FTC Staff Comment Before the Massachusetts Attorney General Concerning Proposed Revisions to Massachusetts Retail Advertising Regulations

,.
. BtmEAU Oit
CONSUMER PROTEcrION
FEDERAL TRADE COMMISSION
l;iA;;HI1'lGjC~J. J, c. :0530
COMMISSION -AUTHORIZED
November 	la, 	1988
Helena 	Huang
Legal 	Assistant, 	Consumer 	Protection 	Division
Department 	of 	the 	Attorney General
·131 Tremont 	Street
Boston, 	MA 	02111
'. Dear Ms. 	Huang:
This 	letter 	is 	submitted 	in response 	to 	an 	October 	14 	notice
and 	accompanying 	letter 	from 	your 	office 	inviting 	comments 	on
proposed 	revisions 	to 	Massachusetts' 	Retail 	Advertising
Regulations 	(the 	"Regulations"). 	The 	staff 	of 	the 	Bureau 	of
Consumer 	Protection 	of 	the 	Federal 	Trade 	Commission 	appreciates
the 	opportunity 	to 	comment. 1
Our 	preliminary 	review 	of 	the 	Regulations 	suggest 	that 	they
reflect 	comrnendableefforts 	to 	provide-flexible 	guidance 	to
advertisers. 	Nonetheless 	the 	overall 	effect 	of 	several 	areas 	of
the 	RegUlations 	may be 	to 	restrict 	unnecessarily 	some .. forms 	of
truthful 	advertising, 	particularly 	price 	advertising.' 	Our
comment 	is 	limited 	to 	addressing 	three 	main 	areas 	of 	concern. 2
. 	1 	These 	Comments 	are 	the 	views 	of 	the 	staff 	of 	the 	Bureau
of 	Consumer 	Protection 	of 	the 	Federal 	Trade 	Commission. 	They 	are
not 	necessarily 	the 	views 	of 	the 	Commission 	or 	of 	any 	individual
Commissioner. 	Questions 	or 	comments 	concerning 	this 	document may
be 	addressed 	to 	C. 	Lee 	Peeler 	(202-326-3090), 	Associate 	Director
of 	the 	Division 	of Advertising 	Practices.
2 	Our comment 	does 	not 	address 	several 	provisions
contained 	in 	the 	Regulations. 	For 	example, 	we 	have 	not
-addressed provisions 	regarding 	the 	availability 	of 	advertised
products 	(§ 	6.06), 	use 	of 	prize 	and gift 	promotions 	(§ 	6.06) 	and
advertising 	of 	the 	availability 	of 	financing 	(§ 	6.09). 	We 	would
be 	pleased 	to 	provide 	comments 	on 	these 	and 	other 	sections 	if
requested.

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First, 	we 	are 	concerned 	that 	the 	proposed 	requirement 	that
advertisers 	include 	in 	every 	advertisement 	every material 	fact
about 	a 	particular product without 	regard 	to 	the 	specific 	facts
and 	circumstances 	surrounding 	the 	advertisement 	is 	inconsistent
with 	the 	Federal 	Trada 	Commission 	Act 	and 	could 	chill 	the 	flow 	c:
truthful 	advertising 	thus 	depriving 	consumers 	of valuable
information. 3 	Second, 	while 	many 	sections 	of 	the 	Regulations
appear 	to 	reflect 	an 	effort 	to 	minimize 	restrictions 	on truthful
advertising, 	certain provisions 	nonetheless 	appear 	to 	have 	the
unintended 	effect 	of 	prohibiting 	the 	dissemination 	of 	truthful
information, 	thus 	raising potential 	inconsistencies 	with both the
FTC Act 	and 	the 	First Amendment. 	Similarly, 	while 	the
Regulations 	indicate 	a 	substantial 	effort 	to 	provide 	flexible
guidance 	for 	pricing 	claims, 	the very 	detailed 	and 	prescriptive
nature 	of 	the 	Regulations, 	together with 	their 	detailed 	record
retention 	policy, 	could 	act 	to 	chill 	truthful 	price 	advertising.
Small 	merchants, 	who 	may 	have 	limited 	access 	to 	legal 	counsel 	to
prepare 	and 	review 	their 	ads, 	may 	be most 	affected 	by 	such
regulatory 	requirements. 	Finally, 	the 	specificity 	of 	these
Regulations 	may 	have 	the 	practical 	effect 	of 	chilling 	the
dissemination 	of 	advertising 	that 	is 	permitted 	in 	other 	states
and 	under 	federal 	law. 4
3 	Massachusetts 	law provides 	that 	consumer protection
regulations 	"shall 	not 	be 	inconsistent with 	the 	rules·,
regulations 	and 	decisions 	of 	the 	Federal 	Trade 	Commission 	and 	the
Federal 	Courts 	interpreting 	the provisions 	of 	• 	• 	• 	(The 	Federal
Trade 	Commission Act).tt 	Mass, 	Gen. 	Laws 	Ann. 	ch. 	93A, 	§ 	2 	(c)
(West 	1984).
4 	Because we 	have 	not 	had 	the 	opportunity 	to 	review 	the
basis 	for 	the 	proposed 	rulemaking, 	we 	express 	no 	opinion 	on 	the
questions 	of 	Whether there 	is 	an 	adequate 	factual 	basis 	for 	the
proposed 	rules. 	See,~, Katherine 	Gibbs 	School 	V. 	FTC, 	612
F.2a 	658, 	664 	(2d 	eire 	1979) 	(Commission 	failed 	to 	show a
rational 	connection 	between 	the 	fact 	found 	and 	the 	choice made) :
statement 	of 	Basis 	and 	Purpose, 	Credit 	Practices 	Trade
Regulation 	Rule, 	49 	Fed. 	Reg. 	7740, 	7742 	(1984) 	(rulemaking
record 	should 	contain 	evidence 	in 	support 	of 	the 	proposed 	rUle).
The 	Statement 	of 	Basis 	and 	Purpose 	for 	the 	Credit 	Practices 	Rule
also 	concluded 	that 	U[b)efore 	promulgating 	a 	rule, 	rather 	than
bringing 	individual 	cases, 	the 	Commission 	believes 	the 	public
interest 	requires 	answers 	to 	the 	following 	additional 	questions:
(1) 	Is 	the 	act 	or 	practice 	prevalent?; 	(2) 	Does 	a 	significant
harm 	exist?: 	(3) 	Will 	the 	proposed 	rule 	reduce 	that 	harm?; 	and
(4) 	Will 	the 	benefits 	of 	the 	rule 	exceed 	its 	costs?lI. 	IS.

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A. 	P1sclosure 	of Material 	Facts
One 	of our primary 	concerns 	is with 	the 	prov1s10n 	in 	Section
6.04 	(2) 	that 	requires 	sellers 	to 	"clearly 	and 	conspicuously
disclose 	in 	any 	advertisement 	any matarial 	fact. 1I 	The 	provisic::.
defines 	the 	tern 	"material 	fact" 	and 	identifies 	seven
illustrative 	categories 	of 	material 	facts 	that 	~ust be
disclosed.SIn 	addition 	to 	these 	seven 	specific 	disclosures, 	t~e
Regulations 	also 	require 	disclosure 	of 	any 	fact 	that 	"has 	the
tendency 	or 	capacity 	to 	influence 	reasonable 	buyers 	• 	. 	• 	to
·purchase 	or 	not 	to 	purchase 	the product. 1t
Thus, 	as 	defined, 	the 	term 	u:material 	fact"·· could 	include 	an
almost 	endless 	list 	of 	required 	disclosures. 	The 	disclosure
obligations 	i~posed by 	the 	Regulations 	go 	well 	beyond 	those
required 	under 	FTC 	law. 	As 	noted 	in 	International 	Harvester
~,6 the 	FTC Act 	does 	not 	impose 	such 	broad 	liability:
The 	number 	of 	facts 	that 	may 	be 	material 	to
consumers--and 	on which 	they 	may 	have 	prior
misconceptions--is 	literally 	infinite.
Consumers may 	wish 	to 	know 	about 	the 	life
S 	Although we 	did 	not 	have 	sufficient 	background
information 	on which 	to 	analyze 	each 	of 	the 	seven 	specifically
required 	disclosures, 	you 	may 	wish 	to 	consider whether 	each 	of
these 	disclosures 	is 	necessary 	in 	all 	cases. 	If 	the disclosures
are 	not 	necessary 	to 	prevent 	deception, 	making 	them 	a 	requirement
may 	increase 	the 	costs 	of 	advertising 	(~, 	through 	higher
prices 	for 	space 	ads 	or 	through the 	higher 	cost 	of 	ensuring
compliance 	with 	the 	regulation) 	with 	no 	significant 	benefit 	to
consumers 	who 	might 	otherwise 	be 	provided 	with 	this 	information
or who 	might 	find 	it 	immaterial.· 	For 	example, 	the 	Regulations
require 	a 	seller to 	disclose, 	in 	all 	instances, 	th~t a 	product
advertised 	for 	sale 	is 	"used." 	It 	is 	well 	settled 	in 	Commission
case 	law 	that 	a 	seller 	has 	an 	obligation 	to 	disclose 	that 	an
"apparently 	new product was 	actually 	used." 	International
Harvester 	Co., 	104 	F.T.C. 	949, 	10S8 	(1984) 	(footnote 	omitted),
appeal 	dismissed, 	No. 	85-1111 	(D.C. 	Cir. 	1985). 	However,
advertisements 	for 	products 	that 	are 	clearly used--such 	as 	ads
promoting the 	sale 	of 	used 	cars 	and 	second hand 	furniture--may
not 	need 	such 	a 	disclosure. 	You may 	wish 	to 	consider whether
this 	provision 	should be 	modified 	to 	require 	a 	disclosure 	that 	a
product 	is 	used 	only when 	the 	failure 	to 	do 	so would mislead
consumers 	that 	the 	advertised 	product 	was 	new.
6 	104 	F.T.C.
(D.C. 	Cir. 	1985).
865, 	96S 	(1973).\
949 	(1984), 	appeal 	dismissed, 	No. 	85-1111
~ ~ 	ITT 	Continental 	Baking 	Co., 	83 	r.T.C.

Helena 	Huang
November 	18, 	1988
expectancy 	of 	clothes, 	or 	the 	sodium content
of 	canned beans, 	or 	the 	canner's 	policy on
trad~ with 	Chile. 	Since 	the' seller will 	have
no 	way 	of 	knowing 	in 	advance 	which disclosure
is 	important 	to 	any 	particular consumer, 	he
will 	have 	to 	make 	complete 	disclosures 	to
all. 	'A television'ad would 	be 	completely
buried under 	such disclaimers, 	and 	even 	a
full-page 	newspaper 	ad 	would 	hardly 	be
sufficient 	for 	the purpose. 	• 	•• 	The
resulting 	costs 	and 	burden 	on 	advertising
communication would very possibly 	represent 	a
net 	harm 	for 	consumers. 7 	.
,Commission actions 	dealing-with'deceptive 	omissions 	often
deal 	with 	cases 	in which 	a 	seller 	fails 	to 	disclose 	qualifying
information 	necessary 	to 	prevent an 	affirmative 	statement 	from
creating 	a 	misleading 	impression. 	Similarly, 	it 	can be 	deceptive
for 	a 	seller to 	remain 	silent 	under 	circumstances 	that
constitute 	an 	implied 	but 	false 	representation. 	Such 	implied
representations may 	take 	several 	forms. 	They 	may 	arise 	from 	the
physical 	appearance 	of 	the 	product, 	from 	the 	circu~stances of 	a
specific 	transaction, 	or 	from 	ordinary 	consumer 	expectations 	as
to 	the 	irreducible minimum 	performance 	standards 	of 	a 	particular
class 	of 	good. S 	Finally, 	even 	absent 	an 	express 	or 	implied
representation, 	the 	FTC Act 	requires 	further 	disclosures 	in
situations 	in which 	the 	failure 	to 	do 	so 	is 	likely 	t~ cause
substantial 	consumer 	injury 	that 	is 	not 	outweighed 	by 	benefits 	to
consumers 	or 	competition 	and 	that 	could 	not 	be 	reasonably 	.
avoided. 9 	In 	applying 	each 	of 	these 	standards, 	the 	Commission
must 	necessarily 	analyze 	the 	factual 	surroundings 	of 	the 	case,
~, 	Whether 	express 	or 	implied 	representations 	have 	been made
or whether 'substantial 	consumer 	injury 	has 	occurred.
There 	are 	important 	policy 	as 	well 	as 	legal 	reasons 	for
ensuring 	that 	the 	Regulations 	are 	consistent with 	the 	FTC 	Act 	in
this 	area. 	Advertising 	can 	signal 	to 	consumers 	that 	attractive
features 	may 	be 	available 	and 	that 	consumers 	should 	inquire
further 	for 	details. 	Numerous 	economic 	studies 	have
demonstrated 	that 	advertising 	for 	particular products 	or 	services
7 	1.£. 	at 	1059-60.
8 	1£. 	at 	1057-58.
9 	ll. 	at 	1060-61.

r:.al:n:!. 	Euang
November 	10, 	1963
tends 	to 	enhance 	competition 	and 	lower 	prices. 10 	Advertising,
however, 	is 	often 	not 	the 	most 	efficient 	or 	effective vehicle 	for
disclosing 	detailed and 	comprehensive 	characteristics 	of 	a
potential 	transaction, 	and 	the 	failure 	to 	do 	so 	should not
necessarily 	render 	it 	illegal. 	Subjecting 	retailers 	to 	t~e type
of 	open-ended 	liability 	suggested by the 	Regulations 	could 	injure
consumers 	because 	advertisers 	may 	respond 	simply 	by 	restricting
the 	amount 	of 	advertising 	in which they 	engage, 	which 	in 	turn
would 	reduce 	the 	amount 	of information they 	provide 	to 	consumers.
B. 	hdvertising 	Substantiation
Section 	6.03. (1) 	of 	the 	Regulations 	states 	that 	"sellers
must 	be 	able 	to 	substantiate 	all 	claims 	or 	offers 	made 	before·
such 	claims 	or 	offers 	are 	disseminated" 	(emphasis 	added). 	That
same 	section 	provides 	that 	sellers must 	maintain 	sufficient
records 	to 	substantiate 	all 	representations 	made 	in 	its
advertisements. 	section 	6.14 	(1) 	repeats 	the 	requirement 	that 	a
seller 	"be 	able 	to 	substantiate 	all 	claims 	it makes 	in 	an
advertisement" 	(emphasis 	added). 	Section 	6.14 	(2) 	adds 	a 	general
requirement 	that 	sellers 	maintain 	records 	substantiating 	these
claims 	for 	a 	period 	of 	six 	months 	after 	dissemination. 	Under 	the
Regulations, 	therefore, 	a 	seller must 	be 	able 	to 	substantiate
both 	objective 	and 	sUbjective 	Claims.
These 	provisions 	are 	similar to 	the 	Commission's 	well-
established 	legal 	requirement 	that 	advertisers 	and 	ad 	agencies
have 	a 	reasonable 	basis 	tor 	advertising 	claims 	before 	they 	are
made. 	They 	differ, 	however, 	in 	one 	important 	respect. 	The 	FTC
advertising 	substantiation doctrine 	is 	directed 	to 	objective,
verifiable claims 	about 	the 	item 	or service 	advertised.
Consumers 	are 	likely 	to 	interpret 	advertisements 	making 	such
10 	See. 	e,a" 	Cleveland 	Regional 	Office 	and 	Bureau 	of
Economics 	of 	the 	Federal 	Trade 	Commission, 	Improving 	Consumer
Access 	to 	Legal 	Services: 	The 	Case 	for 	Removing 	Restrictions 	on
Truthful 	Advertising, 	Federal 	Trade 	Commission 	staff Report
(1984); 	Benham, 	The 	Effect 	of Advertisina 	on 	the 	Price 	of
.Eyeglasses, 	15 	J. 	of 	L. 	and 	Econ. 	337 	(1972); 	Cady, 	An 	Estimate
of 	the 	P~ice Effects 	of 	Restrictions 	on 	Drug 	Price 	AdYertising,
14 	Econ. 	Inquiry 	493 	(1976): 	Kwoka, 	Advertising 	and 	the 	Price 	and
Quality 	of 	optometric 	Services, 	74 	Am •.Econ. 	Rev. 	211 	(1984); 	and
Schroeter et 	al., 	Advertising 	and 	competition 	in 	Routine 	Lecral
Service 	Markets: 	An 	Empirical 	Investigation, 	36 	The 	J. 	of 	Indus.
EC0Z:. 	49 	(1987).

E~l=~:l Eua:lg
Ncva~a~ lv, 	l;~~
claims 	as 	representing, 	either 	expressly 	or 	impliedly, 	that
support 	exists 	for 	the 	advertised 	characteristic. 	These
representations 	of 	substantiation 	are material 	to 	consumers. 11
Th9 	FTC 	advertising 	sUbstantiation 	dcctrine 	also 	reccg~izes
that 	not 	all 	claims 	imply 	to 	consumers 	that 	the 	advertiser 	has
substantiation 	for 	them. 	For 	example, 	consumers 	are 	not 	likely
to 	interpret 	subjective 	advertising 	or 	"pufferyll 	claims 	to 	be
backed by 	substantiation. 	To 	the 	extent 	that 	the 	Regulations
would 	require 	advertisers 	to 	have 	substantiation 	for 	all 	claims
other 	than 	objective 	verifiable 	claims~ 	it would 	be 	inconsistent
with 	existing 	Commission 	standards. 	In 	addition, 	section 	6.14
(2) 	compounds 	the 	burden 	by 	specifically 	requiring 	that 	records
be 	created 	and 	retained 	to 	sUbstantiate 	these. claims.
C. 	Price 	Advertising 	Provisions·
Sections 	6.05 	and 	6.14 	specify 	in 	detail 	the 	types 	of 	price
comparisons 	permissible 	and 	the 	records 	that 	must 	be 	maintainec
in 	order 	to 	substantiate 	those 	comparisons. 	These 	provisions
appear 	to 	be 	designed 	to 	force 	all 	price 	advertising 	into 	certain
preset 	categories. 	As 	such, 	they 	may 	have 	the 	unintended 	effect
of 	increasing 	the 	cost 	of 	price 	advertising which 	in 	turn would
reduce 	the 	amount 	of 	this 	important 	information 	that 	is 	available
to 	consumers.
To 	illustrate, 	section 	6.05 	(11) 	(a) 	(3) 	provides 	that, 	when
products 	are 	advertised 	as 	available 	at 	a 	range 	of 	savings, 	the
seller must 	clearly 	and 	conspicuously disclose 	"(a]ll 	material
facts 	about 	the 	lowest 	priced 	or 	highest 	discounted 	product
offered 	(such 	as 	size, 	material, 	grade 	or 	model)." 	Given 	the
br.oad 	definition 	of 	the 	term 	"material 	fact" 	and 	the 	relatively
11 	Substantiation 	Policv 	statement, 	104 	F.T.C. 	839 	(1984)
(emphasis 	added) 	(adopted 	by 	the 	Commission 	in 	Thompson 	Medical
.QQ. , \ supra) •

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ljc'laI!'~":= 	13, 	1933
inflexible 	definition 	of 	"clearly 	and 	conspicuouslylt, 	the
Regulations 	may 	reduce 	a 	seller's 	incentive 	to 	offer broad 	based
savings 	to 	consumers. 12
Si:nilarly, 	section 	6.05 	(3) 	(a) 	(2) 	statss 	that 	a 	sellar
may 	compare 	its 	former 	price 	with 	its 	current 	price 	if 	its 	former
price 	is 	equal 	to 	or below the 	price 	at 	which 	the 	seller 	offered
the 	product 	for 	sale 	for 	at 	least 	30 	of 	the 	45 	days 	prior 	to
dissemination 	of 	the 	advertisement. 	Notwithstanding, 	section
6.14 	(3) 	(a) 	provides 	that 	a 	seller must 	maintain 	records 	of 	all
sales 	of 	the 	advertised 	product 	and 	all 	offers 	to 	sell 	the
product which 	occurred 	during 	the 	12 	month 	period 	prior 	to
dissemination 	of 	the 	advertisement. 	such 	requirements 	may
discourage 	sellers 	from 	offering 	and 	advertising 	reduced 	prices.
Further, 	section 	6.05 	(6) 	(b) 	prohibits 	a 	manufacturer 	or
franchisor 	from making 	a 	"list price" 	or 	similar 	comparison
unless 	the 	list 	price 	"is 	the 	price-charged 	for 	the 	advertised
product by 	a 	reasonable 	number 	of 	sellers 	in 	the 	trade 	area 	in
which 	the 	advertisement 	is 	disseminated" 	(emphasis 	added). 	In
order 	to 	make 	"list 	price" 	comparison 	under 	this 	provision,
therefore, 	a 	national 	manufacturer would 	have 	to 	investigate 	in
detail 	the 	prevailing 	prices 	in 	each 	trade 	area 	in which 	the
advertisement 	is 	disseminated. 	Recognizing 	the 	potentially
12 	The 	following 	hypothetical 	may 	illustrate 	our 	concern.
Under 	this 	provision, 	a 	seller who 	offers 	a 	range 	of 	savings 	(20-
30% 	off) 	on 	particular brands 	of 	shoes 	must 	identify 	the 	models
of 	shoes 	offered 	at 	a 	30% 	saving, 	what 	the 	shoes 	are 	made 	of, 	and
what 	size 	shoas 	are 	being 	offered. 	Having 	disclosed 	the 	size 	of
the 	shoes 	offered 	for 	sale, 	the 	provisions 	governing 	the
availability 	of 	advertised 	products 	(§ 	6.06) 	may 	apply 	to 	the
seller which WOUld, 	in 	turn, 	require 	additional 	disclosures.
While 	such 	requirements 	may 	provide 	a 	great 	deal 	of 	informatio~
to 	consumers, 	the 	increased 	costs 	of 	compliance may 	be 	Ultimately
reflected 	in 	higher prices. 	These 	costs, 	and 	their 	potential
impact 	on 	small 	businesses, 	may 	be 	unnecessary 	if 	unfairness 	or
deception 	does 	not 	occur 	in 	the 	absence 	of 	the 	required
disclosures.\

Helena 	Huang
November 	lB, 	19B8 8
burdensome 	nature 	of 	such 	a 	requirement, 	FTC guidelines 	take 	a
different 	approach. 13 	As 	drafted, 	this 	Regulation 	may
discourage 	sellers 	trom 	using 	this 	type 	of 	price 	comparison.
Finally, 	section 	6.05 	(16) 	provides 	that 	"[t]he use 	in 	an
advertisement 	ot 	a 	price 	comparison not 	otherwise 	allowable
under 	these 	regulations 	is 	an 	unfair 	or deceptive 	act 	even 	if 	the
advertisement 	also 	contains 	disclaimers 	or 	explanatory 	language"
(emphasis 	added). 	This 	section compounds 	the 	problem 	created by
the 	other 	provisions 	by 	prohibiting price 	comparisons 	not
specifically provided 	for 	in 	the 	Regulations 	even 	if 	they 	are
true 	by virtueo! 	using 	explanatory 	language 	in 	the
advertisement. 	Such 	broad 	prohibitions 	of 	truthful 	speech 	that
is 	not 	otherwise 	deceptive 	or misleading may 	not 	withstand
constituti9nal 	scrutiny 	under 	the 	First Amendment. 14 	In
13 	FTC 	guidelines 	state 	that
a 	manufacturer 	. 	. 	. 	who 	does 	business 	on 	a
large 	regional 	or national 	scale 	cannot 	be
required 	to 	police 	or investigate 	in 	detail
the 	prevailing 	prices 	of 	his 	articles
throughout 	so 	large 	a 	trade 	area. 	IIf 	he
advertises 	. 	." 	. 	a 	list 	or preticketed 	price
in good 	faith 	• 	• 	• 	Which does 	not
appreciably 	exceed 	the 	highest 	price 	at 	Which
substantial 	sales 	are made 	in 	his 	trade 	area,
he 	will 	not 	be 	chargeable with having 	engaged
in 	a 	deceptive 	practice.
16 	C.F.R. 	§ 	233.3 	(g) 	(1988) 	(emphasis 	added). 	See 	also 	16
C.F.R. 	§ 	233.3 	(h) 	(1988) 	(giving 	an 	example 	of when 	a
manufacturer's 	conduct would 	not 	constitute 	a 	deceptive
practice).
14 	See, 	e.g., 	South Ogden 	cvs 	store, 	Inc. 	v. 	Ambact, 	493
F. 	~ upp. 	374 	(S • D. N • Y. 	1980).

3~le~~ 	HU~~~
Nova~~ar 13, 	1988
addition, 	the 	citizens 	of 	Massachusetts 	will 	not 	be 	better 	served
if 	this 	Regulation 	chills 	the 	dissemination 	of 	truthful
nondeceptive 	price 	advertisements. 15
So~z co~~~ntators o~ advertising 	law 	hav~ argued 	that 	rigid
enforcement 	of 	even 	the 	FTC's 	more ,general 	and 	flexible
guidelines 	may 	at 	times 	impair 	competition while 	generating
little 	or 	no 	consumer benerits. 16 , 	In 	light 	of 	the 	much 	greater
specificity 	of 	the 	Regulations, 	we 	believe 	a 	careful 	review 	of
their 	potential 	impact 	on vigorous 	price 	competition 	should
precede 	their 	adoption. 	If 	there 	is 	an 	opportunity 	for 	further
comment, 	we 	will 	attempt 	to 	provide 	a more 	detailed 	comparison
between 	the 	Regulations 	and 	the 	provisions 	of 	the 	FTC Act 	and
will 	address 	in 	greater 	depth 	the 	Regulations' 	likely 	impact 	on
conSUmers.
D. 	Impact 	on 	Interstate 	Advertising
A final 	question 	raised 	by 	the 	Regulations 	is 	their 	impact
on 	interstate 	advertising. 	In 	addition 	to 	defining 	unfair 	or
deceptive 	advertising 	practices, 	the 	RegUlations 	contain
remedial 	provisions 	specifying 	such matters 	as 	the 	size 	of 	the
15 	See 	Zauderer v. 	Office 	of 	Disciplinary 	Counsel, 	471 	U.S.
626 	(1985) 	(attorney 	advertising). 	In 	Zauderer, 	the'Supreme
Court 	wrote:
Were 	we 	to 	accept 	the 	State's 	argument 	in 	this 	case, 	we
would 	have 	littl~ basis 	for 	preventing 	the 	government
from 	suppressing 	other 	forms 	of 	truthful 	and
nondeceptive 	advertising 	simply to 	spare 	itself 	the
trouble 	of 	distinguishing 	such 	advertising 	from 	false
or deceptive 	advertising. 	The 	First 	Amendment
protections 	afforded 	commercial 	speech would 	mean
little 	indeed 	if 	such 	argument were 	allowed 	to 	prevail.
Our 	recent 	decisions 	involving 	commercial 	speech have
been 	grounded 	in 	the 	faith 	that 	the 	free 	flow 	of
commercial 	information 	is 	valuable 	enough 	to 	justify
imposing 	on would 	be 	regUlators 	the 	costs 	of
distinguishing 	the 	truthful 	from 	the 	false, 	the 	helpfUl
from 	the 	misleading, 	and 	the 	harmless 	from 	the 	harmful.
~. 	at 	646.
16 	See, 	e.g., 	Pitofsky, 	Beyond 	Nader: 	Consumer 	Protection
and 	the 	Regulation 	of 	Advertising, 	90 	Harv. 	L. 	Rev. 	661, 	687-689
(1977).

E.=2.:anZl 	:;U:lng
:rC'..·=~.a:: 	::3,
print 	that must 	be 	used 	for 	disclosures 	in print 	advertising 17
and 	wording 	of disclosures 	to 	be 	contained 	in 	catalogs. 18
Because 	it 	may be 	costly 	for 	a 	firm 	to 	tailor 	its 	national
advertising 	on 	the 	basis 	of 	distinct 	state 	requirements, 	the
provisions 	ultimataly 	adopted 	in Massachusetts 	may 	have 	the
practical 	effect 	of 	chilling 	the 	dissemination 	of 	adver~ising
that 	is 	permitted 	in 	other states 	and 	under 	federal 	law. 	We
believe 	that 	you 	may 	wish 	to 	examine 	carefully 	these 	likely
effects 	of 	the Regulations 	before 	adopting 	them.
E. 	Conely'sion
The 	staff 	of 	the 	Bureau 	of 	Consumer 	Protection 	share 	the
concern 	of 	the 	Massachusetts 	Attorney 	General 	that 	advertising 	be
truthful 	and 	substantiated. 	We 	hope 	that 	you will 	find 	these
comments 	helpful. 	We 	would 	be 	pleased 	to 	provide 	you 	with 	a 	more
detailed 	analysis 	of 	the 	provisions 	of 	the 	proposed 	Regulations
if 	requested.
Sincerely,
~~~-~#
william 	c. 	MacLe6d"'-~'~
Director
17
18
See 	Section 	6.01 	(2).
See 	Section 	6.05 	(10) 	(a) 	(1).
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