What is false advertising and how does it affect competitors and customers?

False advertising claims occur when a business markets and promotes a product or service with advertisements that gives false, misleading, deceptive, or unproven information.

If a business is suspected of misrepresenting a product and using false advertising, competitors, customers, or government regulators may file a lawsuit against them.

How does false advertising affect competitors?

The use of false advertising by a business can damage its competitors’ businesses in a variety of ways. In some cases, a company’s use of false advertising can hurt a competitor’s chances at selling products, it can take away business opportunities, and it can even hurt the competitor’s image or reputation.

Fortunately for the competitors, the Lanham Act (Section 43[a]) may offer help if the competition is making false or misleading advertising or labels. Under this Act, competitors can file claims of false advertising.

How does false advertising affect customers?

False advertising can affect a customer’s health and wallet. Ads are difficult to avoid, they’re seen all over, from newspapers, to billboards, to radio and television, to the internet to the sides of cars. These ads market and promote products and services such as medicine, fitness, clothing, food, vitamins, cigarettes, alcohol, phones and technology, and more; products that people commonly purchase. If false advertising went unchecked, these products and services could really affect a person’s monetary situation, but it could also damage their health.

That’s why the Federal Trade Commission has truth-in-advertising laws that require advertisements to be truthful and when appropriate, backed by evidence and scientific data. However, while this sounds great in theory, many businesses continue to put forth false advertisements that can harm customers.  

To see examples of false advertising, click here.