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Home > Journals > Michigan Law Review > MLR > Volume 31 > Issue 6 (1933)

 

Abstract

The law provided neither practical remedies nor suitable means of preventing false and misleading advertising before the passage of the Federal Trade Commission Act in 1914. The doctrine of caveat emptor had long prevented the effectual protection of misled customers and of competitors consequently injured. True, competitors could enjoin or recover damages-for injury by misleading advertising which took the form of common law "unfair competition." The courts had found no great difficulty in extending established common law principles to make unlawful such obvious violations of the proprietary rights of particular competitors as "simulation" and "disparagement." Although there is little question that these practices come within the scope of the Act, comparatively few of these cases have reached the courts through the Commission. The availability of more expeditious private remedies has made it unnecessary for the Commission to take jurisdiction. Its chief concern has been with what has been technically termed "false and misleading'' advertising. Here the injury to a particular competitor is not so apparent, although the effect of such advertising may be much more comprehensive, involving the deprivation of competitors generally of a part of their market through the deception of purchasers. It was this type of evil that flourished practically unhampered before the passage of the Act. The purchaser's remedies, actions for deceit or breach of warranty, presented inherent difficulties and gave relief for only the most flagrant abuses. Usually the value of the purchase was so small that it did not warrant the risk of suit. Rescission, although having a somewhat broader scope, faced the same obstacle. The vendor who would mislead customers would not hesitate to make them resort to the courts to be returned to status quo. The possible criminal prosecutions, for obtaining money under false pretenses, or under the statute forbidding the use of the mails to defraud, failed because of the necessity of proof of fraud beyond a reasonable doubt.

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