06 November 2009

What are your First Amendment Rights?

First Amendment Allowable Restrictions on Advertising

The Supreme Court has held that the government may ban forms of commercial communication, without violating the speaker’s freedom of speech, if the communication is “more likely to deceive the public than to inform it, or commercial speech related to illegal activity.” See Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n, 447 U.S. 557 (1980).

But, commercial speech that is neither misleading, nor related to illegal activities, cannot be banned or restricted unless the Court’s three part test (from the Central Hudson case) is satisfied.

1) the state must have a “substantial” interest
2) the restriction must be directly related to the state’s interest - it cannot be speculative, or theoretically related; and
3) the restriction cannot be excessive - or, if there is a more limited way to meet the state’s interest, excessive restrictions on speech are unconstitutional

The Supreme Court has struck down advertising bans aimed at protecting children that also keep commercial speech from reaching adults. In 2001, the court struck down a Massachusetts regulation that prohibited outdoor advertising of tobacco products within 1,000 fee of a school or playground. See Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001). The outdoor advertising restrictions failed the final prong of the Central Hudson test - the restriction was not a “reasonable fit between the means and ends of the regulatory scheme.”

The state failed to show that the outdoor advertising regulations were “not more extensive than necessary to advance the State’s substantial interest in preventing underage tobacco use.” The Court also stated that because the purchase and use of tobacco products by adults is legal, the interest of tobacco retailers and manufacturers in conveying truthful information to adults must be considered.
“the governmental interest in protecting children from harmful materials . . . does not justify an unnecessarily broad suppression of speech addressed to adults… a speech regulation cannot unduly impinge on the speaker’s ability to propose a commercial transaction and the adult listener’s opportunity to obtain information about products.”
Self Imposed Industry Advertising Codes

In response to the threat of costly FTC investigations, the alcohol industry has devised self regulating advertising codes for its members. The FTC then uses these advertising codes to determine if an advertiser has violated the FTC Act (disseminated advertising that is unfair or deceptive).

One of the requirements in the alcohol industry’s various codes is that 70% of an ad’s viewers must reasonably be over the legal drinking age. Originally, the standard was at 30%. Recently, the FTC has considered raising the requirement to 85%.

Keep in mind, that the requirement is contained in self imposed standards, rather than through legislation or regulations created by the FTC. The standard, however, is imposed on alcohol advertisers in a back-handed way. Rather than directly promulgate regulations, the FTC, essentially, requires advertisers to self impose the requirement.

Many of the alcohol industry’s advertising codes would not pass the Supreme Court’s tests for unreasonable restrictions on commercial speech. But, while the government cannot unreasonably inhibit useful advertising claims aimed at legal purchasers in its attempt to protect children, an advertiser can voluntarily restrict its speech.

This is one of the reasons FTC’s authority and position in alcohol advertising has not been challenged. The FTC has not created legislation on the matter. There is little standing to challenge the constitutionality of a government restriction on speech.

If the FTC does begin to require an 85% standard, this might effectively prevent alcohol advertisers from advertising in certain traditional media formats. If this does become the standard, how long will it be until, like tobacco product advertisers, alcohol advertisers are completely prohibited from advertising on TV or other forms of media? It is a slippery slope, and alcohol advertisers should consider the potential future ramifications of adopting more and more restrictive advertising codes.
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