Reading list: empirical evidence about FTC’s substantiation standard

Sungho Cho &Yongjae Kim, Empirical Rationalization of
Prior Substantiation Doctrine: Federal Trade Commission v. Reebok &
Sketchers, 29 Loy. Consumer L. Rev. 55 (2016) (not apparently available online—update
that website, Loyola Consumer Law Review!)
ABSTRACT

Companies frequently make efficacy claims in advertisements
to introduce new products featuring innovative technology. When such claims are
supported by information obtained from scientific research or expert
testimonials, they are subject to the doctrine of prior substantiation. Under
the doctrine, an advertisement claim based on seemingly credible authorities
must be substantiated by a reasonable basis before it is released to the
general public. Otherwise, the advertisement will be in violation of Section
5(a) of the Federal Trade Commission Act that prohibits “unfair or deceptive
acts affecting commerce.” This study investigates the rationale of the legal
rule in light of consumer behavior theories. While the doctrine has been
normatively rationalized, it has not been empirically examined. Given the
paucity of relevant research, this study will test consumer attitudes and
cognitive reactions toward different types of advertisement messages, such as,
one with establishment claims and the other without such cognitive contents.
The study administered real advertising video clips used by Reebok and
Sketchers, disputed in two settled cases where the Federal Trade Commission
alleged that the defendants failed to satisfy the legal standard of the
substantiation rule. The findings of this study support the rationale of the
rule on the ground that the Reebok advertisement clip delivering expressive
establishment claims about its product efficacy would likely have more of an
immediate impact on consumers’ purchasing intention than Sketchers’ ad without
such cognitive information. Implications and future research along with limitations
are also discussed.

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