Since the beginning of a worldwide trend towards democracy in the eighties, press freedoms, once scarce, have become more common. In new democracies and old the media enjoy wide latitude to report the news as they desire without fear of government repression. Freedom of speech is widely tolerated today in many parts of the world, but nowhere does it enjoy the kind of rigorous protection it receives in the United States.

Constitutional Status of Commercial Speech

In the significant cases that have established the current constitutional status of commercial speech, the question at issue has not been whether or not the speech involved was deceptive or untrue. The question has been whether there was a substantial state interest in regulating speech simply to discourage legal activities that are deemed undesirable. As things stand now, equilibrium has been established between competing concerns. No longer can government entities -- for the supposed benefit of the public -- freely outlaw speech concerning legal activities and products, while on the consumers' side, government oversight of advertising continues to guarantee protection from fraud and abuse.

A threat to this desirable state of balance comes from those who advocate making all types of speech equal. If all speech is of equal value, they argue, then the FTC should be stripped of its power to regulate advertising, thus leaving the consumer vulnerable since the courts presumably would take on the regulatory role. (Gillmor 507) The judicial system could not actively police the advertising industry if this were to happen because it could only respond to suits brought before it, leaving the public open to deception and fraud. Even if the FTC retained regulatory authority, its effectiveness would be reduced since it would likely be forced to become more permissive. Sweepstakes promoters and other con artists would rejoice but the rest of us would suffer.

History of Commercial Speech Regulation

It was not until 1942 in Valentine v. Chrestensen that the Supreme Court even considered a case involving commercial speech, and in this instance the Court rejected the notion that it deserved the protection of the First Amendment. (Gillmor 101) Before this time, it seemed perfectly natural to assume that it had less value than political speech. Until New York Times v. Sullivan in 1964 it could not be assumed that even political speech would enjoy a high level of protection. (Gillmor 169)

Precedent-Setting Supreme Court Cases

By the standards of their own day, the men who drafted the Constitution were exceedingly generous in handing out liberties, but as time passed and values changed, the original conception of First Amendment protection no longer suited the spirit of the times. During the First World War, under the leadership of Justices Holmes and Brandeis, the Supreme Court rectified the situation when it began building a body of law granting greater protection to political speech. Laws restricting such speech were increasingly challenged in Supreme Court proceedings, and beginning with Valentine v. Chrestensen, commercial speech restrictions began to be disputed as well.

Commercial Speech Gains Constitutional Protection

Virginia Pharmacy established clearly that, although commercial speech is constitutionally protected, it rates a lower standard of protection than political speech. (Gillmor 102) The conditions under which it may be restricted were not specified until four years later in Central Hudson Gas & Electric v. Public Service Commission of New York. The Court in this case created the standard test of the constitutionality of commercial speech restrictions, consisting of four parts, which are as follows:

 
1. The commercial speech must concern a lawful activity and not be misleading.
 
2. A substantial government interest must be served by the regulation.
 
3. The regulation must directly advance the government's interest.
 
4. The regulation must be narrowly drawn and no more extensive than necessary.

The four-part test grew out of a case in which the Public Services Commission of the State of New York had forbidden electrical utilities to advertise, even though no significant public good could come from the ban. They prohibited promotional advertising, intended to stimulate the purchase of utility services, and required that informational advertising schemes be submitted to the commission for approval. Central Hudson Gas & Electricity challenged the restrictions in state court, arguing the commission had restrained commercial speech in violation of the First Amendment. The case eventually reached the Supreme Court where it was decided the commission's ban violated both the First and the Fourteenth Amendments.

The test established in Central Hudson thus allowed for the protection of commercial interests as intended. It has been criticized, though, for failing to in subsequent cases. In, for example, Posadas de Puerto Rico Association v. Tourism Co. of Puerto Rico, the Central Hudson test was applied to a law that
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Another significant case, Greater New Orleans Broadcasting Association v. United States (June 1999), involved the law 18 U.S.C. § 1304, the same one reviewed in Edge Broadcasting. (Gillmor 733) It regulates both casino and lottery advertising, giving to the states the power to restrict radio and television advertisements concerning legalized gambling. A group of broadcasters in the New Orleans area challenged the law, and the Supreme Court decided in their favor. The Court held that the statute did advance two substantial governmental interests----discouraging the public from gambling, and enforcing state antigambling policies---but that it nonetheless failed the Central Hudson test because it did not apply to tribal and state-run casinos, and thus could not effectively further the stated government interest: discouraging gambling. To do so it would have to apply to all casinos. Justice Stevens noted in his opinion that the law discriminated against private gambling establishments because it prohibited "certain accurate product information, not commercial enticements of all kinds, and then only for certain brands of casino gambling." (Greater New Orleans) Unlike in Edge Broadcasting, the Central Hudson test in this case served to protect commercial interests from needless restrictions.

Cases Subsequent to Central Hudson

The First Amendment commercial speech doctrine had a dampening effect upon the FTC well before the more recent cases were decided. As early as 1983 the agency had weakened its own criteria for judging when deception has occurred, thus making it easier for advertisers to mislead consumers without fear of retribution. During the eighties the agency did regulate advertising less vigorously, but in part because of the prevailing attitude in the Reagan and Bush administrations that government intervention in the marketplace should be minimal. (Gillmor 506-507) More recently, however, the FTC has become more assertive, as in the actions taken against Gerber--a baby food manufacturer--for deceptive claims concerning physician recommendations. The Gerber ads falsely claimed that a large majority of pediatricians endorsed their product, suggesting that Gerber baby food is significantly superior to other brands. Based on such claims it is easy to see how concerned parents could be duped into choosing Gerber over a less-expensive competing brand. (Gillmor, 506-507) Not only did Gerber's deception harm the consumer, it also hurt competitors who were unfairly perceived as having a second-rate product.

The action against Gerber was not contested, but in other cases the FTC has had to defend its actions in court. In Warner-Lambert v. FTC, (1977) the agency finally prevailed after a twenty-year struggle against the manufacturers of Listerine mouthwash. Unlike with Gerber, the claims made for Listerine were directly asserted, not implied. A long-running series of ad campaigns claimed that Listerine is an effective cold remedy, despite there being no proof this is true. The FTC not only stopped Warner-Lambert from making further false claims, they forced the company to compensate for the misleading effects of earlier ads through corrective advertising designed to disabuse consumers of the established belief that Listerine is beneficial to cold sufferers. (Gillmot 519-522)

In 1992 FTC actions against Kraft Foods led to the case Kraft v. FTC, which was also decided in the agency's favor. Kraft had misled consumers by exaggerating the calcium content of its processed cheese. (Gillmor 509-515) Another example is Quaker State v. FTC, in which a brand of motor oil called Slick 50 was marketed as a premium brand with special properties not shared by other motor oils. Test results showed the product was no better than ordinary motor oils at reducing engine wear; it only cost more than the downmarket brands. (FTC Press Release)

As these cases show, the Federal Trade Commission today is nearly as important as the Central Hudson test in restricting commercial speech because "it is the primary federal consumer protection agency, working to ensure that advertisers do not disseminate false [or] unsubstantiated...advertising claims." (Azcuenaga) To pass FTC scrutiny, advertising must be truthful and non-deceptive, must have evidence to back up its claims, and must be fair. According to the FTC's Deception Policy Statement, an ad is deceptive if, by omitting information or through its statements, it is likely to mislead consumers acting reasonably under the circumstances.

Weakening of FTC Authority by the First Amendment Commercial Speech Doctrine