FTC Staff Comment Before the New Jersey State Board of Dentistry Concerning Proposed Advertising Regulations

BUREAU OF
CONSUMER PROTECTION
UI'ITED STATES OF AMERICA
FEDERAL TRADE COMMISSIO~
\l. ASHII'GTO~":, 0 C. 20~80
'JiliMfSSruH AUTHORiZfD
v8700l7 ..
July 	14, 	1987
Mr. 	William 	Gutman
Executive 	Secretary
New 	Jersey 	State 	Board 	of 	Dentistry
1100 	Raymond 	Boulevard, 	Room 	321
Newark, 	NJ 	07102
Dear 	}~r. 	Gutman:
The 	staf!' 'of 	the 	Federal 	Trade 	Commission 1 	is 	pleased 	to
offer 	these 	cbJnments 	in 	response 	to 	your 	invitation 	of 	June 	15,
1987, 	for 	public 	views 	on 	the 	advertising 	regulations 	proposed 	by
the 	New Jersey 	State 	Board 	of 	Dentistry 	("the 	Board").
As 	you 	may 	know, 	we 	commented 	two 	years 	ago 	on 	an 	earlier
version 	of 	those 	proposed 	reg~lations.2 	We 	suggested 	then 	that
the 	~oard remove 	a 	number 	of 	provisions 	that 	restrained
no~deceptive advertising. 	The 	proposed 	new 	regulations 	would
eliminate 	several 	of 	the 	prohibitions 	that 	we 	fou~d 	troublesome
in 	the 	1985 	rules. 	We 	support 	the 	new 	rules 	with 	respect 	to
these 	ch~nges, 	but 	we 	must 	reiterate 	our 	concerns 	about 	other
provisions 	that,still 	appear 	to 	restrict 	advertising
unnecessarily.
Advertising 	is 	beneficial 	to 	consumers 	because 	it 	prOVloes
info~ation about 	the 	individu~ls or 	firms 	offering 	ser"vices 	that
they 	may 	wish 	to 	purchase. 	This 	inforru~~ion f~cilit~tes purchase
decisions 	that 	reflect 	true 	consumer 	preferences, 	and 	promotes
the 	efficient 	delivery 	of 	services. 	The 	proposed 	regulations
wi:.: 	give 	dentists 	significantly 	greater 	freedom 	to 	advertise.
~he} 	will 	lift 	the 	existing 	bans 	on 	~he advertising 	of 	free
sen/ices, 	on 	the 	use 	of 	formats 	that 	~re 	essentially 	"non-
inforT.\ational 	in 	nature 	and 	used 	primarily 	to 	gain 	attention,"
aPld 	on 	the 	advertising 	of 	"non-routine" 	services. 	We 	believe
these 	changes 	will 	broaden 	the 	scope 	of 	useful 	information 	th~t
dentists 	may 	dissem~nate, and 	will 	thereby 	bene:~t consumers.
1 	These 	comments 	represent 	the 	views 	of 	the 	Federal 	?rade
co~~ission's Bureaus 	of 	Consumer 	Protection, 	Economics, 	anj
Competition, 	anc 	do 	no~ necess~rily represent 	the 	views 	of 	~he
co~~ission itself 	or 	of 	a~y 	individu~l Corr~issioner. 	The
Comm~ssion, however, 	has 	voted 	~o 	au~horize the 	SUbffiission 	of
these 	COlnments.
2 	Letter 	to 	Rober~ J. 	Siconolfi 	from 	Carol 	T. 	Cr2wford,
March 	19, 	1985 	(herein~fter "C:::-a ....'ford 	2.etter").
Bicentennial of the r::ited States Consti,utiorl
(l'iS'i·l9S'i)

Vnfortunat~ly, 	the 	proposed 	rules 	still 	retain 	provisio~s
that 	unnecessarily 	inhibit 	truthful 	advertising. 	For 	exareple, 	the
rules 	prohibit 	claims 	of 	superiority, 	limit 	the 	use 	of
testimonials, 	require 	that 	advertisemen~s list 	the 	names 	of 	all
principals 	or 	partners 	in 	the 	practice, 	and 	require 	burdenso~e
affirmative 	disclosures. 	We 	recommend 	that 	the 	Board 	consider
eliminating 	these 	and 	other 	provisions 	in 	its 	proposed 	rules 	that
restrict 	the 	use 	of 	truthful, 	nondeceptive 	advertising.
A. 	Inte:::.-est 	and 	EXDerlence 	of 	the 	Federal 	Trade 	COT:'tmisslon
The 	Federal 	::::.-ade 	Commission 	is 	empowered 	u~der 15 	U.S.C.
§§ 	41 	et 	gQ..:... to 	prevent 	unfair 	methods 	of 	competition 	and 	unfair
or 	deceptive 	acts 	or 	practices 	in 	0:::'- 	affecting 	commerce. 	Pur-
suant 	to 	this 	s.t.::tutory 	mandate, 	the 	Commission 	has 	attempted 	to
encou:::.-a;e 	compe:':it-ion 	among 	mer.~ers of 	licensed 	professions 	to
the 	maximum 	extent 	compatible 	with 	other 	legitimate 	state 	and
federal 	goals. 	For 	several 	years, 	the 	Commission 	staff 	has 	been
investigating 	the 	competitive 	effects 	0: 	restrictions 	on 	the
business 	practices 	of 	state-licensed 	professionals, 	inclUding
dentists, 	optometrists, 	la~~ers, physic~ans, and 	others. 	Our
goal 	has 	been 	to 	identify 	and 	recommend 	~he 	removal 	of 	restric-
tio~s.that impede 	competition 	and 	increase 	cos~s without
pro',riding 	significant 	cou~~ervail\ng benefits 	to 	consumers.
As 	a 	part 	of 	the 	co~~ission's efforts 	to 	foster 	competition
among 	licensed 	p:::.-ofessionals, 	it 	has 	examined 	the 	effec~s of 	pub-
lic 	and 	private 	~estrictions that 	limit 	the 	ability 	of 	profes-
sio~als to 	engage 	in 	nondeceptive 	adve:::.-tising. 3 	stUdies 	suggest
that 	prices 	for 	professional 	goods 	and 	services 	are 	lOwer 	where
3 	See,~, 	American 	Medical 	Assln, 	94 	F.T.C. 	701 	(l979),
aff'd, 	638 	F.2d 	443 	(2d 	Cir. 	1980), 	affld 	meIL 	bv 	an 	eauallv
divided 	Court, 	455 	U.S. 	676 	(1982). 	The 	thrust 	of 	the 	~y~
d~cision -- 	"that 	broad 	bans 	on 	advertising 	and 	soliciting 	are
inconsistsnt 	with 	the 	~ation's pUblic 	policy" 	(94 	F.T.C. 	at 	~Oll)
-- 	is 	consiste~t with 	the 	reaso~ing of 	rece~t Supreme 	Court 	deci-
slons 	involving 	professional 	reg~lations. 	See,~, 	Zauderer 	v.
Of~ice of 	Discipli~ary Counsel 	c: 	the 	Supreme 	Co~rt of 	otio, 	471
U.S. 	626 	(1985) 	(::-:olding 	that 	c.:-: 	attor~ey 	may 	no~ be 	discipli~ed
fer 	soliciting 	legal 	business 	t~~ough printed 	adver~isi~g co~
taining 	truthful 	and 	nond:=:cepti\~ infe:-mation 	a:ld 	:::-egarding 	the
legal 	:::-ights 	of 	potential 	clien~s 0:::- 	for 	using 	nondeceptive
illustratio:ls 	or 	pictures); 	Bates 	v. 	State 	Bar 	of 	Arizona, 	433
U.S. 	350 	(1977) 	(holdi::g 	invalid 	a 	sta'te 	suprer.:e 	cou:::-t 	pro-
r.i~ition on 	adve:::-tising 	u~der the 	:irst 	;~en~~ent and 	according
~rec't i~portance to 	the 	rcle 	0: 	adve:::-tisi:lg 	~n the 	e::icie~t
:unct:.ioning 	of 	the 	:mar}:et 	for 	p:::-o::essional 	se::-vices); 	Virginic.
S~ate Board 	e: 	P~arn,acy v. 	Vir~i~ia Citizens 	Co:;sumer 	cou::cil,
C~5 V.S. 	748 	(19/6) 	(holding 	i:,:2.1id 	c. 	Virginia 	prohibi~io:J 0:;
a:'.·ertising 	by 	phc.:-macists) .
2

advertising 	exists 	than 	~here it 	is 	restricted 	or 	prohibited.~
Although 	some 	concern 	has 	been 	voiced 	that 	advertising 	may 	lead
to 	lower 	quality 	services, 	the 	empirical 	evidence 	suggests 	that
advertising 	restrictions 	raise 	prices 	but 	do 	not 	increase 	the
quality 	of 	goods 	and 	services. 5 	Therefore, 	to 	the 	extent 	that
nondeceptive 	advertising 	is 	restricted, 	higher 	prices 	and 	a
decrease 	in 	consumer 	welfare 	may 	result.
We 	have 	examined 	various 	justifications 	that 	have 	been
offered 	for 	restrictions 	on 	advertising 	and 	have 	concluded 	that
these 	arguments 	do 	not 	warrant 	restrictions 	on 	truthful, 	non-
deceptive 	communications. 	For 	this 	reason, 	we 	believe 	that 	only
false 	or 	deceptive 	advertising 	should 	be 	prohibited. 	Any 	othQr
standard 	is 	likely 	to 	suppress 	the 	dissemination 	of 	potentially
useful 	informati.on 	and 	contribute 	to 	an 	increase 	in 	prices.
\ I
B. 	ProhibitioLs 	on 	Communication 	of 	Price 	Ir;formation
It 	is 	particularly 	im~ortant that 	advertisers 	be 	able 	to
communicate 	about 	price 	in:o~ation freely. 	The 	Board's 	proposed
rules 	are 	desirable 	insofar 	as 	they 	would 	eliminate 	or 	modify
sone 	restrictions 	in 	this 	area. 	For 	exarnDle, 	the 	new 	r~les would
no 	longer 	prohibit 	"any 	statemen: 	offering 	gratuitous 	services 	or
the 	s'ubstantial 	equivalent 	thereof." 	However, 	various 	prov isions
of 	the 	proposed 	rules 	still 	appear 	to 	place 	unnecessarily 	broad
restrictions 	on 	the 	communication 	of 	price 	information 	to 	the
pUblic. 6 	The 	Board's 	proposed 	rules 	would 	impose 	burdensome
4 	Cleveland 	Regional 	Office 	and 	Bureau 	0: 	Economics,
Federal 	Trade 	Commission, 	Improving 	Consumer 	Access 	to 	~egal
Services: 	The 	Case 	for 	Removin; 	Restrictions 	on 	Truthful
Advertising 	(1984); 	Bureau 	of 	Economics, 	Federal 	Trade 	Com-
mission, 	Effects 	of 	Restrictions 	o~ Advertising 	and 	Commercial
Practice 	in 	the 	Professions: 	The 	Case 	of 	Optometry 	(1980);
Benham 	and 	Benham, 	Reculation 	Through 	the 	Pr0fessions: 	A
Persnective 	on 	Informa~ion Control, 	18 	J.L. 	& Bcon. 	421 	(1975);
Benham, 	~he 	~ffects of 	Advertisina 	on 	the 	P~ice of 	Eve~lasses, 15
J .. L. 	& Econ. 	337 	(1972).
5 	Bureau 	of 	Economics, 	Federal 	Trade 	Commission, 	Effects 	of
Restrictions 	on 	Advertising 	and 	Commercial 	Practice 	in 	the 	?ro-
fess~ons: 	The 	Case 	of 	Optometry 	(1980); 	Muris 	and 	McChesney,
Advertisinc 	and 	the 	Price 	and 	Qualitv 	of 	Lecal 	Services: 	The
Case 	for 	Leoal 	Clinics, 	1979 	F~'"2.. 0. 	Found. 	Research 	J. 	179
(1979). 	See 	also 	Cady, 	Restricted 	Advertising 	and 	Cc~petition:
The 	Case 	of 	Retail 	Drugs 	(1976).
6 	As 	the 	Supreme 	Court 	has 	noted 	in 	3ates 	v. 	St2te 	Bar 	of
Arizona, 	433 	U.S. 	350 	(1977), 	t~e 	lack 	of 	price 	info~ation
"serves 	to 	increase 	the 	[consumer's] 	difficulty 	of 	discovering
(co:-ltin'...led ... )
3

affirmative 	disclosure 	reauirements 	on 	discount 	advertisemen~s
and 	restrict 	the 	use 	of 	price 	advertisements 	to 	~hose which
contain 	a 	fixed 	or 	stated 	range 	of 	fees. 	We 	will 	discuss -each 	of
these 	provisions 	in 	turn.
1. 	Restrictions 	on 	Discount 	Advertisements
Proposed 	rule 	13:30-8.6(g) 	still 	requires 	that 	"offers 	of
discounts 	or 	fee 	reduction. 	. 	shall 	indicate 	the 	advertiser's
fixed 	or 	stated 	range 	of 	fees 	against 	which 	said 	discount 	is 	to
be 	made 	. 	"As 	discussed 	in 	the 	Crawford 	letter, 	this
restriction 	would 	effectively 	preclude 	the 	advertising 	of 	ac·ross-
the-board 	discounts 	(~., 	"10% 	Off 	All 	Dental 	Serv'ices"). 	The
Board 	has 	partially 	taken 	this 	concern 	into 	account 	by 	providing
in 	rule 	13: 3 0~:8. 6 (g) (2) 	that 	advertisements 	of 	across-the-board
discounts 	need 	:,:mly 	include 	"a 	representative 	list 	of 	services
and 	the 	fixed ()r 	stated 	range 	of 	fees 	against 	which 	discounts 	are
to 	be 	made 	for 	these 	services. 1I 	Nonetheless, 	we 	believe 	that
even 	this 	modified 	disclosure 	requirement 	is 	likely 	to 	deter 	such
offers 	unnecessarily. 	The 	representative 	list 	I:1ust 	include 	"a
sampling 	0: 	the 	advertiser's 	most 	frequent:y 	per:ormed 	se~ices
from 	the 	areas 	of 	preventive, 	diagnostic, 	restorative,
endodontic, 	periodcntic, 	prosthodontic 	(fixed 	and 	removable)
dentistry, 	and 	oral 	surgery." 	Similarly, 	13: 30-8. 6 (g) (3)
requires 	that 	"licensees 	who 	limit 	their 	practice 	to 	one 	or 	more
areas 	of 	dentistry. 	. 	shall 	in 	similar 	manner. 	. 	include 	a
representative 	list 	of 	the 	most 	frequently 	performed 	services 	i~
the 	advertiser's 	office." 	Although 	we 	support 	the 	Board's
attempt 	to 	allow 	for 	across-the-board 	discounts, 	the 	disclosure
requirement 	still 	appears 	long 	and 	unduly 	burdensome 	and 	may
discourage 	dentists 	from 	advertising, 	partiCUlarly 	in 	the
electronic 	media.
We 	recognize 	that, 	in 	general, 	the 	more 	information 	that 	is
available 	to 	consumers, 	the 	better 	prepared 	they 	will 	be 	to 	make
well-reasoned 	purChasing 	decisions. 	A~y disclosure 	obligation
increases 	advertising 	costs, 	either 	be~ause it 	increases 	the
len;th 	of 	the 	me2sage 	or 	re~ires practitioners 	to 	forego 	sc~e
portion 	of 	the 	advertising 	message 	they 	would 	have 	delivered 	had
the 	SDace 	not 	been 	occ~~ied bv 	the 	disclosure. 	Unnecessarv
dlscl;sures 	may 	therefo~e inhibit 	some 	dentists 	from 	providing
consumers 	with 	useful 	info~ation about 	available 	dental
6 ( ... continued) 	._
the 	lowest 	cost 	seller 	of 	acceDtable 	ability. 	As 	a 	res~lt 	.
[professionals] 	are 	isolated 	from 	competition 	and 	the 	incentive
::0 	price 	competitive2.y 	is 	reduced." 	Ie. 	at 	377. 	The 	absence 	of
such 	inforlilaticn 	"se~e[s] to 	perpetuate 	the 	market 	position 	of
establ ished 	[par":.ies~,." Ie. 	a't 	37 S.

services. 7 	~e 	believe 	that 	disclosures 	should 	be 	~andatec o~ly
~here they 	are 	necessary 	to 	prevent 	deception. 	Proposed
regulation 	13.30-S.6(g) 	appears-broader 	than 	necessary 	to 	aChieve
that 	objective, 	and 	~e 	therefore 	recommend 	that 	the 	Board
specifically 	allo~ across-the-board 	discounts 	but 	delete 	the
affirmative 	disclosur8 	requirements.
2. 	Restrictions 	o~ 	Fee 	Advertisements
The 	proposed 	rules 	also 	may 	inhibit 	price 	advertising 	by
requiring 	an 	unusual 	degree 	of 	specificity 	in 	the 	ads. 	Proposed
rule 	13:30-S.6(f) 	states 	that 	advertisements 	making 	referenc~ to
fees 	"shall 	be 	limited 	to 	that 	which 	contains 	a 	fixed 	or 	a 	ste.:'ed
range 	of 	fees 	for 	a 	specifically 	cc;scribed 	professional 	se~ice."
The 	current 	ve.r.sion 	of 	this 	rule 	lin:its 	fee 	advertising 	to
"routine" 	proft;!"sional 	services. 	We 	support 	the 	Board IS 	deletio:l
of 	the 	word 	II r( .utine," 	since 	the 	proposed 	rule 	would 	penni t
advertising 	of 	fee 	information 	for 	nonroutine 	services,
including, 	for 	example, 	new 	or 	innovative 	techniques 	that 	are 	not
ordinarily 	used 	by 	practitioners. 	However, 	the 	proposed 	rule
still 	appears 	to 	prohibit 	any 	advertisements 	that 	describe 	rather
than 	enumerate 	prices, 	using 	language 	such 	as 	"lowest 	prices" 	or
"as 	low 	as." 	such 	terms 	can 	be 	a 	method 	of 	cor.unanding 	consumer
attention 	and 	may 	serve 	to 	communicate 	a 	message 	effectively.
W~ile we 	recognize 	that 	some 	advertisers 	could 	use 	such 	terms 	in
a 	deceptive 	man:ler, 	they 	need 	not 	be 	deceptive. 	The 	Board 	ca:l
correct 	any 	abuses 	that 	do 	arise 	by 	invoking 	its 	au:'hority 	to
prohil::Jit 	"false, 	fraudulen::, 	misleading 	0::::- 	deceptive 	adve::::-tisi:lg"
under 	rule 	13:30-8.6(C) (1). 	We 	urge 	the 	Board 	to 	reexamine 	the
need 	for 	this 	rule 	as 	well.
c. ' 	Prohibitions 	on 	Commu:lication 	of 	Nonprice 	:::nfo:-mation
other 	portions 	of 	thE 	Board's 	rules 	would 	prohibit
communication 	of 	irnportan~ nonprice 	information. 	We 	believe 	that
these 	prohibitions 	can 	also 	have 	the 	effect 	of 	depriving
consume::::-s 	of 	information 	that 	cou:d 	aid 	them 	in 	se1ec~ins a
de:ltist. 	As 	a 	result, 	these 	restrictions 	could 	also 	~nhibit
cO::lpetit.ion.
1. 	Su~erioritv Claims
?-ule 	13:3G-8.6(c) (2) 	prohibits 	claims 	tha:: 	"::he 	se:-\':ce
perfor1ned 	or 	the 	mate::::-ials 	used 	are 	profess':one.:ly 	super::lr 	to
that 	io,'hich 	is 	ordine.::::-ily 	pe::::-fomed 	or 	used, II 	...·hether 	0::::- :lot 	the
stateDen~ is 	true. 	h~ 	a 	~inim~~, 	a 	prohibi~io~ 	O~ 	adve~tisewe~~s
that 	contain 	claims 	of 	s~periority res:.::::-icts 	comparative
7 	The 	Board 	sho~ld bear 	i:l 	mi~d that 	eliminatic~ of 	these
recuirements 	would 	net 	oreclude 	co~s~n:ers who 	desire 	s~=h 	~n:or
Tllc.~ion f~om :equest.in~ it. 	f:--0:71 	tr:e 	adve!""tise~.
5

adve~tising, 	which 	can 	be 	a 	highly 	effective 	mea~s of 	info~ing
and 	at~racting customers 	and 	fostering 	competition. 	h~en sellers
cannot 	compare 	the 	attributes 	of 	their 	services 	to 	those 	of 	their
competitors, 	the 	incentive 	to 	improve 	or 	to 	offer 	different
products, 	services, 	or 	prices 	is 	likely 	to 	be 	reduced.
We 	commented 	on 	this 	provision 	in 	the 	Crawford 	letter 	and
the 	Board 	responded 	by 	saying 	that 	this 	provision 	only 	prohibits
"unqualified 	statement[s) 	of 	superiority.ltB 	However, 	we 	are
concerned 	that 	the 	language 	of 	this 	provision 	could 	still 	be
applied 	to 	prohibit 	a 	wide 	range 	of 	claims 	concerning 	quality 	of
service. 	Virtually 	any 	statement 	about 	a 	seller's
qualifications, 	experience, 	or 	performance 	could 	be 	considered 	to
be 	an 	implicit, 	unqualified 	claim 	of 	superio~ity, and 	a 	ban 	on
such 	claims 	in~crferes with 	a 	seller's 	abili~y to 	provide
consumers 	truthful 	information 	about 	the 	differences 	between 	his
or 	her 	services 	and 	those 	of 	his 	or 	her 	competitors.
In 	its 	Summary, 	the 	Board 	further 	states 	that 	an 	individual
practitioner 	might 	be 	more 	s}:illed 	in 	one 	phase 	of 	dentistry 	and
less 	adept 	at 	others. 	Although 	this 	assertion 	may 	be 	correct, 	it
does 	not 	justify 	a 	general 	ban 	on 	truthful, 	nondeceptive 	claios
of 	professional 	superiority. 	If 	the 	Board 	is 	concerned 	that 	a
dentist 	might 	try 	to 	claim 	superiority 	in 	areas 	in 	which 	he 	or
she 	has 	no 	special 	expertise, 	a 	more 	effective 	approach 	would 	be
to 	prohibit 	unsubstantiated 	claims 	of 	superiority.9
2. 	Testimonials
P~oposed rule 	13:30-S.6(c)(5) 	would 	pro:'1ibit 	the 	use 	of 	"any
personal 	testimonial 	attesting 	to 	the 	technical 	quality 	or
technical 	competence 	of 	a 	sen,ice 	or 	treatment 	offered 	by 	a
licensee, It 	'whether 	truthful 	or 	not. 	This 	p~ov is ion 	modi f ies 	the
current 	rule, 	which 	p~ohibits all 	testimonials, 	in 	t~at 	it
apparently 	allows 	any 	testimonials 	not 	di~ected to 	"technical"
areas. 	Although 	we 	ap;reciate 	the 	Board's 	willingness 	to 	pe~it
the 	use 	of 	some 	testimonials, 	we 	believe 	that 	the 	prohibition 	cn
testh:',onials 	involving 	technical 	quali ty 	o~ 	co!:"petence 	still
unne~essarily ~estricts advertising 	in 	tha~ it 	could 	be
inter~reted to 	nreclude 	many 	kinds 	of 	testimonials 	that 	would 	not
b~ de8eotive. 	Thus, 	it 	co~ld elireinate 	a 	valuable 	means 	by 	which
a 	practltioner 	can 	disseminate 	truthful 	information 	concern~ng,
for 	example, 	his 	or 	her 	~ffice equipment, 	personnel, 	or
innovative 	techniques.
B 	See 	Boa~d S~mma~y of 	Public 	Co~~ents and 	Agency
Response£., 	17 	N.J.R. 	1320 	(gay 	20, 	1985) 	(he:::-einaf~e:- "Boa:::-d
SUr:uTla:::--y") .
9 	Fer 	a 	fu:::-ther 	discussion 	of 	substantiation 	:::-e~~irewe~~s,
see 	pages 	7 	and 	8, 	inf:::-a.
6

The 	Board 	Summary 	questions 	the 	value 	of 	patient
testimonials. 	However, 	this 	provision 	would 	appear 	to 	ban
testimonials 	even 	from 	dentists 	or 	other 	experts 	in 	the 	dental
area 	who 	are 	qualified 	to 	make 	technical 	judgments. 	We 	believe
that 	testimonials 	from 	such 	professionals 	are 	a 	valuable 	method
by 	which 	a 	dentist 	can 	differentiate 	his 	or 	her 	services 	from
those 	of 	other 	practitioners. 	Expert 	testimonials 	are 	widely
used 	in 	other 	contexts 	to 	communicate 	experiences 	with 	particular
products 	or 	services. 	They 	may 	be 	useful 	in 	advertising 	dental
senrices, 	particularly 	to 	attract 	those 	consumers 	who 	have 	haG
little 	or 	no 	contact 	with 	dentists. 	We 	therefore 	believe 	t~at
all 	types 	of 	testimonials 	should 	be 	permitted 	so 	long 	as 	they 	are
truthful 	and 	not 	deceptive.
,
3. 	Disc16~ure of 	Names 	of 	Dentists
(
Current 	rule 	l3:30-B.6(~) requires 	that 	advertisements 	and
public 	representations 	as 	to 	any 	practice 	set 	forth 	the 	names 	of
all 	licensees 	"who 	are 	principals, 	partners, 	or 	officers" 	in 	that
practice. 	Similarly, 	rule 	l3:30-B.4(k) 	requires 	that 	all
advertisements 	and 	public 	announcements 	that 	a 	practice
specializes 	in 	or 	limits 	its 	services 	to 	one 	or 	more 	of 	the 	eight
areas 	set 	forth 	in 	l3:30-B.4(b) 	list 	the 	names 	and 	permit 	nunbers
of 	all 	practitioners 	licensed 	to 	provide 	these 	services. 	These
provisions 	would 	appear 	to 	inhibit 	advertising 	by 	group 	practices
and 	chain 	firms 	with 	which 	large 	numbers 	of 	dentists 	are
associated. 	Such 	practices 	could 	face 	burdensome 	advertising
costs, 	and 	the 	disclosures 	could 	make 	any 	advertising 	by 	such
fi~s 	impractical, 	particularly 	broadcast 	advertising. 	We
believe 	that 	the 	Board 	could 	better 	accomplish 	the 	goal 	of
ensuring 	identification 	and 	accountability 	of 	individual
practitioners 	by 	requiring 	that 	the 	name 	of 	each 	dentist 	be 	dis-
played 	in 	a 	conspicuous 	place 	in 	the 	office, 	or 	noted 	on 	bills,
receipts 	or 	patient 	records.
. 	The 	Board 	Summary 	states 	that 	the 	Board's 	purpose 	in
promulgating 	provision 	l3:30-8.4(k) 	is 	to 	eli~inate the 	deceptive
practices 	of 	advertisers 	who 	falsely 	claim 	to 	have 	spe~ialists
and 	specialty 	services 	available 	when, 	in 	fact, 	the 	specialty
services 	are 	being 	rendered 	by 	general 	practitioners 	or 	the
specialists 	are 	unavailable 	~hen the 	consumer 	is 	in 	need 	of 	the
their 	services. 	~o 	the 	extent 	such 	deceptive 	practices 	exist, 	it
is 	unclear 	that 	r~le 	l3:30-B.4(k) 	~ould be 	an 	effec~ive re~edy.
We 	believe 	that 	such 	practices 	can 	be 	better 	regulated 	under 	~le
13: 30-8.6 (c) (l), 	which 	prohibits 	any 	"fa~ 3e, 	frauc.ulent /
misleading 	or 	deceptive" 	stateme:1t.
R~le 	13:30-8.6(d) 	states 	t::'at 	a 	licensee 	is 	re::?..lired 	"to
substantiate 	the 	truthfulness 	of 	£DY 	assertion 	or 	representation
7

set 	forth 	in 	anadvertise~e~t" (er.phasis 	added). 	If 	the 	lice~see
fails 	to 	provide 	such 	sUbsta~tiation, this 	is 	dee~ed
"?ro:essional 	misconduct." 	\o,'e 	believe 	that 	this 	provision 	is
broader 	than 	necessary 	to 	prevent 	deception. 	Advertisers 	should
have 	a 	reasonable 	basis 	for 	objective 	claims 	they 	make 	about
products 	or 	services. 10 	However, 	such 	claims 	as 	"friendlier
service" 	may 	not 	express 	or 	imply 	to 	consumers 	any 	degree 	of
objective 	verifiability. 	Requiring 	substantiation 	of 	such
assertions 	seems 	unnecessary 	to 	prevent 	deception 	and 	could 	deter
truthful, 	nondeceptive 	advertising. 	The 	Board, 	therefore, 	may
wish 	to 	make 	clear 	that 	its 	substantiation 	requirements 	will
apply 	to 	claims 	for 	which 	consumers 	expect 	that 	advertisers 	h~ve
a 	reasonable 	basis.
D. 	Vaoue 	and 	~u~~ective standards
Rule 	13:3d-8.6(b) 	states 	that 	advertising 	must 	be
communicated 	"in 	a 	dignified 	manner." 	We 	have 	two 	conce:::-ns 	about
this 	provision. 	First, 	it 	sets 	forth 	a 	vague 	criterion 	that 	is
susceptible 	to 	subjec~ive interpretations 	that 	have 	little 	or
nothing 	to 	do 	with 	the 	truth 	or 	falsity 	of 	particular 	state~ents
in 	the 	advertisements. 	As 	a 	result, 	the 	co~~unicatio~ of 	use=~l,
nondeceptive 	info:::-mation 	r.ay 	be 	inhibited. 	Second, 	the 	provision
may 	be 	const:::-ued 	to 	inhibit 	the 	use 	of 	innovative 	advertising 	and
marketing 	techni~Jes commonly 	used 	by 	othe:::- 	providers 	of 	goods
and 	services. 	Novel 	techniques 	~ay be 	characterized 	as
"undignified\! 	and 	yet 	be 	useful 	to 	advertisers 	to 	attract 	and
hold 	consume:::-s' ,attention. 	Thus, 	they 	can 	help 	to 	COTI'u"";lunicate
messages 	more 	effectively 	to 	consumers. 	To 	the 	extent 	th2
techniques 	the 	Board 	seeks 	to 	prohibit 	are 	not 	inherently
de~eptive, prohibiting 	them 	may 	well 	decrease 	the 	effectiven~ss
of 	advertising, 	resulting 	in 	highe:::- 	costs 	and 	less 	fre~Jent
advertising. 	For 	these 	reasons, 	we 	believe 	t~e Board 	should
eli~inate this 	provision.
As 	ineicated 	:1 	the 	C:::-awfo:::-d 	lette:::-, 	we 	also 	have 	concerns
abo~t several 	other 	provisions 	0: 	the 	Board's 	current 	~ules.
A~though these 	provisions 	are 	not 	specifically 	addressee 	in 	~he
10 	For 	example, 	the 	Federal 	?rade 	Corr~ission :::-e~wires
substantia~ion when 	an 	advertisement 	re£e~s to 	specific 	facts 	or
figures, 	Thom~son ~s=ical Co., 	104 	F.T.C. 	642, 	822 	(1984), 	afflc,
791 	F.2d 	189 	(D.C. 	C:r. 	1986), 	cort. 	den:ec, 	55 	U.S.~.W. 	3569
(U.S. 	Feb. 	23, 	1957), 	or 	when 	a~ 	advertisement 	expressly 	or
implicitly 	represents 	tha~ ~he ~ruth of 	~ 	claim 	is 	?=ie~tifically
established. 	Bristol-Hyers 	Co., 	102 	F.~.C. 	21, 	31S 	(1923),
affle, 	738 	F.2d 	554 	(2d 	C:"r. 	1984), 	cer":. 	denied, 	105 	S. 	Ct. 	9S0
(1985). 	See 	aenerallv 	FTC 	Policy 	Statenen": 	Regarding 	At\·e~tisi~g
Substantiation, 	104 	F.T.C. 	639 	(1984)
8

proposed 	rules, 	~e 	feel 	it 	is 	i~po~tant to 	corr~e~t on 	the~
because 	they 	could 	seriously 	li~it competition 	among 	health 	care
p~ofessionals.
1. 	Referrals
Rule 	13:30-8.15 	of 	the 	Board's 	current 	rules 	provides 	that
it 	is 	professional 	misconduct 	for 	dentists 	to 	pay 	to 	or 	receive
from 	a 	third 	party 	any 	fee 	or 	other 	form 	of 	compensation 	for 	the
referral 	of 	a 	patient. 	Among 	other 	effects, 	this 	rule 	would
appear 	to 	prevent 	dentists 	from 	participating 	in 	legitimate
referral 	services 	that 	ma~ch patients 	with 	appropriate
practitioners 	and 	charge 	a 	fee 	to 	the 	practitioner. 	Such
services 	may 	be 	valuable 	in 	helping 	consumers 	locate 	needed
dental 	care. 	,By 	facilitating 	the 	gath~~ing of 	information 	by
consumers, 	thes8 	services 	may 	actually 	increase 	com~etition among
health 	care 	pr0fessiona1s. 	In 	addition, 	the 	rule 	may 	also
interfere 	with 	the 	operation 	of 	alternative 	health 	care 	delivery
systems 	(such 	as 	PPOs 	and 	r~Os) 	that 	may 	have 	incentive
arrangements 	~'ith health 	care 	professionals 	in 	which 	fees 	are
civided 	between 	the 	medical 	p1ar. 	and 	~he professional. 	We
therefore 	recommend 	that 	the 	Board 	modify 	this 	p~oposed
regulation 	so 	that 	dentists 	are 	not 	prevented 	from 	participating
in 	legitimate 	referral 	services 	and 	alternative 	health 	care
delivery 	systems.
2. 	SDecialization
,
We 	also 	have 	concerns 	about 	the 	rules 	involving
specialization 	claims 	contained 	in 	13:30-8.~. 	Rule 	13:30-8.~(b)
lists 	the 	only 	eight 	areas 	of 	dentistry 	that 	are 	recognized 	as
suitable 	f~~ the 	announcement 	of 	limited 	dental 	practices. 	Under
~le 	13:30-8.~(c), dentists 	are 	prohibited 	from 	advertising 	that
their 	practice.> 	are 	limited 	to 	the 	eight 	listed 	specialties
~nless they 	are 	certified 	or 	eligible 	for 	certificatio~ by 	an
~~erican Dental 	Association 	specialty 	board 	or meet 	ed~cational
requirements 	and 	standarcs 	ap~rove~ by 	the 	Board. 	Rule
13:30-8.4(e) 	p~ovides that 	dentists 	who 	are 	not 	perrnit~ed by
subdivision 	(c) 	to 	announce 	the 	limitation 	of 	p~actice in 	a
special 	area 	of 	dentist~ may 	notadve~t:se that 	they 	a~e
qwalified 	in 	any 	special 	area 	of 	dentistry.
We 	can 	appreciate 	the 	Board's 	oesire 	to 	prevent 	dentists
from 	ho~ding themselves 	c~t 	as 	specia:ists 	in an 	area 	where 	~hey
lack 	necessary 	compet~nce. 	The 	Board's 	rules, 	however, 	appear 	to
be 	overly 	stringent. 	~he 	r_les 	li~it specialization 	advertising
to 	the 	ei;ht 	specialties 	set 	forth 	in 	:3:3D-8.4(~); they
therefore 	~culd prevent 	dentists 	who 	~EY have 	expertise 	in 	areas
other 	than 	the 	ei~~t specified 	frc~ adver~ising that 	fact. 	~n
ad~ition, 	they 	appear 	to 	re~wire the 	use 	of 	cnly 	those 	par~ic~~ar
9

names 	fo~ specialties 	deno~inated in 	the 	rule. 	These 	limitations
may 	restrict 	the 	flow 	of 	relevant, 	truthful 	information. 11
We 	also 	urge 	the 	Board 	to 	~econsider whether 	it 	is 	necessa~y
to 	prohibit 	dentists 	from 	annoyncing 	in 	a 	nondeceptive 	manner 	the
services 	they 	in 	fact 	provide.~2 	We 	believe 	it 	is 	impo~tant
that 	general 	dentists 	be 	allowed 	to 	communicate 	truthfully 	to 	the
pUblic 	that 	they 	have 	ey.pe~tise or 	experience 	in 	specific 	areas.
In 	our 	view, 	only 	specialization 	claims 	that 	are 	deceptive, 	such
as 	a 	claim 	falsely 	stating 	that 	a 	dentist 	is 	a 	board-certified
specialist, 	need 	be 	prohibited.
3. 	Retention 	of 	Records
Finally, 	ColA. 	note 	that 	rule 	13: 30-8.6 (1) 	would 	require
licensees 	to 	r~~ain copies 	of 	all 	advertisements 	for 	a 	period 	of
three 	years. 	\e 	believe 	that 	such 	a 	lengthy 	period 	may 	be
unreasonably 	burdensome 	for 	a 	practice 	that 	advertises 	frequently
and 	therefore 	suggest 	that 	the 	Board 	consider 	adopting 	a 	shorter
record 	retention 	requirt~ent.
F. 	Conclusion
:In 	sum, 	we 	recommend 	that 	the 	Boa:::-d 	not 	limit 	nondeceptive
advertising. 	We 	believe 	the 	changes 	we 	have 	suggested 	will 	pro-
vide 	substantial 	benefits 	to 	the 	Dublic, 	and 	will 	permit 	access
to 	a 	wider 	range 	of 	truthful 	information 	about 	the 	availability
of 	dental 	servi~es. 	They 	should 	also 	help 	to 	sti~ulate val~able
competition 	among 	dentists 	and 	imp:::-ove 	the 	efficiency 	with 	~hich
dental 	services 	are 	delivered, 	while 	still 	protecting 	t~2 p~blic
f 	f 	1 	'-!-' 	d 	......	r~m 	a~se or 	oec~p~lve a 	ver~ls~ng .
.:incerely,
William 	MacLeod
Di:::-ector
11 	See 	In 	Re 	F..M.J., 	455 	U.S. 	191, 	205 	(1982). 	?he 	S~~rerne
Co~rt held 	that 	"the 	States 	mav 	not 	~lace an 	abselute 	~:::-ohibition
on 	certain 	types 	of 	potentially 	Eisl~ading in:ermation~ ~., 	a
l:sting 	of 	areas 	of 	practice, 	if 	t~e 	ir.:ormation 	also 	may 	be
.... 	' 	. 	....h 	.. 	' 	.. 	' 	.... . 	" 	- . 	t 	20'	presen ,-eo 	In 	a 	way 	"" ~ .... 	lS 	no"" 	cecep "".:. ·,·e. 	1. c. 	a 	-' .
12 	Accerding 	to 	subdivision 	(g) 	of 	the 	rule,
~~y provide 	specialize= 	se~ice5.
10
general