When we think about advertising law and regulation, we typically focus on Washington, D.C. and the federal regulatory agencies – for example, the FTC’s guidance, including in many industry-specific areas, the FDA’s regulation of food products and cigarettes, and the Consumer Financial Protection Bureau’s efforts of late in the financial services sector, among others. But state Attorneys General are also very active in the enforcement of consumer protection and advertising laws and regulations, both independently within their jurisdictions and jointly through multi-state investigations and actions. The increased presence of many advertisers in digital and social media does not have geographical borders, and state regulators can take issue with the advertising claims and methods used in these new media platforms along with more traditional ones.
State Attorneys General offices use consumer protection laws and regulations to help shape public policy and improve communications to consumers, but they are also subject to, and driven by, the partisan politics of elections and the complex webs of relationships that operate day-to-day in state governments. This can mean national advertisers may face state regulation from a number of different angles.
The Way I See It
- I see state Attorneys General becoming increasingly active in enforcing consumer protection laws, with increased initiatives to regulate online, mobile, and social media.
- I see state regulators initiating investigations and taking action in response to national advertising campaigns, which have an impact on consumers within their states and which may not comply with the letter of each particular state’s unique laws and regulations. There is a greater need than ever to carefully consider these nuances when vetting national advertising materials.
- I see a complicated political structure in each state when it comes to interpreting regulators’ motives and actions, and a symbiosis between the actions and interests of federal regulators and their state counterparts.
The Way The Industry Sees It
I sat down with Al Shelden, Ex-Senior Assistant Attorney General of California who was in charge the state’s Consumer Law Section, to get a state regulator’s perspective on some key consumer protection issues.
As a former state regulator, how important do you think state Attorneys General are for shaping regulation of national advertisers and big brands? How did you view national advertising campaigns during your tenure in California?
The state Attorneys General have a long history of shaping the regulation of national advertisers and big brands. Starting in the ’80s and ’90s, the states were the first to challenge “health” advertising by cereal, fast food, and vitamin companies. We also were the first to challenge the use of deceptive environmental claims in advertising. The FTC and Congress followed. Today the states are leading the way in actions against pharmaceutical companies for off label promotion of drugs. The states’ actions and adoption of legislation against the deceptive use of sweepstakes and other product promotions also preceded federal action in these areas. Likewise, actions brought by the Attorneys General involving improper telephonic solicitations and advertisers’ improper use of information they obtained from customers lead to the adoption of telephonic seller registration, do not call and privacy protection laws, first on a state level and then on the national level. Since national advertising in California affects tens of million California residents, we always viewed it, and still do, as “local” advertising, meaning that any advertising which is used to obtain business from California residents must comply with California law.
What has been the historical relationship between the Federal Trade Commission and state Attorneys General? What is the current relationship like?
Historically, the relationship has been one of benign neglect, conflict, and cooperation. In the 1960’s, when those states that did not yet have consumer protection laws started to adopt them, a large portion looked to the FTC and the FTC Act. During the ’60s and ’70s, the FTC and the Attorneys General “got along” but seldom regularly worked together on issues. Starting in the early ’80s, things between the Attorneys General and the FTC became somewhat “testy” when, under Chairman James Miller III, the FTC adopted its “deception” and “unfairness” policies. Many states thought these policies incorrectly defined FTC case law requirements for advertisers and argued they should only be viewed as the FTC’s own enforcement guidelines. Because some states’ laws tie the meaning and interpretation of their laws to FTC regulations and decisions, there was great concern. One state, Missouri, changed its consumer law so that it was no longer tied to FTC law. Things remained cold until Janet Steiger became FTC Chair in 1989. She worked tirelessly to reach out to the Attorneys General and convince them that going forward the Attorneys General and the FTC needed to be trusting partners who should be working together toward the same goals. Her term marked the true beginning of the Attorneys General and the FTC working cases jointly, sharing information and deferring to one another in the proper circumstances. Improving relations continued under Robert Pitofsky’s tenure and while there have been periods of ebb and flow since then, things again were very harmonious during Jon Leibowitz’s term as Chair and David Vladek’s term as Head of the Bureau of Consumer Protection. There appears to be no reason to think that such cooperation will not continue during the term of Edith Ramirez as Chair.