Research · 7 min read
What Federal Law Calls a False Advertisement
The FTC Act has a definition written specifically for advertisements of food, drugs, devices, services and cosmetics. It reaches what an advertisement fails to say as well as what it says, and it carries a criminal provision that turns on injury to health.
Key takeaways
- 15 U.S.C. 52 forbids disseminating a false advertisement likely to induce the purchase of food, drugs, devices, services or cosmetics, and declares that dissemination an unfair or deceptive act under the Act's general prohibition.
- The definition at 15 U.S.C. 55(a)(1) is an advertisement, other than labeling, misleading in a material respect — the labeling exclusion is part of the text.
- The assessment expressly covers design, device and sound as well as words, and covers the failure to reveal material facts.
- There are two omission tests: facts material in light of the representations made, and facts material to consequences of use under prescribed or merely customary conditions.
- 15 U.S.C. 54 attaches a misdemeanor where use may be injurious to health under prescribed or customary conditions, or where the violation was with intent to defraud or mislead.
- Publishers, broadcast licensees, media and advertising agencies sit outside that criminal provision only so long as they identify the party behind the advertisement when the Commission asks.
Answer first: a defined term, a separate prohibition, and a bridge back to the main statute
Most discussion of advertising law runs through the general prohibition on unfair or deceptive acts or practices. But for a specific set of products, the FTC Act contains a second, narrower structure, and it is the one that reaches health advertising most directly.
The prohibition is at 15 U.S.C. 52. It makes it unlawful for any person, partnership, or corporation to disseminate, or cause to be disseminated, any false advertisement by United States mails, or in or having an effect upon commerce, by any means, for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase of food, drugs, devices, services, or cosmetics.
The section then bridges back. The dissemination, or the causing to be disseminated, of any false advertisement within those provisions shall be an unfair or deceptive act or practice in or affecting commerce within the meaning of section 45 of the title — the Act's general prohibition.
So this is not a parallel universe. It is a defined route into the same prohibition, with its own definition of the thing being prohibited and its own list of the products it covers.
One detail in the product list is easy to skip. The word services was inserted after devices in both paragraphs of subsection (a) by a 1994 amendment, according to the amendment notes printed with the section. A program of care is not only a product question.
The definition, and the half of it people forget
The definition sits at 15 U.S.C. 55(a)(1), and it opens simply. The term false advertisement means an advertisement, other than labeling, which is misleading in a material respect.
The exclusion in the middle of that sentence is doing real work — other than labeling. Labeling is governed elsewhere, which is why the same words on a carton and on a web page can be assessed under different rules.
The rest of the paragraph is an instruction on how to make the assessment, and it has two halves. In determining whether any advertisement is misleading, there shall be taken into account, among other things, not only representations made or suggested by statement, word, design, device, sound, or any combination thereof — that is the half most people quote, and it already covers imagery and audio, not just text.
The second half covers silence. The assessment must also take into account the extent to which the advertisement fails to reveal facts material in the light of such representations, or material with respect to consequences which may result from the use of the commodity to which the advertisement relates under the conditions prescribed in said advertisement, or under such conditions as are customary or usual.
Read that carefully and there are two distinct omission tests. One is relative to what the advertisement itself claimed: facts material in light of those representations. The other is absolute, and about use: facts material with respect to consequences from using the thing — not only as the advertisement directs, but under conditions that are merely customary or usual.
The same paragraph carries a narrow carve-out for one audience. No advertisement of a drug shall be deemed false if it is disseminated only to members of the medical profession, contains no false representation of a material fact, and includes, or is accompanied in each instance by truthful disclosure of, the formula showing quantitatively each ingredient of such drug. Every condition in that sentence has to hold, including the only.
What counts as a drug, a device, and a food for this purpose
Section 55 defines its own product terms, and they are not identical to the ones used in ordinary speech.
A drug means articles recognized in the official United States Pharmacopoeia, the official Homoeopathic Pharmacopoeia of the United States, or the official National Formulary, or any supplement to any of them; articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals; articles other than food intended to affect the structure or any function of the body of man or other animals; and articles intended for use as a component of any of those. It does not include devices or their components, parts, or accessories.
That third clause is the one that catches people. An article intended to affect the structure or any function of the body is a drug for this definition, and intent is established by how the thing is presented.
A device is defined in parallel — an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or similar article, including any component, part or accessory, that is recognized in the official National Formulary or United States Pharmacopeia, or intended for use in diagnosis, cure, mitigation, treatment or prevention of disease, or intended to affect structure or function — and then separated from drugs by mechanism: it does not achieve any of its principal intended purposes through chemical action within or on the body and is not dependent upon being metabolized for the achievement of any of its principal intended purposes.
Food means articles used for food or drink for man or other animals, chewing gum, and articles used for components of any such article. Cosmetic means articles to be rubbed, poured, sprinkled or sprayed on, introduced into, or otherwise applied to the human body or any part of it, intended for cleansing, beautifying, promoting attractiveness, or altering the appearance, and components of such articles, excluding soap.
The criminal provision, and the condition that triggers it
Section 54 is the part of this structure that people rarely read, and its opening condition is specific to health.
Any person, partnership, or corporation who violates any provision of section 52(a) shall — if the use of the commodity advertised may be injurious to health because of results from such use under the conditions prescribed in the advertisement, or under such conditions as are customary or usual, or if such violation is with intent to defraud or mislead — be guilty of a misdemeanor.
Two independent triggers sit in that sentence, joined by an or. One is potential injury to health from use under prescribed or customary conditions. The other is intent to defraud or mislead. Either will do; neither requires the other.
The section then states its penalties: upon conviction, a fine of not more than $5,000 or imprisonment for not more than six months, or both; and for a conviction after a first conviction for any violation of the section, a fine of not more than $10,000 or imprisonment for not more than one year, or both. Those are the amounts the section itself prints. Federal fine levels are also addressed by general provisions elsewhere in the Code that were not consulted for this page, so no current figure is asserted here.
Subsection (b) carves out the middlemen, conditionally. No publisher, radio-broadcast licensee, or agency or medium for the dissemination of advertising — other than the manufacturer, packer, distributor or seller of the commodity — is liable under this section for disseminating a false advertisement, unless it has refused, on the request of the Commission, to furnish the name and post-office address of the manufacturer, packer, distributor, seller or advertising agency who caused the dissemination. A parallel sentence applies the same conditional shelter to advertising agencies with respect to naming the manufacturer, packer, distributor or seller.
The shape of that carve-out is worth noticing. It is not an immunity. It is an exchange: the intermediary is out of the criminal provision as long as it will identify who is behind the advertisement when the Commission asks.
How this fits with everything else on a health page
This structure explains a few things that otherwise look inconsistent.
It explains why an advertisement's silence is analyzed as part of the advertisement. The definition instructs that the failure to reveal material facts be taken into account, so an omission is not outside the text being examined — it is inside it.
It explains why the same sentence can be judged differently in two places. The definition excludes labeling, so a claim on a package and the same claim in a promotion are not assessed under the same provision.
It explains why product category matters so much in this corner of the law. Section 52 lists food, drugs, devices, services and cosmetics, and section 55 defines four of those terms with their own boundaries, including a structure-or-function clause in the drug definition that turns on intended use rather than composition.
And it explains why the criminal provision reads oddly next to the rest of the Act. Section 54 does not apply to every false advertisement. It applies where use may be injurious to health under prescribed or customary conditions, or where there was intent to defraud or mislead.
What none of it does is tell a reader that a particular advertisement is a false advertisement, or that anyone has violated anything. Those are determinations made on a specific record by a court or by the Commission, and nothing here asserts, implies or predicts one.
Sources
- 15 U.S.C. 52 — Dissemination of false advertisementsThe prohibition on disseminating or causing to be disseminated any false advertisement by United States mails or in or having an effect upon commerce, for the purpose of inducing or likely to induce the purchase of food, drugs, devices, services or cosmetics; the provision declaring such dissemination an unfair or deceptive act or practice within the meaning of section 45; and the amendment note recording that services was inserted after devices in 1994.
- 15 U.S.C. 54 — False advertisements; penaltiesThe misdemeanor provision and its two alternative triggers — that use of the commodity may be injurious to health because of results from use under the conditions prescribed in the advertisement or under conditions customary or usual, or that the violation is with intent to defraud or mislead; the penalty amounts the section prints for a first and a subsequent conviction; and the conditional exclusion of publishers, radio-broadcast licensees, advertising media and advertising agencies where they furnish, on the Commission's request, the name and post-office address of the party who caused the dissemination.
- 15 U.S.C. 55 — Additional definitionsThe definition of false advertisement as an advertisement, other than labeling, misleading in a material respect; the instruction to take into account representations made or suggested by statement, word, design, device, sound or any combination, and the extent to which the advertisement fails to reveal facts material in light of those representations or material with respect to consequences of use under prescribed or customary conditions; the conditional exception for drug advertisements disseminated only to members of the medical profession; and the definitions of food, drug, device and cosmetic, including the structure-or-function clause in the drug definition and the chemical-action and metabolism distinction that separates devices from drugs.
Frequently asked questions
What is the statutory definition of a false advertisement?
15 U.S.C. 55(a)(1) defines it as an advertisement, other than labeling, which is misleading in a material respect. The same paragraph directs that the assessment take into account representations made or suggested by statement, word, design, device, sound or any combination, and the extent to which the advertisement fails to reveal material facts.
Which products does this reach?
15 U.S.C. 52 covers advertisements likely to induce the purchase of food, drugs, devices, services, or cosmetics. The amendment notes printed with the section record that services was inserted after devices in 1994. Section 55 supplies its own definitions of food, drug, device and cosmetic.
Does an omission count?
The definition says the assessment takes into account the extent to which an advertisement fails to reveal facts material in light of its representations, or material with respect to consequences which may result from use of the commodity under the conditions prescribed in the advertisement or under conditions that are customary or usual.
Is there a criminal penalty?
15 U.S.C. 54(a) makes a violation of section 52(a) a misdemeanor if the use of the commodity advertised may be injurious to health because of results from use under prescribed or customary conditions, or if the violation is with intent to defraud or mislead. The section prints a fine of not more than $5,000 or up to six months, and after a first conviction not more than $10,000 or up to one year. Federal fine levels are also governed by general provisions elsewhere in the Code that are not addressed here, so no current amount is asserted.
Are publishers and advertising agencies liable under that provision?
Section 54(b) says a publisher, radio-broadcast licensee, or agency or medium for disseminating advertising — other than the manufacturer, packer, distributor or seller — is not liable under that section unless it has refused, on the Commission's request, to furnish the name and post-office address of the party who caused the dissemination. A parallel sentence applies to advertising agencies.
Is a supplement or program a drug under this definition?
The definition in 15 U.S.C. 55(c) includes articles other than food intended to affect the structure or any function of the body, alongside articles intended for use in diagnosis, cure, mitigation, treatment or prevention of disease. Whether a particular article falls inside it depends on intended use as established on the facts, which this page does not decide for anything.