us-ftc-advocacy-filings-fe163760627a442680db33ea3f2e19e3•FTC Staff Comment Before the Idaho State Board of Chiropractic Physicians Concerning Proposed Amendments to Board Rules
FTC Staff Comment Before the Idaho State Board of Chiropractic Physicians Concerning Proposed Amendments to Board Rules
us-ftc-advocacy-filings-fe163760627a442680db33ea3f2e19e3FTC Staff Comment Before the Idaho State Board of Chiropractic Physicians Concerning Proposed Amendments to Board RulesAdvocacy Filing
FEDERAL TRADE COMMISSION COMMISSION AUTHORIZED Seattle Refional Office 2806 Federal BuUdiIll 9US Secoad Aw:Due Seattle, VtUhiDgton 98114 (206) 442-4656 Deoember 7, 1987 Dorothy Hod~8on, Chairman Idaho State Board of Chiropractic Physicians Bureau of Oooupational Lioensee Department of Self-Governing A~&nciee state of Idaho 2417 Bank Drive *312 Bois8, Idaho 83705-2598 ~ Attention: M. D. Gregersen, Chief Bureau of Oooupational Licenses ----- - -------- Dear Ms. Hodgson: The Seattle Regional Office and the Bureaus of Consumer Protection, Economics and Co~petition of the Federal Trade Commission are plea.ed to have the opportunity to comment on the proposed amendments to the rules of thQ Idaho State Board of Chiropractic Physicians. 1 In our comments, we focus upon Section H of the proposed rules. This section governs advertising by chiropractic physicians. Several aspects of the proposed changes to Section H are likely to benefit consumers. For example, the Board's general limitation of its re.trictions on advertising by chiropractio physicians to fraudulent, false, deceptive or misleading advertising 1s likely to benefit consumers by encouraging all forms of truthful, nondQcQptiv8 advertising. The Board's proposed deletion of its present restrictions on "sensational or fabulous" .tatements and on advertisin~ that has "a tendency to ... impose upon credulous or ignorant persons" may benefit consumers by removing reltrictions that may d6ter some torme of truthful, nondeceptive advertising. 1 These comments represent the vi.ws of the Seattle Regional Ottice and the Bureaus of Con.umQr Protection, Eoonomics and Competition of the Federal Trade Commil&ion. Th~y do not necessarily represent the views of the Commission or any individual Commissioner. The Commission, howevQr, has authorized thQ lubm15Qion of thQ,e commentl to you. _._---- --_. _.' ---
Wa are concerned, however, that two provisione in the proposed amendments may harm consumers by rGstricting the dissamination of truthful information. These provieionG limit advertiaing by chiropractic referral service& and prohibit adverti.inq that Mis likely to appeal primarily to~a'lay person's. fear., ignorance or anxieti&s regarding his stateO~ihe~lth or ..,physical well-being. M Bocauue theee provisions may o.eter truthful, nondaceptive advertising without providing countervailing benefits, the Board may wish to consider deleting these restrictions from its propolJal. Specifio instances of false or mialaadinq advertising that fall within these categorieo would, of cour.e, still be prohibited under the Board'S general prohibition of fraudulent, false, misleading or doceptive advertiJS1ng. I. Interest and Experience Qf the Federal Trade CommisqiQn The Federal Trade Commission is empowered under Section 5 of the Federal Trade Commission Act, 15 U. S. C. §45, to prevent unfair methods of competition and unfair or deceptive acta or practices in or affecting oommerce. Pursuant to ita statutory mandate, the Commission has attempted to encourage competition among members of 1i~ens~rof.s.iQns~_-the_maxLmum-sxtan~- ----------compatibie with other legitimate state and federal goala. 2 The Commission's staff has examined the competitive effects of restrictions on the advertising and business practices of Btate- licensed professionals, including physicians, dentists, optometrists and lawyers. Our goal is to identify and seek the removal of restrictions that impede competition or increase coste without providing countervailin9 benefits to con~umers. 2 Under Section 6 of the Federal Trade Commission Act, 15 U. S. C. S 46/ the Commi.sion is authorized to make public the information it haa gathered on oompetition end coneumer welfare issues. Pursuant to this .ection, the Commission's staff has preViously submitted comments to state governments and professional associations on the regulation of professional advertising. See. Ir S., Comments of the Federal Trade Commission Staff on the Rules of Professional Conduct of the New Jersey Supreme Court, submitted to the Committee on Attorney Advertising of the New Jergey supreme Court, November 9, 1967; Comments of the Federal Trede Commission Staff on the rules of the New Mexico State Board of Chiropractic Examiners, December 17, 1986; Comment. of tho F.deral Trade Commis.ion St~ff on the RQgulations of the Virginia Board of Dentistry, April 3, 1966 (available from the Offics of Public Affairs, Federal Trade Commission). 2
The Commission has found some restrictions on .truthful advertising by professional. to violate S~ction 5 of ' the Federal Trade Commission Act. 3 These Commission findings are consistent with reoent U. S. Supreme Court decision5, which havQ'struoK down various restrictions on professional advertising that restrict the flow of useful information to consumers without produoing countervailing benefit5. 4 Studies oonducted both by the Commission .taft and by aoademic rQsea~chere also &upport the elimination of restrictions on truthful, nondecQptive advertising 3 ~ Amerioan Medical As.oeiation, 94 F.T.C. 701 (1979), Off'd, 638 F.2d 443 (2d Cir. 1980), aff'd memo by an equally divided CQurt, 455 U. S. 676 (~98~ho;'ding that thlLAMlLhad-- il~.ga~y consprred to restrain competition among physicians by suppressing, through its ethical gUidelines, truthful advertieing and other forms of solicitation by member phy'icians.) The AHA decision speoifically held Mthat broad bans on advertising and solicitation are inoonsiltent with the nation' s publio polioy." 94 F.T.C. at 1011. ~. Wyoming State Board of Chiropractic Examiners, File No. 861-0019 (October 14, 1987) (tentatively approved consent order) (settling charges that the Board, through its re~ulations, had restrained competition by restricting truthful advertising of prices, terms and other information)i Wyomin9 State Board of RegiQtration in Podiatry, 107 F,T,C. 19 (1966) (consent order) (settling char9~s that the Board, through it. regUlations, h~d restrainQd competition among podiatrists by restrictins the truthful aavertising of podiatrio gooas and services); and Louisiana State Board of Dentistry, 106 F. T. C. 65 (1985) (oonsent order) (.ettling charges that the Board, through its regulation., had restrained competition by restricting the truthful advertising of prices and claims of professional 5uperiority. 4 ~, ~, ZaudQrer v. Office of Disciplinary Couneel of the Supreme Court of Ohio, 471 U. S. 626 (1985) (holding that an attorney may not be disciplined for Goliciting legal business through printed advertising containing truthful and nondeceptive information regarding the legal rights of potQntial cliente or for using nondeoeptive illuQtrations or pictures); Bates v. Stnte Bar of Arizona, 433 U. S. 350 (1977) (holding a state cuprQme court prohibition on advQrtising invalid under the First Amendment and according great importance to the role of advertising in the efficiQnt functioning of the market for professional aervices); and Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U. S. 748 (1976) (holding a Virginia prohibition on advertising by pharmaciste invalid). 3
by professional.. For example, cQvere.l atudie" indicate that prices for professional goods and services are higher when advertisinq i. restricted or prohibited than whQD it 1e allowed. 5 Empirical evidence also indicates that, even though 'such restrictions lead to increased prices, thQY do not~ncrease the quali ty of the II ervi 088 providec1 to oons umers. 6 ':! II. Proposed Deletion of Restrictions on SenSfjti9nal or Fabulous Statements and 00 Advertising That May Tend to Impose Upon Credulous or IgnQrant Persons The proposed amendments would delete.the Board's present restrictions on "sensational or fabulous" statements and on adverti~ing that "has a tendency to ... impose upon credulous or ignorant persons. H Since these provisions may deter truthful, nondeceptive advertising, the proposed deletion of thQse restrictions may benefit consumers. Specific instances of false or misleading advertising that fall within these cDtegories would, of course, still be prohibited under the Board's general prohibition of fraudulent, false, mialeading or deceptive advertising. _ 'I'lJe-Board' s ourr-en~an on seneatlonar or fabulous- --- advertising may deter truthful advQrtising beoaus~ it is subject to broad and subjective interpretations. Such interprotations may prohibit nonQeCeptiv8 statements or innovative marketing techniques that are commonly used by other providerl of goods and services. For example, the use of certain words or phrases, such as IIluperbll or "money-back guarant,-e ll , or certain types of advertising techniques, such as televis~on jingles, may be 5 Bureau of Eoonomics and Cleveland ~Qgional Office, Federal Trade Commission, Improving Consumer Acoe~s to Legal Services: The Case for ~Qmoving Restrictions on Truthful Advertising (1984); Bureau of EoonomioQ, Federal Trade Commission, Effects of Restrictions on Advertising and Commeroial Praotioo in the Professions: The Case of Optometry (1980); Benham and Benham, Be~ulat1ns Through the Professions; A Perspective on Information Control, 18 J. L. & Econ. 421 (1975); Benham, The E;ffect Of AdYe:ctisin9 on the Price Of Eyeglau;es, 15 J. L. & Econ. 337 (1972). 6 Bure8U of Economics, Federal Trade Commi •• ion, Effect& of Restriction. on Advertising and Commercial Praot1CG in the Professions: The Case of Optometry (1980); Cady, Restricted Advertising and Competition: The Ca•• of Retail Drug; (1976); MoChesney and Muris, Ihe Effect of Adyertising on the QUplity of Legal Services, 6S A. B. A. J. 1503 (1979); Muri" and McChesney, Advertiling and the Price and Quality of Legal Seryice6i The Case for ~egal Clinics, 1979 Am. B. Found. Re5Gle.rch J. 179 (1979), 4
viewed as sensational when USQd to advertiue professional services. Such adverti8emente may, however, be particularly effective in communicating accurate information to consumers. The Board'. current prohibition of advertisinq that has a tendency to impose upon credulous or ignorant pereon~ may ~1milarly deter the ~i.8emination of truthful, nondeceptive information. Under this standard, a chiropraotor could be held responsible for ensuring that his or her advertisements will not b. unreasonably misinterpreted by a few uninformed or unrepresentative members of the tar98t audience. Such a standord may be broader than necessary to protect consumers from falee or deceptive ~dvertising. For example, in the FedGral Trade Commis6~on' s 1983 Deoeption Policy Statement, the Commission noted that, to be deceptive, an advertisement mu&t be likely to mislead consumers acting rQ~sonably under the circumetanoes. 7 Imposing responsibility for unreasonable interpretations of their advertisements upon chiropractors may significantly deter truthful advertising about chiropractic services~ thereby depriving chiropractors of a significant competitive device and denying potentially valuable information to consumere. As discussed below, howQver, if particular advertisements are targeted a~roup. tha~_~s liKet~to-p~-partic~lyoredu~UG ------or-I~norant, it may be appropriate to Qxamine the advertisements from the perspective of the typical member of that group. 8 By Qmploying Guch 8 standard in enforcing its general prohibition of deceptive or misleading advertising, the Board should be able to effectively prohibit adverti&ing that is likQly to deoeivo or mislead particularly susceptible groups. 7 Cliffdale Associates, 103 F.T.C. 110, 174 (1984) (appendi:K to opinion.) The Commis.ion ha~ also held that: An advertiser cannot be charged with liability with resp~ct to every conceivable misconception, however outlandish, to which his representations might be subject among the foolish or feeble-minded. Some people, becnuse of ignorance or incomprehension, may be misled by $ven B scrupulously honest claim. Perhaps a few mi5guided souls believe, for example, that all "Danish paetry" is made in DenmarK. I. it therefore an actionable deception to advertise "Danish pastry" when it is made in this country? Of course not. A representation does not become "falle and deceptive" merely because it will be unreasonably misunder&tood by an in.ignificant and unrepresentative sQgment of the class of pereons to whom the representation is a~dre88ed. H, in;; W, Ki r 0 h n G r, 6 3 F. T. C. 1 2 8 2, 1 2 9 0 (l 9 6 3 ) . 8 ~ Cliffdale AssooiateEi, 103 F.T.C. 110, 179 (1984).
III. Proposed Restrictions on Advertising by Chiropracti~ Referral Services and on Advertisements Likely to Appeal to Fearl. Ignorance or An~ieties Cgncernin9 Heal;h' Sections H(2) and H(4) of the Board's proposedi rules impo:3e ~new restriction. on advertising by chiropractic referral eorvices and prohibit advertisements that are "likely to appeal primarily to a lay person's fears, ignorance or anxieties concerning his health or physical well-being." Since both of these provieions may prohibit the dissemination of truthful, nondeceptive information, the Board may wish to consider narrowing or deleting Section. H(2) and H(4). 9 In general, referral services serve a valuable function for health care professional, and for consumers. Such eervicee enable practitioners to pool their advertising resources while maintaining independent practices. Referral services also benefit consumars by providi~g useful information about the availability, locations, hours or areas of expertise of particular chiropractors. Section H(2) Of the proposed rule states, however, tha~;_~__ is 1I~~sle~din...g and dec_ap-±i.Yef~L-iL---- ------chTropractor-or group of chiropractors to advertiso a chiropractic referral service or bureau unless each adv~rtisement specifically names each of the individual chiropractors who are participating in such service or bureau. II Advertisements that do not contain the names of all members of the referral bureau are not, however, inherently deceptive and thus do not seem appropriate targets for a total ban. Furthermore, requiring a chiropractic referral service to list all members of the service in each advertisement i. likQly to be undUly costly. Indeed, 9 It is our understanding that Section H(2) is not intended to prohibit all advertisements that make only a partial disclo6ure of relevant facts. An absolute prohibition on advertieemonts that make only a partial disclosure of relevant facts would seem overly broad since, by their vQry nature, most advertisernQnts could not disclole all the facts relevant to decision. to select particular chiropractic services or particular chiropractors. The wordins of Section H(2) may sugge~t, however, that advert~.ementQ that make only a partial disolosure of ~ll relevant facts are prohibited. The Board may wish to clarify the language of the introductory sentence of Section H(2) to make it clear that this section prohibits only advertisements that omit material facts in a manner that is likely to deceive consumers. It is also our under.tanding that Section H(2) prohibits advertisements that omit material facts in a mannor that is likely to deceive consumers whether or not such advertisemonts fall within the specific categories let forth in Seotion H(2). To make this clear, the Board may wish to replace the phraee "more specifically" with the phrase II for eXllmple" in the second Qentence of Section H(2). 6
this requirement may render some forms of advertising, euch as radio or television advertising, prohibitively expensive, ~s well as significantly le.s effective. Placing such a bu~denecN~ requirement upon chiropractic referral services would Deem harmful both to chiropractors and to consumer" wh¢ ~ay be .denied ace ••• to useful information about chiropractio sorvices."- . It ia our understanding that the proposed restrictions on advertisin9 by ohiropractic rQferr.al services were designed at least in part to address inltance& in which a few chiropractic practitioner. may mislead consumers by deceptively advertising themselvel as ohiropractic referral services. Such decoptive practi~.s could, however, be addressed under the Board' E general prohibition of £a18Q, misleading or deoeptive advertising. In the alternative, the Board could draft a narrow re6~riotion that would prohibit this type of·practice without imposing burdensome restrictions on legitimate referral servioes. As presently drafted, this provision would actually plaoe a 9reate~ burdon on legitimate referral servioesthat have large numbers of members than on referral .ervices that have only a few members. The Board' 8 proposed prohibi tion of agver~;.~A~g tha~ i~L In-e"1.yt-o appearprimarl.1.-y to the fears, ignorance or anxieties of lay persons regarding their health or physical well-being may also deter truthful, nondeceptive advertising by chiropractic physicians. For example, this provision appears to prohibit truthful, nondeoeptive advertising that addresses prospective patients' concerns or anxieties about their h~alth even if those concerns or anxieties are fully jU8tifiQd and could be alleviated by appropriate chiropractic trQatment. Moreover, this prohibition could be construed to prohibit virtually any advertisement designed to attract the attention of, or even to prOVide truthful information to, persons with particular physioal problems that could be helped by chiropractic physicians. As a r8sult, this restriction may stem the flow of useful information about chiropractic sQrvices to the very consumers who need and de~irQ that information tho most. We appreciate the Board'S interest in prohibiting advertisement. that prey upon lay persons' apprehensions about their health, and we commend the Board'S efforts to clarify its previous standard. However, a prohibition on all advertising that may appeal to such apprehensionQ seems overly broad. The Board can attaok .peoific instances of abusive adverticing that miqht fall within this oategory under its general prohibition of misleadinq or deceptive representations. In considering such a6vertiaing, the Boar6 may wish to take into aocount the possibility that the advertising is tarqeted at groupe that may not interpret it in the same manner that an ordinary, reasonable oonsumer would. In its Deception Policy Statement, the Commission discussed advertising directed at these types of consumers. The Commis~ion indioated that terminn11y ill consumers, for example, might bG particularly IUlcGptible to exaggerated claims of cures. In such cnees, the Commicsion 7
1n~icate~ that it woul~ evaluate the advQrtising "from the perspective of how it aff.cts the ordinary member of (the) qroup.nlO Thus, in examining chiropractic advertieing that may prey upon lay persons' apprehensions about their hQa-l-th, tho Board may wish to evaluate the advertising from tha-perspective _of the orOinary member of the sroups to whom such aavertising is ~arget60 in determining whether the advertising is mieloading or deceptiv •. Furthermore, in some inltances, misleading or doceptive aOvertising of this type may be proscribed by Section H(3) of tho Boar~'s proposed rules, which prohibits advertising that creates false or unjustified expectations of beneficial troatment or successful cure. Addressing specific instances of false or mi,leading advertiaing seems preferable to prohibiting all advertising that appeals primarily to pro~pective patients' concerns about their health. IV. Conclusion The Board'i proposed limitation of its restrictions on aOvertising by chiropractic physicians to fraudulent, false, _ ---.,mi~ad-1-n9-or-11e-ee-pti-v.~ertising-isJ.TKe-ly to prove be-neficial to consumers. The Board may, however, wish to consider narrowing or deleting ita broad proposed restrictions on advertising by chiropractic referral .ervices and on advertising that ia likely to appeal primarily to the fears, ignorance or anxieties of lay persons regarding their health or physical WGll- being. Such restrictions could have the unintended effoct of inhibiting the dissemination of truthful information about the nature and AvailaDility of chiropractio services. We appreciate your Willingness to consider our comments on the Board's proposed rules. Please feel free to call or write if we can be of any further assistance. Sincerely, ~~r:_~~~ George ~~ Director Seattle Regional Office 10 Qliffdale Associates, 103 F.T.C. 110, 179 (1984). 8
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