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Laws related to advertising

Advertising & Marketing

Advertising Law

Good marketing is critical to the success of your business. Marketing has many dimensions, including market research, pricing, advertising, packaging and labeling, distribution and customer service. Investing in a good marketing plan will generate excellent returns.

But there's more to a winning marketing plan or advertising campaign than a profitable product or service. Unfair, untruthful or purposely deceptive advertising can result in costly penalties. The resources below provide information on how to legally advertise your small business:

  • Truth-in-Advertising Laws

    Advertising laws are aimed at protecting consumers by requiring advertisers to be truthful about their products and to be able to substantiate their claims. All businesses must comply with advertising and marketing laws, and failure to do so could result in costly lawsuits and civil penalties. So before you start an advertising campaign, it's important you understand some basic rules.

    The Federal Trade Commission (FTC) is the main federal agency that enforces advertising laws and regulations. Under the Federal Trade Commission Act:

    • Advertising must be truthful and non-deceptive;
    • Advertisers must have evidence to back up their claims; and
    • Advertisements cannot be unfair.

    Additional laws apply to ads for specialized products like consumer leases, credit, 900 telephone numbers, and products sold through mail order or telephone sales. State and local governments also regulate advertising, and enforcement is usually the responsibility of a state attorney general, a consumer protection agency or a local district attorney.

    The following resources and how-to guides help small business owners comply with federal advertising laws:

    General Information

    Pricing Rules

    Endorsements and Testimonials

    State and Local Advertising Laws

    Individual states and some localities have also passed specific truth-in-advertising laws. The Consumer Action Handbook provides links to state and local agencies responsible for enforcing truth-in-advertising and related consumer protection laws.

  • Product Labeling

    The label and packaging on products you create and/or sell are forms of advertising. The claims make on product packaging must comply with some basic truth-in packaging and labeling rules. These claims include descriptions of ingredients, package size and volume, and discount or lower price labeling. Under the Fair Packaging and Labeling Act (FPLA), the Federal Trade Commission (FTC) and the Food and Drug Administration (FDA) issue regulations requiring all consumer commodities be labeled to disclose net contents, identity of the product, and name and place of business of the product's manufacturer, packer, or distributor.

    General Product Labeling Rules

    Labeling Rules for Specific Products

    Food Advertising and Labeling

    • FDA Guide for Labeling and Advertising
      This guidance is intended to clarify for applicants the requirements for product name placement, size, and prominence in labeling and advertising for human and animal prescription drugs and biological products.The FDA regulates food labeling in the United States and also has authority over the labeling of dietary supplements, cosmetics, drugs (both prescription and over-the-counter), medical devices, devices that emit radiation, animal foods, drugs and cosmetics. The FDA regulates both the nutritional labeling of food products, but also the advertising of food and drugs.
    • Dietary Supplements : An Advertising Guide for Industry
      Advertisers must comply with laws concerning unfair or deceptive practices and must be able to substantiate claims made for dietary supplements.

    Appliances and Electronics

    Textiles

  • Online Advertising Law

  • An old cartoon in the New Yorker showed two dogs in front of a computer, and had the caption "On the Internet, Nobody Knows You're a Dog." The inherent anonymity of the Internet has fostered a number of shady advertising and marketing practices, such as unsolicited e-mail spam. Over the past decade, federal and state governments have passed additional advertising laws that protect consumer privacy and ensure fair and truthful advertising practices online. If you plan to advertise online -- whether you're buying ads on search engines or direct marketing through e-mail -- you'll need to understand some basic rules.

    • Advertising and Marketing on the Internet : Rules of the Road
      Discusses the applicability of federal advertising laws to Internet advertising and marketing.
    • Dot Com Disclosures : Information about Online Advertising
      This fact sheet describes information businesses should consider as they develop online ads to ensure that they comply with the law.
    • CAN-SPAM Act : Requirements for Businesses
      The CAN-SPAM Act of 2003 (Controlling the Assault of Non-Solicited Pornography and Marketing Act) establishes requirements for those who send commercial email, spells out penalties for spammers and companies whose products are advertised in spam if they violate the law, and gives consumers the right to ask emailers to stop spamming them. Commercial e-mail messages must include notice that the message is an advertisement or solicitation, an opt-out notice, and a valid postal address of the sender. CAN-SPAM also prohibits falsification of transmission information and deceptive subject headings. The Act creates criminal prohibitions against those who knowingly transmit spam through others' computers without authorization. Also, the Federal Trade Commission may pursue individuals who knowingly hire others to send deceptive spam.
    • "Remove Me" Responses and Responsibilities
      Claims that you make in any advertisement for your products or services, including those sent by email, must be truthful. This means that you must honor any promises you make to remove consumers from email mailing lists.

  • Advertising Specific Products

    The federal government regulates the advertising and labeling of a number of consumer products. If you manufacture or distribute one of the products below, you will need to comply with some specific requirements.

    Alcohol Beverages

    Automobiles

    Computers and Internet Services

    • Advertising and Marketing on the Internet : Rules of the Road
      These Federal Trade Commission rules and guidelines protect businesses and consumers - and help maintain the credibility of the Internet as an advertising medium.
    • CAN-SPAM Act : Requirements for Commercial Entities
      The CAN-SPAM Act of 2003 (Controlling the Assault of Non-Solicited Pornography and Marketing Act) establishes requirements for those who send commercial email, spells out penalties for spammers and companies whose products are advertised in spam if they violate the law, and gives consumers the right to ask emailers to stop spamming them.
    • Dotcom Disclosures
      This booklet describes the information businesses should consider as they develop online ads to ensure that they comply with the law.

    Health and Fitness Products

    Housing and Real Estate

    • Advertising Consumer Leases
      If you advertise consumer leases, your ads must comply with the streamlined rules for lease advertising found in the Consumer Leasing Act (CLA) and Regulation M.
    • Fair Housing Advertising
      The provisions of the Fair Housing Act make it unlawful to discriminate in the sale, rental, and financing of housing, and in the provision of brokerage and appraisal services, because of race, color, religion, sex, handicap, familial status, or national origin.

    Telephone Services

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