The topic of regulation of advertising in the context of constitutional protection of speech seems to be equally important as controversial. The endless debate has involved numerous voices of specialists from different fields. Since this is the nature of advertising itself that it cannot be defined within the border of one sphere of life but should rather be perceived as the mechanism at the intersection of political, economic, social and cultural activities influencing them but also being shaped by them. Thus, approaching the subject "the focus should be, not on advertising practices, but on the specific set of institutional relationships through which advertising is tied to the social issues that concern us most". Having in mind the power of the media, advertising being a part of which, it is easy to realize the importance of these relationships and independencies.

The controversy, in turn, arises from the fact that the classification of advertising as a particular type of speech is not constitutionally defined but rather comes from the traditional or customary typology supplied by the courts and monitoring bodies on case to case basis.

The following paper aims at discussing the issues of the above mentioned debate and analyzing the status of advertising in the context of the First Amendment and its implications for the broader social environment. It further presents the existing regulatory bodies created to maintain or, if necessary, to enforce the standard of communication agreed upon for the benefit of certain interest groups, be it customers, competitors or community as a whole. The description of particularly monitored fields together with presenting the means and vehicles of control and punishment will follow. Finally, the paper will examine the regulatory issue from the point of view of the party most involved namely, advertisers and their executive bodies - advertising agencies. The few closing remarks will undertake the attempt of putting together the puzzles of the picture more in the form of pointing to the complexity and multi-layer structure of the problem than in drawing any final conclusions.

POSITION OF ADVERTISING WITHIN THE FREE SPEECH CONSTITUTIONAL AMENDMENT

The First Amendment to the American Constitution states that "Congress shall make no law abridging the freedom of speech...or of the press...". Despite the absence of any further definitions and explanations the speech under the protection of the Bill of Rights has been traditionally understood as the political not commercial one. This 'common sense distinction' has been perpetuated by judges, politicians and philosophers who believed that the main purpose of the clause is to foster open and unrestricted political debate which would lead to the constant improvement and refinement of the government and will enable the flourishing of truly democratic system. In fact it is hard to trace what was originally meant by the Founding Fathers under the name of 'speech' and although it is never clearly stated that commercial speech is protected it is never excluded, either. This ambiguity polarized the opinions and initiated the debate tracing the flow of which seems interesting and crucial to understanding later shape of the regulatory bodies and regulations itself. The double side argumentation presented in the paper is based on the study from the book by Michael G. Gartner: Advertising and the First Amendment.

The opponents of including commercial speech into the speech under the protection of the First Amendment formulated their argumentation along the following lines:

1. Commercial speech does not apply to political decisionmaking and has no influence on the form and conduct of the government.

2. Commercial speech does not deal with the sphere of ideas but, to the contrary is concerned with the exchange of goods while the popular understanding of the First Amendment assumes the protection of "an open exchange of views in order to create a competitive marketplace of ideas, which will in turn enhance the search for truth".

3. Commercial speech regulation is acceptable since it is not based on intolerance and the 'disapproval of the message'. In other words it is not a tool for silencing the expression of the unwelcome opinions but is rather the effect of concern for the well being and health of the community.

4. Protection of commercial speech blurs the lines and "dilutes the constitutional protection afforded other speech". Consequently, the inclusive character of the clause generally weakens the importance of protection according to the popular conviction that when everything is protected, nothing is.

5. Commercial speakers are professionals possessing high knowledge of the field they work in. Thus, much higher standards should be applied to them since their ability of assessing the accuracy, lawfulness and results of their activity is much bigger than other participants' involved in the public speech.

Before proceeding to discuss the arguments used by the proponents of including advertising into free speech clause one basic assumption used by them must be clearly stated. Historic view at the time when the First Amendment was formed shows the centrality of economy in the life Americans. Moreover, in the time of growing commercialization advertising was a very extensively used means of communication and even Founding Fathers referred to it as a vehicle for dispersing information. However, advertising itself was not yet fully developed as a separate from editorial content of the press. Neither did it occupy different position within the medium. Consequently, the distinction between the editorial and 'purely commercial' content introduced in 1942 by the Supreme Court might have been simply not realized and perceived by the Founding Fathers.

Additionally to the historic formal inseparability of commercial speech from the editorial one, content and function based inseparability seems to be yet another argument for proponents of the constitutional protection for advertising. Their arguments go as follows:

1. There is no precise distinction between free-market economy and democratic system. The former is an inherent part of the latter. All types of information, including commercial one supplied by advertising, are crucial for citizens to make their informed choices. Besides, the fields of politics and business constantly influence and shape each other. Commercial speech is partially political, never free from non-commercial implications. In an American "society, all issues that affect attitudes about access to needed goods and services are political issues. Economics is politics. Politics is economics. America is not just political democracy; it is an economic democracy as well". Consequently, economic and commercial input influences citizens' attitude toward the preferred form of government.

2. Even though advertising is not strictly the expression of ideas it definitely is the source of information for people to make decisions about allocating their resources. Especially for least educated people it is often one of few, if not the only (because of lack of time and money to pursue others), source of information. Thus, this is "an immensely powerful instrument for the elimination of ignorance" and educating citizens.

3. In response to the argument about diluting the value of constitutional protection through over inclusive rules of speech classification proponents argue that such attitude poses a threat of creating powerful institutions which would decide about the forms of speech deserving more or less protection. The very nature of such bodies opposes the principles of democracy.

The above discussion presented the theoretical debate focused around the issues of constitutional definition, distinction and status of commercial speech. Departing from this basis it should be helpful to place the role and influence of advertising within a broader social context.

PLACE AND ROLE OF ADVERTISING IN A BROADER ECONOMIC, SOCIAL AND CULTURAL CONTEXT

Keeping in mind the fact that advertising stands at the intersection of economic, social and cultural activities it seems important to present a few commonly held opinions about this aspect of commercial speech from the respective fields. The significance of such insight lies in the fact that each of the fields has contributed to the debate over the scope of regulations and influenced, or rather has been constantly influencing, its final outcome.

The views cannot be categorized as unanimously defending or criticizing the need for constitutional freedom of advertising but rather their polarity reveals the complexity of the problem to deal with.

The economic perspective points to the beneficiary effects of advertising both to the industry and consumers summing the crucial points in the following way:

1. Advertising provides the information about new products and prices available on the market facilitating the process of decision making of customers. Not only does it present the wide offer of the market but also maps the market environment with markers of brand reliability.

2. Consequently, in the highly competitive environment, it creates incentives for product research leading towards alternations and improvements to secure the leading position within the product category.

3. Fostering competition advertising affects positively product pricing leading to its lowering.

The optimistic tone of the argumentation is hampered, however, when we proceed to discuss advertising as a form of social and cultural discourse. The proximity between the economy and forms of cultural expression of images through media seems to pose some threats and difficulties. The interrelation between media and advertisers may not always be beneficial for audiences = citizens - those who are to be protected by the Constitution. This may happen because of the following reasons:

1. The phenomenon of dependence of media on advertising as the main source of income may be observed. In this context large advertisers have the power of distorting the main vehicle of democratic discourse through dictating the content especially in covering, or rather avoiding, controversial issues such like smoking, alcoholism or environmental pollution. Consequently, the extremely powerful voice that should be pluralistic and open to collective participation gets subordinated to the corporate interest of selling products.

2. Following from the above is another disturbing phenomenon namely, segmentation of the audiences. Only the audiences that are targeted by advertisers have the chance of representation in the media. This is particularly dangerous in such a multinational society as the United States since it strengthens the feeling of inequality, reinforces racial, ethnic, sexual or class stereotypes which leads to the disruption in the process of socialization and democratization.

3. Still connected with the issue of stereotyping is the broader problem of distorting reality and adopting a very narrow perspective on the way people aspire and interact within society. Only certain types of relationships are stressed and there is usually no place for the authentic experience of ordinary people. Advertising stops being a vehicle of public discourse changing into a channel of mass imagination. Ads are loosing their informative value oscillating toward more 'irrational' and 'lifestyle' appeal.

Realizing the power and intrusiveness of advertising the above evidence seems to point to its manipulative potential which definitely cannot be left unattended and allowed complete freedom under the constitution. Frequently used assumption that bad speech should be fought with more speech does not necessarily find its application here due to the enormous disparity of the involved parties. The power, money, influence and media access on the part of advertisers is incomparably larger than all the resources at the disposal of consumer interest groups. Consequently, there was a need for creating a regulatory and monitoring bodies which would help to establish the balance and more proportional and equal participation of citizens (both individual - customers and institutional - advertisers) in this particular type of speech. The most problematic issue was that of defining the prerogatives of such bodies, fields of its activity and executive means of action.

REGULATORY BODIES - DOMAINS OF ACTIVITY AND MEANS OF CONTROL

The basic regulatory body in the field is The Federal Trade Commission (FTC) established in 1914 as an independent agency to formulate and enforce antitrust policy. Its main aim is to pursue the cases of false, misleading and omissive advertising. Worth noticing is the fact that FTC is a very flexible body constantly adapting to the changing marketing and social environment. The crucial assumptions made to establish the ground for its operation relevant and valid at present focus around the following lines:

1. Consumer welfare became the central concern of the agency. The issue apparently obvious is of major importance in the policy of FTC since it marks the shift from protecting mainly advertisers from 'vigorous competition (...) [to] encouraging truthful advertising as a means of enhancing consumer welfare'. Interestingly enough the recognition of advertising as the source of information took place as late as by the end of the 60s.

2. Commercial speech has been recognized as the one deserving the limited protection under the First Amendment through the Supreme Court resolution in the 1976 Virginia Board of Pharmacy case. The unrestricted flow of information in the domain of marketing was assigned the equal importance as the same flow in political debate. Since it was considered " indispensable to the formulation of intelligent opinions as to how that system (free-market economy) ought to be regulated or altered. Therefore, even if the First Amendment were thought to be primarily an instrument to enlighten public decisionmaking in a democracy, we could not say that the free flow of information does not serve that goal.

3. The new definition of deception evolved which considerably diminished the scope of FTC consumer protection placing on him/her the duty of much greater responsibility and conscious and knowledgeable acting. According to the FTC Act of 1983 deception takes place when:

* There is a misrepresentation, omission or practice that is likely to mislead - so far the tendency or capacity to mislead was sufficient for identifying deception;

* The consumer is acting responsibly (or reasonably) in the circumstances - here the change is twofold. Firstly, FTC abandoned the duty of protection all customers, even those most gullible as it was practiced still in the 1960s under the 'fools test' and secondly it paid more attention to the quality not the quantity of deceived customers.

* The practice is material and consumer injury is possible because consumers are likely to have chosen differently if there was no deception. This formulation introduces the notion of 'material untruth' being the power to affect the purchase decisions detrimental to the customers. If the existence of such tendency in an ad can be identified then it is labeled as 'public injury' and considered actionable. Interestingly enough, there are cases in which the input is not false but rather the perceptual process performed results in the impression that is deceptive. Such cases, due to their insubstantiality and immateriality are much harder to decide.

The above legislative typology of the advertising field shows that the attitude taken toward the commercial speech is clearly one of partial regulation but definitely not restriction. The accepted platform enhances all the lawful and legal activities not infringing them but guards and prevents those which are generally not acceptable in any public field such as cheating, misrepresentation, omission.

There are however two instances when restrictions are applied. The restrictions coming from outside the purely legislative understanding of the matter. The first one refers to a group of certain products which are recognized as particularly influencing the life of people referring to and exploiting different levels of consciousness than simple reasoning. The group of products advertising of which is under the special monitoring from the FTC includes:

* alcohol and tobacco advertising,

* health claims in food ads,

* advertising to children,

* environmental claims and

* advertising to the elderly concerning health, safety and financial security.

Even though it may appear unjust since all of the products advertised in these categories are legal, the argumentation behind assumes the greater susceptibility of customers since the product and service advertising within the group touches their basic insecurities concerning life and health and additionally speaks from the position of authority hardly verifiable by an average addressee. The importance of the issue may be best illustrated through the fact that the activity of the FTC in the field is supported by the operation of other agencies, such as: The Bureau for Alcohol, Tobacco and Firearms, Food and Drug Administration, Security and Exchange Commission.

The other set of restrictions has to do with the issues of ethical standards and good taste, the right to which citizens are entitled. Advertising industry is obliged to respect values and standards of the community it operates in and keep up national interests and participate in the process of development of national identity.

In exercising their authority in cases of law breaking by advertisers the FTC has a variety of means of action:

1. Cease - and - desist - involving stopping the running of the deceptive ad. It has been considered an ineffective remedy to the long time of introduction by which the deceptive message already managed to be sent across to customers;

2. Restitution - consumer compensation for damage. This was has been also used very rarely because of its severity.

3. Affirmative disclosure - demanding from the advertiser introduction into the message the omitted information (e.g. concerning limitations or drawbacks of a product);

4. Corrective advertising - putting the obligation on the advertiser to verify the deceptive statement in future commercial. The company must admit the deception or misleading statement and correct it in the future ad. Unfortunately, this way of dealing with deception usually gets a very small day-after recall (5%), while following tracking studies are very costly and their effectiveness is hard to assessed with reference to time span.

5. Competitor lawsuit - the Lanham Trademark Act of 1946 with its further improvement including comparative ads encourages the companies to file suits for damages and disparaging by competitors.

This is the view of the legal position, guidelines and tools of the main regulatory body in the field of advertising on the national level. To complete the picture one should turn to the other party involved directly in the settlement of the issue namely advertisers and their executive bodies - advertising agencies. It is interesting to trace whether there is the interaction and compliance with the federal laws and what practical forms this cooperation assumes.

ATTITUDE AND ACTION OF ADVERTISERS AND THEIR ADVERTISING AGENCIES WITHIN THE BOUNDARIES OF LAWS

The activity of the advertisers goes generally along the two lines. The first one assumes creating own regulatory bodies and formulating the self-regulation codes which would be the first watchdogs preventing and combating deceptive advertising by national advertisers and would serve as an efficient and flexible alternative to FTC. The bodies include: American Association of Advertising Agencies, American Advertising Federation and Association of National Advertisers. These three major organizations set up in 1971 the National Advertising Division (NAD) operating as the arm of the Council of Better Business Bureaus (CBBB). The body takes and resolves the complaints but more importantly it creates the forum for discussion over the advertising standards and illuminates the cases of deceptions. Such policy is in the deepest interest of advertisers since it fosters the image of reliability of the industry, builds the professional ethics automatically preventing advertisers from any outrageous, illegal acting which could effect in restrictive regulations toward the whole business. Besides in the highly competitive marketing environment misleading and deceiving practices are not beneficial for advertisers themselves since they constitute only short-term policy which would lead to the elimination from the market.

The important issue which touches upon the problem not discussed in this paper and negatively influences the 'fair-players' of the game is the multiple standards and multiple interpretations imposed by numerous regulators. In addition to federal regulations advertisers running their campaigns must also comply with the laws of separate states which often turn out to be more restrictive, conservative or outdated, not following the principles of FTC. Since adjustment of ads to different local markets across the country is too costly and technically unrealizable advertisers are left with the alternative of either skipping the market or choosing the lowest common denominator (the most restrictive) to tailor their ads according to it. This negatively affects the consumers since it deprives them of valuable information through restricting the content of the message. At the same time it prevents advertisers from enjoying the federal protections, since practically conservative and outdated state laws take precedence over the federal ones. Thus, there is a great need for unification of standards between the federal and state level so that honest, and lawfully acting advertisers would not have to resort to curtailing the messages beneficial for customers or find the ways of avoiding the laws.

Actually, the technique of avoiding the laws (not breaking them) is the other way undertaken by advertisers. The phenomenon observed widely in the world of advertising is a shift from informative to lifestyle ads. The reason behind this practice is avoiding the challenge and accountability through making claims which cannot be substantiated, which are neither true nor false. "'Imaginary' lifestyle depictions do not violate truth and honesty claims". The character of deception, now much harder to define, moved from the realm of verbalization to the sphere of imagerial implications and interpretations inferred by the complex imagery and language. Inferring from the above the lack of unification of the regulatory system of advertising creates a vicious circle to the operation of the industry. Too restrictive laws make advertisers seek more and more sophisticated ways to avoid them which, in turn, compels regulatory bodies to devise new laws to keep control over them and maintain the benefit and high standards of the community they operate in.

CONCLUSIONS

Concluding the discussion about the issue of advertising regulation in the light of the Free Speech Amendment it must be stressed that the debate taking place on all the levels of political, social, economic and cultural life is still open and evolving. It looks like a constant trade-off between freedom and regulation based on the input from studies both of the advertising industry and customer attitudes.

Recognition of the unquestionable importance of commercial speech as a source of information in free-market economy and simultaneously admitting its close ties with politics and consequently, input into the development of democracy led to assigning it a partial protection under the Constitution. However, awareness of the power and intrusiveness of the media demanded creation of certain regulatory bodies which function historically evolved from restrictive to more coordinative and monitoring.

Yet, the paradoxical disparity between the federal and state regulations seems to trap advertisers and deny them their rights granted on the federal level. The two approaches they have at hand namely, acceptance of the lowest common denominator (most restrictive rules) or avoiding regulations through escape into imagery advertising do not solve the problem. Actually, in both cases consumer is the one who suffers mostly being deprived of the substantial information about products and services. In such context the main aim of consumer protection set for FTC seems to be missed.

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