Key Takeaways

  • Advertising law requires that all business claims be truthful, non-deceptive, and supported by evidence before publication.
  • The Federal Trade Commission (FTC) enforces advertising regulations, including substantiation, disclosure, and consumer protection requirements.
  • Digital marketing introduces unique risks: influencer disclosures, data privacy, native advertising, and targeted ads must meet strict legal standards.
  • Comparative and competitor advertising is legal but must avoid misleading claims, disparagement, or unverifiable superiority statements.
  • Violations of advertising law can result in fines, injunctions, lawsuits, corrective advertising orders, or even criminal penalties.
  • Special considerations apply to vulnerable audiences (like children) and regulated industries (healthcare, finance, alcohol, and tobacco).
  • International campaigns require compliance with foreign advertising regulations in addition to U.S. laws.

Advertising and Marketing Law

All businesses need to have strong marketing strategies in place for success, but they must be careful to ensure that their advertising is fair and honest. Any claims made about what the company offers are required to be lawful, truthful, and not misleading.

The rules and regulations regarding marketing apply to many aspects of a business, including:

  • Product labeling
  • Email and mail campaigns
  • Telemarketing
  • Product results claims
  • Environmental and health claims

The laws of advertising and marketing encompass major topics like fair trade and honesty in advertising. Businesses are not allowed to say whatever they want to get consumers to buy their products. Certain claims must be proven in order to use them for marketing.

For instance, a health drink cannot claim that it will cause customers to lose five pounds in two days unless the company has sufficient research and proof to back up that claim.

Companies cannot prey on the sensitivities of consumers simply to get more people to buy their products. A bag cannot be advertised as being made of completely recycled materials unless it actually is.

Trademarks are also protected under advertising and marketing law. Companies are prohibited from infringing on one another's trademarks in any way. In order to avoid accidental trademark infringement, businesses can perform a search online to be sure that any names, slogans, or logos they hope to use in marketing are not protected.

Regulatory Framework and Legal Foundations

Advertising law in the United States is shaped by a combination of federal statutes, state consumer protection laws, and industry-specific regulations. At the federal level, the FTC Act, Lanham Act, and Fair Packaging and Labeling Act are among the most significant statutes. Together, they prohibit deceptive or unfair trade practices, provide remedies for false advertising, and mandate accurate labeling and disclosures.

In addition to federal law, state attorneys general and consumer protection agencies can pursue enforcement under state statutes — often called “little FTC Acts.” Businesses must comply with these local rules, which sometimes impose stricter standards than federal law.

Self-regulatory bodies such as the National Advertising Division (NAD) and Children’s Advertising Review Unit (CARU) also influence industry practices. While their decisions are not legally binding, they often shape enforcement priorities and consumer expectations.

Truth-in-Advertising Principles and Legal Standards

At the core of advertising law is the principle that advertising must be truthful, non-deceptive, and substantiated. Companies must have reliable evidence for any objective claims they make about a product or service before those claims are published. Misleading statements — even if unintentionally made — can lead to enforcement actions, fines, and civil liability.

Key legal standards include:

  • Truthfulness: All claims must accurately represent the product’s performance, quality, price, and benefits. Puffery (e.g., “the best coffee in the world”) is typically allowed, but objective claims (e.g., “reduces cholesterol by 30%”) require evidence.
  • Substantiation: Businesses must possess competent and reliable scientific evidence or other credible proof before making claims, especially those related to health, safety, or efficacy.
  • Materiality: A claim is considered deceptive if it’s likely to affect a consumer’s purchasing decision.
  • Implied Claims: Advertisers are also responsible for what consumers reasonably infer from an ad — not just what is explicitly stated.

Companies should also be cautious when using “free,” “guaranteed,” or “risk-free” language, as these terms are heavily scrutinized under advertising law.

Special Advertising Categories and Heightened Scrutiny

Certain advertising categories attract greater regulatory attention due to potential risks to public health, safety, or financial stability. These include:

  • Health and medical claims: Products making claims about disease treatment, weight loss, or supplements require competent and reliable scientific evidence.
  • Financial and investment products: Advertising for loans, credit cards, or investment services must include clear disclosures of terms, fees, and risks under the Truth in Lending Act and SEC regulations.
  • Environmental claims (“green marketing”): Terms like “eco-friendly,” “biodegradable,” or “sustainable” must meet the FTC’s Green Guides, which require substantiation and clarity.
  • Children-directed advertising: Strict rules limit marketing to minors, especially for products like food, toys, or digital apps, under laws such as the Children’s Online Privacy Protection Act (COPPA).

Advertisers in these sectors must adopt heightened compliance processes, including legal review and third-party verification, before publishing campaigns.

Federal Trade Commission

The FTC (Federal Trade Commission) governs any marketing or advertising that takes place in the United States through their enforced regulations. Trade practices from state to state are also regulated by the FTC.

In an effort to keep companies honest about their products and controlled in their advertising methods, the Federal Trade Commission regulates how products are branded and what their labels claim, and it has rules regarding how customers may be reached. The use of mail flyers, email announcements, phone calls, and door to door sales are all governed by the FTC. Any labels that suggest certain health benefits, environmental features, and more are controlled and must be warranted in order for the FTC to allow their use.

Consumers want to be able to trust what they read on labels or hear in commercials, so the FTC is working to keep companies trustworthy. The regulations put on the advertising and marketing world affect company operations in many ways.

The slogan of the Federal Trade Commission is "protecting America's consumers." By putting requirements on companies to label and advertise their services or products truthfully, the FTC attempts to live up to their slogan. When a company makes a specific claim about their product, the FTC requires that it be "evidence based." If a vitamin business wants to print that their Vitamin C supplements are 99 percent effective in preventing colds, they have to show proof of that claim.

Digital Marketing, Endorsements, and Social Media

The rise of online marketing and influencer promotion has introduced new layers of complexity to advertising law. The FTC applies the same fundamental rules to digital advertising as it does to traditional media, but additional disclosure requirements often apply.

Influencer and Endorsement Guidelines:

  • Influencers must clearly and conspicuously disclose material connections to the brand (such as payment, free products, or partnerships).
  • Disclosures like “#ad” or “sponsored” must be visible and unambiguous — buried hashtags or vague phrases may not meet FTC standards.

Native Advertising and Sponsored Content:

  • Content designed to blend into a platform’s editorial style must still be clearly labeled as advertising.
  • Phrases like “paid promotion” or “sponsored content” should be used to avoid misleading consumers.

Data Privacy and Targeted Ads:

  • Online ads that use consumer data must comply with privacy regulations, including state laws like the CCPA and international standards like the GDPR.
  • Companies should also avoid “dark patterns” — manipulative design tactics intended to trick users into purchases or subscriptions.

Influencer Liability and Platform Responsibility

Influencers and content creators are not the only parties liable under advertising law — brands themselves remain responsible for ensuring that endorsements and promotions comply with FTC regulations. Businesses can be held accountable for influencer misrepresentations if they fail to provide training, monitor content, or require corrections when posts are misleading.

In addition, platforms hosting paid promotions (such as social networks and e-commerce marketplaces) are increasingly expected to support compliance efforts. Many now require advertisers to self-certify that campaigns meet legal standards and to use built-in disclosure tools. Failure to do so can result in removal of ads, account suspensions, or regulatory referrals.

The Division of Advertising Practices

Within the FTC, the Division of Advertising Practices works to keep consumers informed and protected when it comes to marketing and advertising practices that are intentionally deceptive or unfair. They pay close attention to any false advertising that could cause health or safety issues and those that could hurt the economy. In the case that dishonest advertising is found, this division of the FTC will bring legal action against the guilty party.

This division of the FTC gets law enforcement involved, when necessary, to help catch and prevent fraud in advertising. There are international and federal law agencies that keep an eye on the safety and health products out there. The Division of Advertising Practices works together with such agencies to ensure that any health or safety claims are legitimate.

Such rules, regulations, and enforcement is very important, especially when it comes to child safety. The FTC helps keep certain industries from targeting children, like the tobacco and alcohol industry.

Advertising Investigations and Enforcement Trends

The FTC’s Division of Advertising Practices often initiates investigations based on consumer complaints, competitor reports, or referrals from other agencies. Investigations may involve requests for substantiation data, internal marketing communications, and consumer testing records.

Recent enforcement trends show increased scrutiny of:

  • “Dark patterns” — manipulative design tactics that mislead users into purchases or subscriptions.
  • Subscription and auto-renewal programs — which must provide clear terms and easy cancellation options.
  • AI-driven marketing — including claims about algorithmic accuracy or personalization capabilities.

Companies should proactively audit their advertising materials and maintain robust documentation to minimize risk if targeted for investigation.

Comparative Advertising and Competitor Claims

Comparative advertising — where a company directly or indirectly references a competitor — is legal under advertising law but carries heightened risk. Claims must be truthful, objective, and verifiable. Misleading comparisons can lead to FTC action or Lanham Act lawsuits for false advertising.

Best practices include:

  • Ensuring that all product comparisons are based on identical conditions or objective metrics.
  • Avoiding disparaging language or unprovable superiority claims.
  • Clearly identifying the basis of comparison (e.g., “based on price per ounce” or “tested under controlled lab conditions”).

Competitor challenges are common in industries like consumer goods, healthcare, and telecommunications, where claims of performance or efficacy can heavily influence purchasing decisions.

Lanham Act Litigation and Competitor Challenges

In addition to FTC enforcement, competitors may bring civil actions under the Lanham Act if they believe a rival’s advertising is false, misleading, or unfair. These lawsuits often arise from claims that affect purchasing decisions, such as exaggerated performance comparisons or false product superiority.

To defend against such challenges, businesses should:

  • Conduct pre-launch legal reviews of comparative ads.
  • Use objective, verifiable data to support claims.
  • Keep detailed records of testing methodologies and results.

A successful Lanham Act claim can lead to injunctions, corrective advertising orders, and monetary damages — underscoring the importance of rigorous compliance.

Why Advertising Laws and Regulations Are Good to Know

It is a very good idea to have a good understanding of the current advertising laws and regulations in your area when developing a marketing strategy for a business. Meeting with an experienced lawyer can help avoid any legal issues in the future.

Advertising campaigns can be very costly and time consuming. Understanding the appropriate advertising laws and regulations can help make sure a company gets a great start when first putting their name out there.

Penalties, Enforcement, and Risk Management

Violations of advertising law can result in significant legal and financial consequences. Enforcement may involve civil penalties, injunctions, corrective advertising orders, or class action lawsuits. In severe cases — particularly those involving health and safety claims — criminal liability is possible.

To mitigate risk, businesses should:

  • Conduct legal review of all major campaigns before launch.
  • Establish internal advertising compliance programs and train marketing teams regularly.
  • Maintain documentation of claim substantiation and consumer testing data.
  • Monitor competitor complaints and National Advertising Division (NAD) proceedings, which can influence industry standards.

International campaigns require additional diligence, as countries like the UK, Canada, and Australia have their own strict advertising regulations and enforcement bodies.

International Advertising Compliance

For companies operating globally, advertising law compliance must extend beyond U.S. regulations. Jurisdictions such as the UK Advertising Standards Authority (ASA), Canadian Competition Bureau, and Australian Competition and Consumer Commission (ACCC) enforce their own strict advertising standards.

Key international considerations include:

  • Language and translation accuracy: Misleading translations can constitute false advertising.
  • Cultural sensitivity and consumer expectations: Ads must align with local norms and consumer protection standards.
  • Cross-border data and privacy rules: Targeted advertising must comply with laws like the GDPR in the EU or PIPEDA in Canada.

Consulting with legal counsel familiar with each market is essential to prevent costly penalties and reputational damage.

Frequently Asked Questions

  1. What is the main purpose of advertising law?
    Advertising law ensures that marketing communications are truthful, non-deceptive, and supported by evidence, protecting consumers and promoting fair competition.
  2. Can a business be liable for influencer advertising violations?
    Yes. Companies are responsible for ensuring influencers disclose paid relationships and do not make misleading claims on their behalf.
  3. Are comparative ads legal under advertising law?
    Yes, but they must be accurate, substantiated, and non-disparaging. False comparisons can lead to FTC action or Lanham Act lawsuits.
  4. What happens if an advertisement violates FTC regulations?
    Penalties can include fines, injunctions, corrective advertising orders, or even criminal charges in severe cases.
  5. Do advertising laws apply internationally?
    Yes. Businesses marketing globally must comply with foreign advertising laws, privacy regulations, and consumer protection standards.

If you need help with advertising laws and regulations, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.