Critical Thinking Excerises 16-7 Deceptive advertising hurts consumers and competitors alike, and the Federal Trade Commission

Critical Thinking Excerises

16-7

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Deceptive advertising hurts consumers and competitors alike, and the Federal Trade Commission has stepped up efforts to combat it. Discuss a recent example of deceptive advertising by the FTC and one investigated by the industrly self-regulatory body, the National Advertising Division (NAD). (AACSB: Communication; Use of IT; Reflective Thinking). Explain.

Expert Answer

In 2014, In its national advertising campaigns such as in the print media, tv, radio, internet and social media, L’Oréal USA, Inc. claimed that its Génifique products were “clinically proven to boost genes’ activity and stimulate the production of youth proteins that would cause visibly younger skin in just 7 days”. FTC considered this absurd and false to say that cosmetics products could alter the activity of genes and thus took charge against L’Oréal USA, Inc. for deceptive advertising. L’Oréal had also failed to support its claim of altering gene activity to stop aging.

In a more recent example of 2016, the NAD took action against People’s magazine and Joyus – an e-com platform. Joyus included their advertisement under one section of the magazine which showed a link“Stuff We Love”. When one clicked that link, it redirected to a list of items from Joyus and commercial videos by the native advertisers. The objection of NAD was that the customers could think about the contents of the ‘Stuff We Love’ link as the list of endorsed products by the People’s magazine. Joyus argued that they had included their logo in all the products and ads and people could easily understand and identify them. However, NAD took decisions against them by saying that there should have been more disclosure to prevent such deceptions.

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