Advertising and Sales Promotion

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What constitutes advertising – Advertising is “the business of conceptualizing, presenting or making available to the public, through any form of mass media, fact, data or information about the attributes, features, quality or availability of consumer products, services or credit.” [1] Advertisement is “the prepared and through any form of mass medium, subsequently applied, disseminated or circulated advertising matter.”[2] Advertising agency or agent is “a service organization or enterprise creating, conducting, producing, implementing or giving counsel on promotional campaigns or programs through any medium for and in behalf of any advertiser.”[3]

False, deceptive and misleading advertisement

What constitutes false, deceptive or misleading Advertisement – An advertisement is considered false, deceptive or misleading if it does not in conform with the provisions of the Consumer Act or if it is misleading in a material respect.”[4]

Same; Prohibited; Truth in Advertising Rule – It is unlawful for any person to disseminate or to cause the dissemination of any false, deceptive or misleading advertisement by Philippine mail or in commerce by print, radio, television, outdoor advertisement or other medium for the purpose of inducing or which is likely to induce directly or indirectly the purchase of consumer products or services.[5]

Same; Criteria – In determining whether any advertisement is false, deceptive or misleading, the following are to be taken into account, among other things: (a) the representations made or any combination thereof; (b) the extent to which the advertisement fails to reveal material facts in the light of such representations, or materials with respect to consequences which may result from the use or application of consumer products or services to which the advertisement relates under the conditions prescribed in said advertisement, or under such conditions as are customary or usual.[6]

Best Legal Practices

  • Advertising should comply with the Truth in Advertising Rule – When businesses engage in advertising, their representations should comply with the Truth in Advertising Rule. Consequently, the material facts which could have induced directly or indirectly the purchase of consumer products or services must not be false, deceptive, or misleading.

Price comparisons – Comparative price advertising by sellers of consumer products or services are to conform to the following conditions:

  • If the comparison relates to a former price of the seller, the item compared must either have been sold at that price within the 90 days immediately preceding the date of the advertisement, or it is to have been offered for sale for at least 4 weeks during such 90-day period. If the comparison does not relate to an item sold or offered for sale during the 90-day period, the date, time or seasonal period of such sale or offer are to be disclosed in the advertisement.[7]
  • If the comparison relates to a seller’s future price, the latter is to take effect on the date disclosed in the advertisement or within 90 days after the price comparison is stated in the advertisement.[8] The stated future price is to be maintained by the seller for a period of at least four weeks after its effective date;[9]
  • If the comparison relates to a competitor’s price, the competitor’s price must relate to the consumer products or services advertised or sold in the 90-day period and are to be representative of the prices similar to the consumer products or services that are sold or advertised in the locality where the price comparison was made.[10]

Special advertising requirements for food, drug, cosmetic, device, or hazardous substances – The following are the special advertising requirements for food, drug, cosmetic, device, or hazardous substances:

  • No claim in the advertisement may be made which is not contained in the label or approved by the concerned department.[11]
  • No person is to advertise any food, drug, cosmetics, device, or hazardous substance in manner that is false, misleading or deceptive or is likely to create an erroneous impression regarding its character, value, quantity, composition, merit, or safety.[12]
  • If a standard has been prescribed for a food, drug, cosmetic, or device, no person is to advertise any article or substance in such a manner that it is likely to be mistaken for such product, unless the article complies with the prescribed standard or regulation.[13]
  • No person is to make use of any reference to any laboratory report of analysis required to be furnished to the concerned department, unless such laboratory report is duly approved by such department.[14]
  • Any businessman who is doubtful as to whether his advertisement relative to food, drug, cosmetic, device, or hazardous substance will violate or does not conform with the law or the concerned department’s pertinent rules and regulations may apply for consideration and opinion on such matter before such advertisement is disseminated to the public.[15]
  • No person is to advertise any food, drug, cosmetic, device, or hazardous substance unless such product is duly registered and approved by the concerned department for use in any advertisement.[16]

People v. Estrada
G.R. No. 124461, 25 September 1998

Private complainant BFAD applied for a search warrant against defendant Aiden Lanuza on the ground that the latter were selling drug products without DOH license. After the search warrant was executed and the items seized, defendant moved for the quashal of the warrants and that the evidence be inadmissible primarily on the ground that that they were void.

HELD: Search warrants were void. It must be noted that “to establish the existence of probable cause sufficient to justify the issuance of a search warrant, the applicant must show facts and circumstances which would lead a reasonably discreet and prudent man to believe that an offense has been committed and that the objects sought in connection with the offense are in the place sought to be searched.”

Here, “the best evidence procurable under the circumstances to prove that private respondent Aiden Lanuza had no license to sell drugs is the certification to that effect from the Department of Health.  SPO4 Manuel could have easily procured such certification when he went to the BFAD to verify from the registry of licensed persons or entity.  No justifiable reason was introduced why such certification could not be secured.   Mere allegation as to the non-existence of a license by private respondent is not sufficient to establish probable cause for a search warrant.”

Credit advertising – No advertisement to aid, promote, or assist, directly or indirectly, any extension of consumer credit may state that: (a) a specific periodic consumer credit amount or installment amount can be arranged, unless the creditor usually and customarily arranges credit payment or installments for that period and in that amount; and (b) a specified down payment is required in any extension of consumer credit, unless the creditor usually or customarily arranges down payment in that amount.[17]

Advertising of open-end credit plan – In case of an open-end credit plan, the rate of interest and other material features of the plan are to be disclosed in the advertisement.[18]

Special claims – Any advertisement which makes special claims are to: (a) substantiate such claims; and (b) properly use research result, scientific terms, statistics or quotations.[19]

Promotion of sales of consumer products and services

Permit to conduct promotion – No person is to conduct any sales campaigns, including beauty contest, national in character, sponsored and promoted by manufacturing enterprises without first securing a permit from the concerned department at least 30 calendar days prior to the commencement thereof. Unless an objection or denial is received within 15 days from filing of the application, the same is deemed approved and the promotion campaign or activity may be conducted. [20] Any sales promotion campaign using medical prescriptions or any part thereof or attachment thereto for raffles or a promise of reward are not allowed, nor a permit be issued thereof.[21]

Best Legal Practices

  • Obtain permits for sales promotion – To avoid being exposed to liabilities and penalties, businesses should obtain permits to conduct promotional activities from DTI.

Suspension of publication or dissemination of information – The concerned department may, after due notice and hearing, suspend the publication and dissemination of any information accompanying a sales promotion campaign, if it finds the campaign to be in violation of the Consumer Act or its implementing rules and regulations.[22]

Conduct of sales promotion – A sales promotion which is intended for broad consumer participation and utilizes mass media is required to indicate the duration, commencement and termination of the promotion, the deadline for submission of entries and the governing criteria or procedure to be followed therein.[23]

Packaging of products under promotion – The packaging of the products covered by the sales promotion is not to be tampered, neither is any change in the product’s package be affected without the authority of either: the sponsoring agency, or the owner, or manufacturer of the product.[24]

Change in starting and termination dates of promotion – The concerned department is to be advised of any delay of starting dates or termination dates and details of any change in the conduct of a sales promotion.[25] Any change in the termination dates are to be published in a newspaper of general circulation before the expiration of the original schedule or the termination date, whichever comes first.[26]

Determination of winners – The winners in any sales promotion are to be determined at a definite time and place and to be verified by a representative of the concerned department and the sponsor.[27] Immediately after the winners are selected or determined, a list with their addresses and corresponding prizes are to be submitted to the concerned department.[28] All winners are to be announced or published in the same manner that the sales promotion was announced or published. [29] Publication in a newspaper of general circulation is to be done in a legible manner at least once, if the sales promotion is national in scope.[30] Such announcement and publication are to be done not later than two weeks after the determination of winners.[31] In all cases where the amount of the price is Php500.00 or more, the winners are also to be notified in writing by registered mail or any communication wherein proof of notice or service can be verified.[32]

Regulation of Repair and Service Firms

Minimum requirements for accreditation – The following are the minimum requirements for accreditation for repair and service firms: (a) the duly registered business name, firm name, or style of the firm; (b) date of issue and effectivity of the certificate of accreditation; (c) number and skills of technical personnel; and (d) required license for the repair or servicing of any consumer product as required by special laws.[33]

Accreditation of repair and service Firm – No person is to operate a repair and service firm or act as technical personnel therein without first being accredited by the DTI.[34]

[1] R.A. 7394 (Consumer Act of the Philippines), Article 4(b). The DTI enforces the provisions on advertising and sales promotion. As to food, drugs, cosmetics, devices and hazardous substances, the DOH enforces the same (Article 109, Ibid.).

[2] Ibid. Article 4(a).

[3] Ibid. Article 4(c).

[4] Ibid. Paragraph 2, Article 110.

[5] Ibid. Paragraph 1, Article 110.

[6] Id at 141.

[7] R.A. 7394, Article 111 (a).

[8] Ibid. Article 111 (b).

[9] Ibid. Article 111 (b). Notwithstanding, compliance thereof may be dispensed with in case of circumstances beyond the seller’s control (Ibid.).

[10] Ibid. Article 111 (c).

[11] Ibid. Article 112 (a).

[12] Ibid. Article 112 (b).

[13] Ibid. Article 112 (c).

[14] Ibid. Article 112 (d).

[15] Ibid. Article 112 (e). In this case, the concerned department shall give its opinion and notify the applicant of its action within 30 days from the date of application; otherwise, the application shall be deemed approved (Ibid.).

[16] Ibid. Article 112 (f).

[17] Ibid. Article 113.

[18] Ibid. Article 114.

[19] Ibid. Article 115.

[20] Ibid. Article 116.

[21] Ibid.

[22] R.A. 7394, Article 117.

[23] Ibid. Article 118.

[24] Ibid. Article 119.

[25] Ibid. Article 120.

[26] Ibid.

[27] R.A. 7394, Article 121.

[28] Ibid.

[29] Ibid.

[30] Ibid.

[31] Ibid.

[32] Ibid.

[33] R.A. 7394, Article 127.

[34] Ibid. Article 128.

©2020 BUSINESSLAW.PH. All rights reserved. Statements and opinions of the author are of his own, and does not reflect any organization he may be connected or affiliated. All information herein are for educational and general information only. The content should not be considered as a legal advice or opinion. Please consult a lawyer to address your specific concerns.
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