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Monday, July 29, 2013

The Supreme Court and Review of Commercial Speech

Micah L. Berman, Ohio State University, has published Manipulative Marketing and the First Amendment. Here is the abstract.

The conventional wisdom is that the Supreme Court’s First Amendment review of commercial speech restrictions has gradually become more and more stringent over time. Today, the Court’s commercial speech doctrine is deemed "an amalgam of strict scrutiny and intermediate scrutiny," leaning ever further in the direction of strict scrutiny. Many have speculated that the Supreme Court is on the verge of granting full First Amendment protection to commercial speech, eliminating the long-standing doctrinal distinction between commercial and non-commercial speech. 

This conventional narrative is correct – but only to a point. What this narrative misses is that the Supreme Court’s review has become more rigorous over time, but only for a certain type of commercial speech regulation: laws that restrict non-misleading, informational advertising in order to influence consumer behavior. A majority of the Court sees this type of regulation as unwarranted – indeed offensive – governmental paternalism. However, the Court has been, and remains, far more willing to uphold regulations on commercial speech where the governmental purpose is not to keep information from consumers, but to protect the fairness of the commercial transaction. Indeed, the Court arguably views this latter purpose as the only legitimate reason for the government to regulate commercial speech. 

The commercial speech doctrine is fundamentally based on the premise that advertising communicates information to consumers, allowing them to make more informed choices. Increasingly, however, common advertising techniques do not rely on communicating information; instead, they seek to influence consumers at a sub-conscious or emotional level. Behavioral and neurological research over the last several decades suggests that these sub-conscious cues can powerfully influence consumer choices, and this research provides the foundation for many modern marketing techniques. Marketers use such research to inform "the layout of stores, the music playing in the background, and the lighting. . . logos, colors, displays, and the look of the products" and much more. All of these marketing practices are intended to impair, not further, rational decision-making.

This article will argue that non-informational marketing practices intended to sub-consciously influence consumer decision-making are entitled to limited, if any, protection under the First Amendment. When the governmental purpose in regulating commercial speech is to prevent marketers from biasing consumer decision-making in their favor, there is a strong normative and doctrinal case that the courts’ review should be deferential. 

The article will focus on a several examples of this type of manipulative marketing, with specific attention paid to New York City’s proposed restriction on tobacco product displays. Internal tobacco industry documents demonstrate that the "powerwalls" of tobacco products in retail stores (which are controlled by tobacco manufacturers through contracts with retailers) are carefully engineered to manipulate consumer perceptions and decision-making. These displays communicate little, if any, substantive information about the products, but they have a measurable impact on youth perceptions about the popularity and safety of tobacco products, leading to increased willingness to experiment with tobacco. For adult smokers, and particularly those attempting to quit, tobacco displays trigger powerful cravings that can overpower rational decision-making and prompt impulse purchases. Although courts have been skeptical of restrictions on informational tobacco advertising, I argue that there are strong First Amendment arguments for upholding restrictions on non-informational, misleading advertising techniques such as the tobacco "powerwalls."

Download the full text of the paper from SSRN at the link.

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