deceptive or possibly so. Parties are requested to submit copies of general criteria, guidelines, etc., used in the evaluation process.

n25 It is noted in this connection that the examples set forth in the TUBE petition are stated to have been presented on network-affiliated stations in Washington, D.C., during the two months before the petition was filed in mid-January.

(d) Advertising after FTC complaint or Order. To what extent is advertising presented after it has been the subject of a complaint, but not adjudication, by the FTC or other government agency? To what extent is it presented after issuance of an FTC cease-and-desist Order, or similar holding by another agency? Parties are asked to comment, in this connection, on the significance of the Carter Pills and Geritol situations, mentioned in paragraphs 9 and 10, above.

(e) NAB sanctions. What sanctions does the NAB employ against TV stations which have presented commercials violating the NAB Code with respect to avoidance of deceptive advertising, and how often are they used?

(f) Consideration of complaints from viewers. Parties in the advertising and broadcast industries are requested to indicate what procedures they follow in considering and acting on complaints from viewers concerning deceptive advertising, including: (1) the approximate number of such complaints; (2) what procedures and standards are followed; (3) examples of the disposition of such complaints, including both action and non-action.

(g) Proof. To what extent do those responsible for the review of advertising to avoid deception require documentation or proof of claims made or effectiveness depicted, for example in connection with health or cure claims, or use of a product such as the slicer referred to in Example D-1?

(h) How deceptive advertising can be prevented promptly. Comments are invited on how deceptive advertising can be prevented before it occurs, or, at least, after only a short time and without waiting for a final FTC determination followed by appeal and Court decision, without running the risk of premature and unwarranted restriction. Parties are asked to comment on possible use, or extension, of the FTC's injunctive powers in this connection. We also seek comments on whether it is appropriate to treat advertising which is the subject of a complaint by the FTC or other Government agency, but not yet adjudicated, as prima facie deceptive.

(i) Appropriate action by the Federal Communications Commission. We seek information and views as to the appropriate role of, and actions by, the FCC in this area beyond the general pronouncements and liaison arrangements now in effect, n26 including:

n26 Parties commenting on this matter should deal with it in light of the various considerations discussed above, including the need for any FCC action in light of other Governmental agencies and groups already in the field, and the burden on the Commission, but, also, the public interest in avoiding deceptive broadcast advertising.

(1) Adoption of a general rule barring deceptive advertising on television, for example along the lines of Section II of Attachment 2 hereto, and possibly containing references to FTC complaints, NAB rulings, and other actions by other agencies and groups.

(2) Adoption of a more detailed "Advertising Primer" as suggested by TUBE (paragraph 16, above). Comments are invited on whether this would be helpful, how it could be written to take into account the very wide range of situations and concepts (such as visual impressions) not easily reduced to writing, who should undertake the work involved, and what the FCC's role in preparation should be.

(3) Adoption of reporting requirements for licensees as suggested by TUBE, including provisions in the renewal form as to their policies and practices in the deceptive advertising area, and possible log-keeping requirements under which all commercials would be individually identified and logged (paragraph 16, above).

(4) Creation of an Advertising Advisory Board as suggested by TUBE (paragraph 16, above), to which broadcasters could refer advertising in advance of broadcast. Comments are invited on whether such a Board would be helpful, and what persons it should consist of, specifically to what extent FCC and other Governmental agencies should be involved, or whether it should be entirely private, and, if so, to what extent its determinations could have the effect of an agency determination and form the basis of sanctions against stations presenting the advertising.

(5) Wider dissemination to licensees of both Governmental and non-Governmental actions in this area, including determinations by the National Association of Broadcasters and the three national television networks. Comments are invited on whether it is appropriate to adopt private determinations as a standard, either favorable or unfavorable.

(j) Additional proposed rules. In conjunction with this proceeding on television advertising, we propose to consider other rules which could have the effect of substantially improving the performance of commercial television advertising, and eliminate the criticisms and complaints about television advertising. Comments are invited on each of these proposed rules.

(1) Advertising for over-the-counter drugs would be banned from broadcast stations.

(2) National broadcast television advertising must be cleared with the Federal Trade Commission, under procedures established by that agency, before it is broadcast.

(3) No television station may broadcast more than eight minutes of advertising during a clock hour.

(4) Television advertising must be bunched on the hour and half-hour absent overriding considerations of damage to the continuity of a program.

(5) Television advertising must be factual and informative.

(6) Television licensees, as part of their renewal application, must file a statement describing in detail their affirmative program for achieving compliance with the 1961 Policy Statement. National television networks must file special annual reports describing their affirmative program.

(k) Applicability to radio. While the present proceeding is primarily concerned with television, comments on all of the above matters in connection with radio broadcasting are also invited, including discussion of whether the problems involved, and possible regulation, are significantly different in light of less centralized production of radio advertising and more "ad lib" commercials.

PROCEDURAL MATTERS

39. Authority for the institution of this inquiry is found in Sections 4(i), 303(g) and (4), 307(a), 309, and 403 of the Communications Act of 1934, as amended. We are setting fairly long periods for filing comments and reply comments herein, in hopes that the various parties will file informative and meaningful comments concerning these important subjects.

40. It is hoped and expected that the periods specified can be adhered to, at least as to advertising on television. Parties concerned with both television and radio advertising should concentrate initially on the television portion of their submissions, leaving radio for later.

41. Pursuant to applicable procedures set forth in Section 1.415 of the Commission's Rules, interested persons may file comments on or before , and reply comments on or before . All relevant and timely comments and reply comments will be considered by the Commission before final action is taken. In reaching its decision in this proceeding, the Commission may also take into account other relevant information before it, in addition to the specific comments invited by this Notice.

42. In accordance with the provisions of Section 1.419 of the Rules, an original and 14 copies of all comments, replies, pleadings, briefs, and other documents shall be furnished the Commission.

ATTACHMENT I

TOYS

Swingey Doll

Setting: A number of children of various heights all wearing party clothes are in a decorated party room. Rock music is playing, and all of the children are dancing. One little girl is dancing with the toy doll (holding the doll's hand as the doll is standing on a table). The doll is dancing, making various rock-type movements. The camera shoots quickly around the room back-and-forth to the doll and to various children dancing.

Lyrics: Come on see the swingingest dolly; she can swing while she's walking.

LITTLE GIRL: Come on Swingey; do your thing.

Lyrics: Come on Swingey; do your beat; shake your arms and shuffle your feet. Swing your head; Swingey do. Dance with Swingey and she dances with you.

NARRATOR: Swingey is the only doll that dances with you. Comes with her own record too. From Mattell.

Comment: The deception here is created by showing the doll in the context of human dancers. With the camera shots going rapidly back from the doll to the people and then back to the doll again, the viewr gets the false illusion that the doll has many human-like dance motions. The doll in reality has few motions which, when seen alone, are not nearly as attractive as when they are seen in the context and motion of the party shown in the commercial.

Dancerina Doll

Setting: Several small children about five years old are sitting in a living room watching the ballerina doll perform. The doll, held by a small girl, makes various ballet-like motions. Throughout the commercial the camera shoots to different angles of the doll. Tchaikovsky's "Nutcracker Suite" is being played in the background.

FIRST LITTLE GIRL: It's a beautiful doll; it's like a real ballerina.

SECOND LITTLE GIRL: I want a Dancerina.

SUPERIMPOSED VOICE: There never was a doll like Dancerina. Only you know the secret of the magic crown.

CHILDREN: Polite applause in response to the performance.

NARRATOR: Dancerina, the ballerina doll, from Mattell.

Comment: The deception here is created by the camera rapidly showing many different angles of the doll as it is dancing. This process gives the false illusion that the doll has many more realistic dancing motions than it actually has.

Johnny Lightning

Setting: Several small boys surround a race track. Dynamic music is playing in the background. The camera follows the cars and utilizes techniques that make the cars appear to slow down and speed up.

NARRATOR: Wow! It's long! Johnny Lightning, a ricochet raceway in five separate sets! -- with bank turns -- with giant loop-d-loop -- (slow motion and stop action technique employed here) -- with the incredible double jump through space -- with straight ahead super speed tracks -- with triple loop-d-loop! Two arches in every set which fit together -- accessory packs too. It's for the wildest ride! New Johnny Lightning Ricochet Set!

Johnny Lightning

Setting: Several small boys surround a race track. Dynamic music is being played in the background. The camera follows the cars and utilizes techniques that make the cars appear to slow down and speed up.

NARRATOR: Here come the 1970 Johnny Lightning Challengers! New triple threat three engine dragster -- the speed hungry spoiler... the bug bomb... the powerful smuggler... the sand stormer... the explosive TNT... and many more new models! They are beautiful, and they are fast. Race any other cars against the new Johnny Lightning Challengers, and see for yourself -- exciting new cars! Alone or in sets. From Johnny Lightning.

Comment: The deception in both these ads is caused by the impression, the speed of the sound track and the camera technique used. The cars seem to speed up while going around the arches and down the straightaways. The double jump (the car jumping over a break in the track) is shown in slow motion and stop action. Furthermore, the camera is focused upon the car itself. These techniques give the impression of greater size, speed, and ability of the toy. The total impression derived by the viewer is inconsistent with the actual performance of the toy.

ANALGESICS

Anacin

NARRATOR: When you have a headache, remember: Two Anacin tablets have more of the one pain reliever doctors recommend most than four of the other leading extra strength tablets. The others contain additional pain relievers and two is the recommended dosage, but two Anacin contain more of the specific pain reliever than four of the others. Today's Anacin.

Comment: Although not specifically stated, the "specific pain reliever" referred to in the ad is aspirin. Aspirin is the pharmaceutical agent the average consumer associates with the curing of headaches and tension and thus aspirin is what is naturally implied by the ad. All such tablets contain the same amount of "aspirin" and, thus the ad's comparison of two Anacin to four of the others is a misrepresentation of fact which the average consumer implies from the ad.

Anacin

NARRATOR: Anacin relieves headache pain and so relaxes its tension. Anacin.

Anacin

NARRATOR: Headache pain, stress, nerves, pain, its tension builds. There can be more to a headache than pain. Two Anacin tablets have more of the one pain reliever doctors recommend most than four of the other leading extra-strength tablets. The others contain additional pain relievers and two is the recommended dose -- but two Anacin contain more of this specific pain reliever than four of the others. Anacin.

Comment: The deception in these two ads is the result of a material misrepresentation of fact. These ads give the impression that Anacin will relieve tension. Doctor's studies reveal that it will not.

HOUSEHOLD GOODS

Veg-O-Matic

Setting: The Veg-O-Matic utensil is sitting on a counter top. Throughout the course of the commercial, all of the different functions of the machine are demonstrated with complete ease.

FIRST VOICE: Here is what we meant about Veg-O-Matic: It slices a whole potato in one stroke; turns whole onions into zesty thin slices for hamburgers; now turn the dial and slices are authomatically dices; the dial goes slice to dice and sliced onions become diced by the panful; dice carrots the same way; prepare celery for use this easily. Over five million Veg-O-Matics now in use; they must be good. And it's yours for just $7.77 -- Veg-O-Matic. Veg-O-Matics can slice a whole firm tomato like this in a stroke or make everybody's favorite, golden french fries -- hundreds -- in one minute. Veg-O-Matic; just $7.77. The perfect Christmas gift. Another great product from P.B.I.

SECOND VOICE: Order Veg-O-Matic while they last at Woodward and Lothrop. Free delivery, charge it.

Comment: This ad creates the false impression that this product cuts and slices with ease. However, it can be used only with a great deal of difficulty. The Veg-O-Matic does not cut smoothly at all -- food usually gets caught in the blades. In addition, the blades rarely make a complete cut, sometimes break, and are very difficult to clean.

Liquid Draino

Setting: Housewife is standing before a clogged drain. Her sink is full of water and scum. The plumber enters.

PLUMBER: Look at that clogged drain.

HOUSEWIFE: Willy, angel, I've tried. Yesterday one whole bottle of liquid drain cleaner. Today another.

PLUMBER: Tell you a secret. This one won't cut grease, but Liquid Draino sure does.

HOUSEWIFE: Just one capful?

PLUMBER: It's concentrated, works right through standing water. (Plumber pours into sink and scene immediately shifts to a perfectly clean and unclogged sink.)

HOUSEWIFE: Wow! It's unclogged! I'm spreading the word. If people use Liquid Draino in all their drains, they would never need plumbers.

Comment: The deception lies in the pouring of Liquid Draino into a sink full of water and the immediate switch of the picture to a clear sink -- implying that Liquid Draino is so powerful that: (1) it can work to clear a drain through any obstacle, (2) it will work first time, (3) it will work immediately.

Miracle Brush

NARRATOR: Miracle brush with its new patented nylon head removes every particle of dirt and lint instantly. Always brush in direction of arrow. Rotating the head enables you to brush both ways. Removes knots from sweaters in only seconds. Miracle Brush removes all types of pet hair easily. Removes all foreign material. Starts working when other brushes give up. To clean -- simply brush backwards. Never needs a refill and sells for only $2.99.

Comment: The implication derived from the totality of the advertisement's claims is inconsistent with the products true performance.

ENZYME DETERGENTS

Ajax

Setting: A mother and her son are by her washing machine. The son's shirt is filthy. An Ajax salesman arrives and goes through a dialogue with the mother. During the dialogue, the detergent is put in the washing machine, along with the boy's dirty shirt; after a short passage of time, the shirt is taken out, very clean.

MOTHER: For once, one of you guys is going to prove your product works. Look (pointing to boy's shirt): mud, grass stains, egg yolk, beef gravy.

SALESMAN: Here, new Ajax.

MOTHER: Ajax? Oh, it's stronger than dirt.

SALESMAN: Now, with Enjax, it gets out harder to clean stains, too.

MOTHER: A good thing for both of us.

Comment: The deception in this ad is the omission of various facts. First, enzyme detergents require that the clothes be pre-soaked, often overnight, before washing. Second, the enzymes only act on certain types of stains (protein base stains). Third, once the enzyme action starts, it often doesn't stop, leaving acidlike burns in the clothes.

Drive

Setting: Delivery man enters kitchen of housewife just as she spills food all over the tablecloth.

HOUSEWIFE: Good morning! (spilling of food). Oh, look at those stains! These stains are so bad. It'll have to go to the professional laundry (enters the animated blue dot, representing enzymes in Drive).

DOT: Wrong! Take it to this professional, Drive. Drive has me. I'm the professional stain remover professionals use. Drive is loaded with professional stain eaters (picture of enzymes eating stains). Drive eats strawberry jam from flowered percale; egg stains, even off orlons. Drive eats orange juice, even from acrylics; not to mention yellowing from pillowcases or blood stains. Drive eats stains, but not favrics or colors.

HOUSEWIFE: Why it looks like new (removes tablecloth from washing machine). You said it, Drive is the professional.

DOT: Thank you, my lady. Because Drive has me, a professional stain remover laundrys use. From now on there's only one kind of cleaning for you and that's Drive professional clean. Buy Drive professional detergent, the professional.

Comment: For explanation of deception, see E-1.

Fab

Setting: The scene takes place in or near a home: The scene shifts as each person speaks. The women are housewives; the men are laborers.

FIRST WOMAN: I'm glad because now my wash is as clean and as fresh as all outdoors.

First man/: I'm glad because now Mary doesn't care how dirty I get.

SECOND WOMAN: I'm glad because now these stains wash out.

SECOND MAN: Glad! My wash cleans brightest.

NARRATOR: It's new Fab -- the only detergent with lemon-freshened Borax and active enzymes to remove stains.

SINGING VOICE: They're always doing something good to Fab, it's true. Oh Fab we're glad they put active enzyme, lemon-freshened, Borax in you.

Comment: For explanation of deception, see E-1

Axion

NARRATOR: If you should get a bloodstain on top of the usual dirt on a collar, should you throw the shirt away? No! You soak it in Colgate's new Axion. The enzyme active pre-soak that soaks out dirt and stains that detergents can't wash out and bleaches can't bleach out. Now this shirt had a bloodstain pre-soaked in Axion before detergent washing. No more stain. That's why you should try Colgate's new Axion.

Comment: For explanation of deception, see E-1

Oxydol

NARRATOR: How would you get these stains out? You'd need new Oxydol Plus -- now a bleach detergent with an enzyme pre-soaker in it. For a better clean -- better because what the enzyme pre-soaker can't get out the bleach can, and what the bleach can't get out, the enzyme pre-soaker can. New Oxydol Plus! For a better clean.

Comment: For explanation of deception, see E-1

Gain

NARRATOR: John, would you come over here please?

FISH MERCHANT: Yes.

NARRATOR: We're here at the San Pedro Wharf where the fish bloodstains put on John's apron are a day old. Look! Set in, locked in bloodstains.

BYSTANDER: And they're dired in too.

NARRATOR: Virtually impossible for the conventional detergents, but not for the unbelievable detergent. New Gain with micro-enzyme action from Proctor and Gamble. Gain does a better job on stains. Actually unlocks them.

BYSTANDER: By itself? How's it work?

NARRATOR: You see, stains are locked into fabric fibers. But Gain's enzymes act like little keys to unlock those stains biologically. Gain gets clothes unbelievably clean.

BYSTANDER: It does!

NARRATOR: Look, set in, dried in bloodstains virtually gone, gone, gone.

BYSTANDER: Unbelievable.

NARRATOR: Yes everything is unbelievably clean with the unbelievable detergent -- Gain. Gain treats stains like dirt.

Comment: For explanation of deception, see E-1

La France

NARRATOR: Have you noticed what's been going on between pre-soaks and bleach. It's called competition. Enters new enzyme La France -- the one that works without pre-soaking. It whitens and brightens better than bleach, and it removes stains faster than pre-soaks -- all in the wash cycle. New enzyme La France for whitening, it's better than bleach and for removing stains, it's faster than pre-soaks. New enzyme La France!

Comment: For explanation of deception, see E-1

Goodyear Tires

Setting: A parking lot scene. It's snowing and the wind is blowing. A car is shown in the snow, the wheels are spinning and two men are trying to push the car. Another person walks past the car to his car in the parking lot. He gets in and drives off through the snow without the slightest problem.

NARRATOR: If you can get to your car, we can get you home, on Goodyear Suburbanite Polyglas Tire -- wider than our conventional winter tire. Hundreds of deep cleats pull you. Polyglas tires wear longer. If you can get to your car: Goodyear can get you home.

Comment: In addition to a dangling comparative (Polyglas tires wear longer), this ad is deceptive in the impression derived from the totality of the setting: A car in the snow will slip, slide.

Listerine

Setting: Children are shown coming in the front door wet and cold. Mother greets them, and sends them upstairs.

MOTHER: O.K. upstairs and gargle with Listerine -- you're soaking wet.

CHILD: Does Listerine keep me dry?

MOTHER: No silly. It's colds I'm worried about. We can't really stop 'em, but this year we're going to fight back with lots of sleep, good food, and gargle twice a day with Listerine. I bet that'll help keep you in school.

CHILD: Do grown-ups do this too?

MOTHER: Of course we do.

NARRATOR: This cold season, fight back, with Listerine Antiseptic.

Comment: This is deceptive because the implication derived from the totality of the ad is that Listerine will aid in preventing colds. This it cannot do.

Ultra-Brite Toothpaste

SONG: "Ultra-Brite Toothpaste, the one with sex appeal."

NARRATOR: An Ultra-Brite smile is a healthy smile because regular brushing with Ultra-Brite means the freshest breath, the brightest teeth. Helps prevent cavities, too!!

SONG: Ultra-Brite gives your mouth sex appeal.

NARRATOR: For a healthy smile, get Ultra-Brite, the sex appeal toothpaste.

Comment: Ultra-Brite is harmful because it contains abrasives which remove enamel from teeth. Therefore, the ad deletes a material health factor, thus concealing a harmful side effect of the product.

Geritol

WOMAN: Would you believe, I found out I have iron poor blood?

ANIMATED BLOOD: I know I'm your iron poor blood -- I'm pale and out of shape.

WOMAN: What can I do?

BLOOD: Take Geritol. Geritol changes iron-poor blood into iron rich blood.

NARRATOR: Geritol iron enters your blood stream fast -- carrying its blood building iron throughout your body. Just two Geritol tablets contain twice the iron in a pound of calf's liver -- plus seven vitamins for nutrition.

BLOOD: Look at me now! Geritol changed me from iron-poor blood to iron-rich blood.

NARRATOR: If iron-poor blood is your problem, take Geritol. It carries blood building iron throughout your body.

WOMAN: Why don't you try Geritol too?

Comment: This ad implies that Geritol is a panacea for iron-poor blood. This is not true. There are several causes of iron-poor blood that are not remedied by this product.

Chux Diapers

Setting: A Chux diaper and a "similar disposable" diaper are placed next to each other. The narrator pours some water on each. The diapers are then picked up to show that the water soaked through the "similar disposable diaper."

NARRATOR: We have a most absorbing story for you about new softer disposable diapers. Take a similar disposable and new Chux. Pour the same amount of water on each. What happens? The other disposable absorbs some water. Chux absorbs it all because Chux concentrates thickness in the center where it's needed most. And of course Chux has a deep dry lining and water proof backing. New Chux -- a most absorbing story.

Comment: The deception is that the implication derived from the comparison is falacious. The comparison implies that similar disposable diapers do not have the keep-dry lining or water proof backing when in fact some of them do. It is this backing that prevents the diaper from allowing the water to pass through it.

ATTACHMENT 2

CODE OF STANDARDS

I. General Statement and Considerations

A. This proposed code establishes basic standards which define and regulate deceptive advertising on television. The code develops principles of aesthetic and ethical considerations and incorporates criteria which identify misleading advertisements. The intent is to foster Commission acceptance of its regulatory obligations and maximum utilization of current enforcement policies.

B. Broadcast licensees have certain responsibilities and obligations to the public in relation to media advertising.

1. Advertising messages should be presented with courtesy and good taste and function in accordance with the highest standards of ethical sensitivity, acceptability, and discretion in regard to the average viewing public.

2. Broadcast licensees must understand the great impact and affect of media advertising upon the general public, especially children and youth.

3. Concern for the public good and well-being should take precedence over considerations of economic expediency and institutional or individual advantage.

II. General Standards for Deception in Media Advertising

A. Criteria for the regulation of deceptive media advertising concerns identification of deceptive advertisements as to their ability to deceive, the applicability of the deception, and the method of deception.

B. Elements of deceptive advertisements:

1. An advertisement which has the tendency or capacity to deceive the average viewing public is proscribed.

2. Proscribed deception applies to the misrepresentation of a product's characteristics, performance, and/or appearance.

3. Proscribed deception applies to the methods of achieving misrepresentation in advertising:

(a) Misrepresentation of facts to induce the purchase of goods.

(b) Misrepresentation as to the implications derived from the totality of the deceptive advertisement.

III. Enforcement

The Commission shall, upon reasonable notice, take appropriate action against licensees who fail to comply with the provisions of these standards. Appropriate action by the Commission is limited to only those sanctions provided for in the Communications Act.

ATTACHMENT 3

Federal Communications Commission, Washington 25, D.C., Public Notice -- B (F.C.C. 61-1316), November 7, 1961

LICENSEE RESPONSIBILITY WITH RESPECT TO THE BROADCAST OF FALSE, MISLEADING OR DECEPTIVE ADVERTISING

1. The first issue of a new Federal Trade Commission publication, "Advertising Alert," is enclosed with copies of this Notice which are being mailed to all broadcast licensees. The Federal Communications Commission and the Federal Trade Commission have undertaken this program believing that it will be of great benefit to all broadcasters in assisting them to fulfill their obligation to sift out fraudulent and deceptive advertising matter, to the Commissions themselves in their respective enforcement activities, and eventually to the general public. Subsequent issues of the "Alert," to be mailed directly by the Federal Trade Commission on a regular basis, will bring to all broadcast licensees notice as to advertising matter which is the subject of corrective action by FTC. In addition, the "Alert" will frequently discuss in considerable detail a particular problem area with which the FTC is concerned. These discussions and notices wil familiarize licensees with various deceptive practices so that they will be able to recognize them and take appropriate steps to protect the public against them.

2. As you know, the Commission has always held that a licensee's duty to protect the public from false, misleading or deceptive advertising is an important ingredient of his operation in the public interest. In its Report and Statement of Policy re: Commission En Banc Programming Inquiry dated July 29, 1960, the Commission set forth the responsibility with regard to false and misleading advertising in the following terms:

"Broadcasting licensees must assume responsibility for all material which is broadcast through their facilities. This includes all programs and advertising material which they present to the public. With respect to advertising material the licensee has the additional responsibility to take all reasonable measures to eliminate any false, misleading or deceptive matter... This duty is personal to the licensee and may not be delegated."

It is the hope of this Commission and of the FTC that the program here instituted will be of assistance to licensees in carrying out this responsibility.

3. The "Alert" will contain information pertaining to Complaints and Orders which have been issued by the Federal Trade Commission. If there is submitted to a licensee advertising matter which has been the subject of an FTC Complaint, he should realize that, although no final determination has been made that the advertising in question is false or deceptive, a question has been raised as to its propriety, and he should therefore exercise particular care in deciding whether to accept it for broadcast. On Order issued by the Federal Trade Commission against an advertiser, which has become final, is a formal determination by that agency that the particular advertising in question is false or deceptive. Should it come to this Commission's attention that a licensee has broadcast advertising which is known to have been the subject of a final Order by the FTC, serious question would be raised as to the adequacy of the measures instituted and carried out by the licensee in the fulfillment of his responsibility, and as to his operation in the public interest.

4. In this regard, particular attention is directed to the fact that licensee responsibility is not limited merely to a review of the advertising copy submitted for broadcast, but that the licensee has the additional obligation to take reasonable steps to satisfy himself as to the reliability and reputation of every prospective advertiser and as to his ability to fulfill promises made to the public over the licensed facilities. The fact that a particular product or advertisement has not been the subject of Federal Trade Commission action in no way lessens the licensee's responsibility with regard to it. On the contrary, it is hoped that the information received from these "Alerts" will make it possible for licensees to recognize questionable enterprises, claims, guarantees, and the like, and where deemed inappropriate for broadcast, to bring them to the attention of the Federal Trade Commission for possible further investigation.

5. The Commission hopes that this program will help licensees in carrying out their responsibilities and we will welcome any comments and suggestions as to how it is felt this program might be enhanced so as to enable licensees to give greater protection to the public and thus render an even more valuable service to their communities.

ATTACHMENT 4

NAB CODE AUTHORITY -- TOY ADVERTISING GUIDELINES, SECOND EDITION

Children, especially pre-schoolers, are highly dependent on the guidance and direction of the adult world around them -- television included -- for their individual development. Since younger children are not in all situations able to discern the credibility of what they watch, they pose an ethical responsibility for others to protect them from their own susceptibilities. Recognizing this, The Code Authority of the National Association of Broadcasters issues the second edition of the Toy Advertising Guidelines designed to assist manufactures, their agencies, and broadcasters in the preparation and evaluation of radio and television commercials.

I. Dramatic Representation

A. Seek

1. To place the toy in a framework of a play environment performing in a way accurately representing the toy.

2. Movements and setting for the toy which a child is reasonably capable of reproducing.

3. To employ the complete and authentic (sounds) of the toy.

4. To employ actions and encourage habits that are consistent with generally recognized standards of safety.

B. Avoid

1. Demonstrations, dramatizations or use of animation that show the toy in a manner that is not authentic.

2. Demonstrations suggesting attributes not inherent in the toy as purchased.

3. Dramatizations from real life staged without clearly qualifying their relationship to the toy.

4. "Overglamorization of the product via large displays, dazzling visual effects, stock film footage, sounds of the toy's real-life counterparts, whether in real-life simulation or such devices as fantasy."

(Amendment of December 1965)

5. Dramatization of the toy in a realistic war atmosphere.

6. Dramatization which could frighten or scare children.

7. Demonstrations of a toy in a manner that encourages harmful use or dramatizations of children's actions inconsistent with generally recognized standards of safety.

II. Sense of Value

A. Seek

1. To employ price only if it can be supported as the usual and customary price in a substantial number of retail outlets in the given trade area or areas where the advertising is scheduled.

2. To present the toy on its actual merits as a plaything.

B. Avoid

1. Representing the price of a toy in any amount which is not the usual and customary price in a substantial number of retail outlets in the trade area or areas where the representation is made.

2. Oversimplification such as "only" and "just" applied to the price of a toy.

3. Presumptions that a toy requiring a material investment can be had for the asking.

4. Appeals contending that, if a child has a toy, he betters his peers or, lacking it, will invite their contempt or ridicule.

III. Methods of Presentation

A. Seek

1. An approach to advertising which does not exaggerate or distort the play value of a toy.

2. To establish clearly what constitutes the original purchases of the toy, employing, when necessary, positive disclosure on what items are purchased separately.

3. Positive disclosure when items such as batteries needed to operate a toy ad demonstrated in the advertising are not included.

4. Positive disclosure as to a toy's method of operation and source of power.

5. Positive disclosure when a toy requires assembling.

B. Avoid

1. Employing irritating audio or video techniques to demand the child's attention.

2. Any implication that optional extras, additional units or items that are not available with the toy accompany the toy's original purchase.

3. "Costumes and props which are not available with the toy as sold or reasonably accessible without additional cost to the child."

4. Demonstrations which create the impression that a toy comes fully assembled when such is not the case.

(Amendment of December 1965)

NAB CODE AUTHORITY -- ARTHRITIS AND RHEUMATISM ADVERTISING GUIDELINES

A large number of people in this country suffer from some form of arthritis and rheumatism. Many have the potentially serious form of these diseases which results in progressive cripping.

Medical science is striving to deveop as soon as possible techniques for cure or total prevention. In the meantime, the treatment of these conditions must depend on early professional diagnosis, competent and continued treatment under medical advice and supervision.

Recognizing this, the Code Authority of the National Association of Broadcasters issues the Second Edition of the Arthritis and Rheumatism Guidelines designed to assist advertisers, their agencies, and broadcasters in the preparation and evaluation of radio and television commercials.

Here are the specific Guidelines:

Seek -- Audio and Video

1. Positive disclosure that the effectiveness of a product, in its recommended dosage or application, is limited to the temporary relief of minor aches and pains of arthritis and rheumatism.

2. Product performance claims and video dramatizations consistent with limitations and directions for product use as shown on labeling.

3. Substantiation of such product performance claims based upon bona fide clinical studies, testimony of medical experts qualified by experience and training or adequate references to medical literature.

4. To advise sufferers of arthritic or rheumatic aches and pains to see a physician for proper guidance and care.

Avoid -- Audio and Video

1. Any implication that a product, in its recommended dosage or application as shown on labeling, will do more than give temporary relief of minor aches and pains; references to treating the cause or in any way having an effect on the disease process.

2. Any implication that a product will reduce inflammation and swelling; claims that a product will restore complete function to crippled joints; before and after comparisons demonstrating a dramatic, marked improvement of mobility; use of such terms as "agonizing" and "torture."

3. Any implication that the product will work where others have failed. Claims of effectiveness implied by copy such as "secret discovery," "like magic" or "miracle drugs."

4. Use of clinical studies not based upon adequate number of cases, not employing controls and accurate statistical analysis of the results, as substantiation of product performance claims.

5. Use of testimonials to support product claims that cannot also be substantiated by bona fide clinical studies, testimony of medical experts qualified by experience and training, or adequate references to medical literature.

6. Any claims that products such as bath salts and food supplements, in themselves, are effective in the relief of minor aches and pains of arthritis and rheumatism.

(Second Edition, Revised July 1965)