Assessment Of Psychological Advertising Along Consumer Rights And The Rule On Section 5 Of The Federal Trade Commission, Part 1 Of 2: Unfairness Doctrine

Abstract

Over a century of research and empirical findings have linked advertising with consumer choice based on affective information processing, which many researchers emphasized as unconscious brain processing. This paper examines a variety of empirical findings and historical data on psychological or affective processing which provides evidence that psychological advertising affects consumer behavior and choice. Thereafter, building on existing research and literature, we analyze the legal implications of psychological advertising to stimulate affective or unconscious decisions that impairs rational choice and thus harmful. Based on this argument, we analyze the current federal consumer protection law regulating advertising under Section 5 of the Federal Trade Commission Act (“FTC Act”) which bans unfair and deceptive practices, then present rationales for change followed by a framework for revision. The objectives of such change is to ensure that this regulation upholds consumer rights and provide a consumercentric process that respects free choice. One outcome of this proposal will be a ban on advertising practices that utilize psychological stimuli. The framework will focus on expanding the “unfairness” doctrine of the FTC Act. The Federal Trade Commission (“FTC”) states that “unfair acts or practices injure both consumers and competitors because consumers who would otherwise have selected a competitor’s product are wrongly diverted by the unfair act or practice,” thus an effective customer-centric regulation could postulate a healthier economy.