Digital Media Law

Chapter 8:
Commercial Speech

Chapter 8 focuses on commercial speech, a category of expression that promotes a commercial transaction. Unlike political or artistic speech, commercial speech receives limited First Amendment protection. This chapter explores how courts determine what counts as commercial speech, what legal tests are applied to regulations, and how advertising is regulated at both the federal and state levels. Special attention is given to the role of the FTC, influencer marketing, and the evolving landscape of online advertising and endorsements.

Key Concepts in this Chapter

What Is Commercial Speech?

  • Speech that proposes a commercial transaction or promotes a product/service.

  • Must be truthful and not misleading to be protected by the First Amendment.

  • False or deceptive advertising receives no protection.

The Central Hudson Test (for analyzing restrictions on commercial speech):

  • Is the speech lawful and not misleading?
  • Is the government’s interest substantial?
  • Does the regulation directly advance that interest?
  • Is the regulation no more extensive than necessary to achieve the goal?

Federal Oversight: The FTC

  • The Federal Trade Commission (FTC) regulates unfair or deceptive advertising practices.

  • Enforces rules on truthfulness, substantiation, and fair disclosure.

  • Recent focus on social media influencers, native advertising, and online reviews and testimonials.

  • FTC can issue fines, injunctions, and require corrective advertising.

State-Level Regulation

  • States enforce consumer protection laws through attorneys general and consumer agencies.

  • States may adopt broader or more aggressive standards than the FTC.

Other Rules and Agencies

  • FCC: Requires sponsorship identification on broadcast media (TV and radio).

  • FDA and SEC: Regulate advertising in specialized contexts (e.g., food, drugs, stocks).

Digital Age Challenges

  • Influencers and creators often operate outside traditional ad structures.

  • Disclosures (like #ad) must be clear and conspicuous.

  • The line between content and advertising is often blurred (especially in “native” ads).

Test Your Knowledge

1. Under the FTC Endorsement Guides, influencers must disclose a material connection to a brand when:

 
 
 
 

2. Which case struck down Rhode Island’s ban on truthful liquor price advertising?

 
 
 
 

3. Which of the following is NOT one of the Bolger factors for identifying commercial speech?

 
 
 
 

4. Which of the following is MOST likely to be considered non‑actionable puffery?

 
 
 
 

5. Under the Central Hudson test, what is the threshold requirement (sometimes called Step 0)?

 
 
 
 

6. Commercial speech receives NO First Amendment protection when it is:

 
 
 
 

7. In Lorillard Tobacco Co. v. Reilly (2001), Massachusetts’ outdoor advertising restrictions failed Central Hudson primarily because they were:

 
 
 
 

8. Which is the SECOND prong of the Central Hudson analysis?

 
 
 
 

9. Which is the FOURTH prong of the Central Hudson analysis?

 
 
 
 

10. Greater New Orleans Broadcasting Ass’n v. United States (1999) struck down advertising restrictions related to:

 
 
 
 

11. Zauderer v. Office of Disciplinary Counsel is best known for establishing that compelled commercial disclosures are permissible when they are:

 
 
 
 

12. Which Supreme Court case first recognized First Amendment protection for truthful price advertising for prescription drugs?

 
 
 
 

13. Sorrell v. IMS Health (2011) involved a Vermont law restricting the use of what data for pharmaceutical marketing?

 
 
 
 

14. Which case held that attorney advertising (truthful, non‑misleading) is protected commercial speech?

 
 
 
 

15. Rubin v. Coors Brewing Co. invalidated a federal restriction on:

 
 
 
 

16. Which description best captures “commercial speech”?

 
 
 
 

17. Which case upheld restrictions on in‑person solicitation by lawyers due to risks of coercion and overreaching?

 
 
 
 

18. Under the FTC deception policy, a practice is deceptive if it involves a material representation or omission that is likely to mislead which consumer?

 
 
 
 

19. Under Zauderer, a compelled disclosure will likely be struck down if it is:

 
 
 
 

20. Which is the THIRD prong of the Central Hudson analysis?

 
 
 
 

Ideas for Future Study

  • FTC Enforcement: Look up a recent FTC action against an influencer or brand. What rule did they violate?

  • First Amendment Debate: Should commercial speech get the same protection as political speech? Why or why not?

  • Sponsorship Transparency: Should streaming platforms and podcasts follow the same sponsorship rules as broadcasters?

  • Ad Regulation in a Crisis: Explore how emergencies (like COVID-19) challenge the usual boundaries of commercial speech.

  • Global Perspectives: How does advertising regulation in the U.S. compare to the EU or UK?

Parting Thought

Advertising influences how we shop, vote, and think — but how much freedom should advertisers have? Should the law focus more on protecting consumers from deception or protecting speech from regulation? What balance feels right to you?