Federal Trade Commission v. Colgate-Palmolive Co.

Background

A consumer agency (the Federal Trade Commission) challenged television ads made for a shaving cream by a company and its advertising agency. The ads showed a “sandpaper test” in which a razor appeared to shave a surface after Rapid Shave was applied. Evidence showed the surface was a plexiglass mock-up coated with sand and that real sandpaper required about 80 minutes of soaking. The FTC found the commercials deceptive and issued a cease-and-desist order. A court of appeals rejected the FTC’s original broad ban on mock-ups, the FTC narrowed its order, and the appeals court again refused to enforce the mock-up prohibition. The Supreme Court agreed to decide whether undisclosed simulations that create the impression of visual proof are deceptive.

Reasoning

The central question was whether it is deceptive to represent that viewers were seeing an actual test or demonstration when a mock-up was used. The Court accepted the FTC’s factual finding that the ads conveyed three messages, including that viewers were seeing objective proof, and held that the third message was false. The Court explained that any false fact that materially induces purchases may be a deceptive practice, even if the underlying product claim might be true. The opinion relied on prior advertising cases and gave weight to the FTC’s judgment while emphasizing that courts define the legal standard. The record was found adequate to support the Commission’s findings.

Real world impact

Advertisers may not present undisclosed simulated tests as if viewers saw real, objective proof. The FTC may issue broad cease-and-desist orders covering similar future ads by the same advertisers when warranted. Advertisers can seek FTC advice about proposed commercials under the agency’s rules. The judgment reverses the appeals court and remands for enforcement of the FTC’s order, with practical limits on certain televised demonstrations.

Dissents or concurrances

A partial dissent argued that mock-ups are not deceptive per se if the image on the viewer’s screen accurately represents the product, and that the record did not justify so broad a remedial order; that justice would remand for further proceedings.