15 USC 52 makes it illegal to disseminate a false advertisement. There are similar laws in each state. In every case that I am aware of successful false advertising charges, the false statement works to the advantage of the seller, making the product falsely appear better than it is. By the letter of the law (at least the federal law), a false statement that makes your product appear worse than it actually is would also be actionable false advertising. Is there any case in the US (any jurisdiction) where an advertising statement was false but against the seller's interest, and the prosecution was successful? Alternatively, is there any precedent for the notion that a false advertising claim against seller's interest is not unlawful. (Note that my question is not limited to that specific piece of US code, it is about all such laws, including RCW 9.04.010 which makes false advertising a crime)
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2The answer is different with respect to each different law. Common law tort remedies for fraud usually require proof of damages as an element that must be established to be entitled to relief. No damages; no suit. Some state law deceptive trade practices acts, like 15 USC 52, allow suits by private individuals (government agencies would never bother to prosecute harmless cases even if they could) and have some minimum statutory damages award that in theory could allow relief, but then it boils down to the individual language of the statute and there is no general principle to apply.– ohwillekeCommented Nov 3, 2016 at 4:31
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1The most likely circumstance to see a statutory penalty for saying your product is not as good as it is would be under anti-trust laws if it was part of some elaborate scheme to put a competitor out of business somehow, or under laws like Food and Drug Regulations where accuracy matters to get proper dosages or some such. For example, under Colorado marijuana regulations, selling edibles with more THC than advertised can pose a health risk to the user even though it is in some sense "better" than claimed.– ohwillekeCommented Nov 3, 2016 at 4:34
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2You would think that the constitutional law of "standing" would limit such cases, but since "legal injury" for constitutional purposes is very malleable, it really doesn't. The law can legally protect an interest in getting truthful information per se without caring about any other injury caused by receiving knowingly inaccurate information, if legislators choose to define a legal interest in getting it.– ohwillekeCommented Nov 3, 2016 at 4:35
1 Answer
Violations of 15 USC 52 can generally only be enforced by the Fair Trade Commission (FTC) in civil lawsuits seeking injunctions or civil fines pursuant to 15 USC 45; it is not a crime to violate 15 USC 52 as your use of the term "prosecute" might imply.
In particular, 15 USC 45(n) in the enforcement provisions applying to all types of violations of that act which are enforced by the FTC in civil lawsuits, prohibits the kind of enforcement actions that you contemplate in your question. It says (emphasis added):
The Commission shall have no authority under this section or section 57a of this title to declare unlawful an act or practice on the grounds that such act or practice is unfair unless the act or practice causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition. In determining whether an act or practice is unfair, the Commission may consider established public policies as evidence to be considered with all other evidence. Such public policy considerations may not serve as a primary basis for such determination.
