FTC Staff Provides the FDA with Comments On First Amendment Commercial Speech Doctrine

In response to a request for public comment by the U.S. Food and Drug Administration (FDA), on September 13, 2002 the FTC staff filed a comment concluding that "in executing our mission, we have found that the First Amendment commercial speech doctrine is fully compatible with our vigorous consumer protection program." The FDA requested comments addressing whether its regulations, guidelines, policies, and practices comply with First Amendment case law in light of recent judicial decisions. The comment, prepared by the staff of the Federal Trade Commission's Bureaus of Consumer Protection and Economics and Office of Policy Planning, provides a detailed analysis of the FTC's law enforcement activities. It also discusses the empirical evidence on the benefits to consumers from the free flow of true and non-misleading commercial information that the First Amendment's Commercial Speech Doctrine seeks to promote.

In a Federal Register notice published on May 16, 2002, the FDA stated that "recent case law has emphasized the need for not imposing unnecessary restrictions on speech." Accordingly, it solicited comments from regulatory agencies and others to "help [FDA] continue to protect the public health, while giving full recognition to evolving judicial decisions."

According to the FTC staff comment, which is available on the Commission's Web site as a link to this release, ". . . the analysis that the courts have applied to assess the constitutionality of restrictions on commercial speech stands as a model for an approach to consumer protection that the Commission has used successfully in its efforts to prevent or halt the deceptive marketing of food, drugs, dietary supplements, and other health-related products and services."

"The commercial speech doctrine recognizes the importance of consumer access to truthful and accurate information. On the other hand, inaccurate or misleading claims have no protection under the First Amendment and need to be purged from the marketplace to protect and enhance the value of the free flow of truthful information. In practice, consumer protection agencies often must choose between the risk of allowing commercial speech that might prove to be false or misleading and the risk of banning commercial speech that might prove to be true."

The comment describes the FTC's experience in considering these risks in connection with the marketing and advertising of products that legally can be sold. The FTC's enforcement approach "focuses on deceptive speech, favors requiring more information over banning information, and avoids broad restrictions limiting both deceptive and non-deceptive speech," and, therefore, the restrictions the agency imposes are "more likely to survive constitutional challenge."

The comment does not take a position on the constitutionality of any specific FDA statute, regulation, policy, or practice, or suggest revisions to FDA's regulatory framework. Moreover, recognizing the differences between the FDA's public health mandate to ensure the safety and efficacy of drugs and other products and the FTC's mandate to prevent deceptive, misleading, or unsubstantiated claims, this comment does not address the substantive standards used by FDA to determine whether to allow the sale of products. Rather, the FTC's experience is relevant to the marketing and advertising claims made for products already approved for sale.

The staff summarized their comments in the following points:

• In executing [the FTC's] mission, we have found that the First Amendment commercial speech doctrine is fully compatible with our vigorous consumer protection program. The FTC requires that all claims be true, non-misleading, and substantiated at the time they are made. The FTC's post-market review of advertising claims and application of tailored remedies in advertising cases curb deception without overly restricting truthful commercial speech, thus promoting the goals embodied in the First Amendment.

• The FTC's approach to advertising for products like foods, over-the-counter (OTC) drugs, and dietary supplements, while generally consistent with that of the FDA for these products, is also understandably more flexible, allowing a broader range of claims so long as they are accurate and not misleading. The Commission's law enforcement approach seeks to ensure that products and services are marketed in a manner that is truthful and not misleading, and that consumers have adequate information to make well-informed purchasing decisions.

• In practice, consumer protection agencies often must choose between the risk of allowing commercial speech that might prove to be false or misleading and the risk of banning commercial speech that might prove to be true. In making these decisions, the Commission's approach takes account of the sensitivity of certain kinds of claims. For example, the Commission has particularly rigorous substantiation requirements for health and safety claims. The Commission recognizes, of course, that even these rigorous standards require vigorous enforcement when false and misleading advertising occurs. Available evidence suggests, however, that the general benefits of an enforcement approach that encourages dissemination of truthful information, while vigorously attacking misleading claims when they occur, produces benefits for consumers.

• Striking the right balance depends on the nature of the claims and the risks that result from deception. Applicable First Amendment law looks in part to the availability of less restrictive alternatives, such as mandated disclosures, in assessing the legality of outright bans on potentially misleading commercial speech.

• Although disclosures can qualify claims in many instances, there are also limitations to their use. For example, accurate information in the text may not remedy a false headline; fine print written disclosures may be insufficient to correct a misleading representation; other practices of the company may direct consumers' attention away from the qualifying disclosures; and pro forma statements or disclaimers may not cure otherwise deceptive messages or practices. Disclosures are most effective if they are clear and prominent, focusing on specific elements such as clarity of language, relative type size and proximity to the claim being qualified, and an absence of contrary claims, inconsistent statements, or other distracting elements.

• Empirical evidence suggests that if consumers receive more and better information about nutrition and health, consumers are able to make better-informed choices about the food products they purchase. This, in turn, creates economic incentives for companies to develop healthier food products to satisfy consumers. Consumers thus would benefit if the FDA expanded its use of regulatory approaches that allow the dissemination of truthful and non-misleading claims about the nutrient content and health benefits of foods.

• The FDA's current approach to direct-to-consumer advertising of prescription drugs has permitted an increase in the flow of truthful information about these products to consumers, and available empirical evidence suggests that this approach may benefit consumer welfare.

In concluding the comment, the FTC staff wrote, "Like the balancing that is central to the commercial speech doctrine, the Commission's law enforcement actions under its own mandate strike a balance that is rigorous enough to attack deception, yet flexible enough to encourage accurate claims." A key aspect of that flexible approach, the staff continued, "is the emphasis on remedies that favor disclosures and qualification over outright bans. The FTC staff believes that its experience in policing advertising and labeling claims may assist the FDA in its efforts to conform its own regulatory practices to the First Amendment, while still advancing its important mission to protect and promote public health."

The Commission vote authorizing staff to issue the comments in response to the FDA's request was 5-0.

NOTE: The views expressed in the letter are those of the staff of the FTC's Bureaus of Consumer Protection and Economics and the Office of Policy Planning, and do not necessarily represent those of the Commission or any individual commissioner.

Copies of the comment to the FDA are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. V020021)