Federal Trade Commission Chairman James C. Miller pledged yesterday to prosecute companies that are guilty of "fraudulent and deceptive" advertising practices, but he said the agency should carefully examine the amount of substantiation required for ad claims.
In a speech to the Association of National Advertisers in San Francisco, Miller said his remarks were designed to clarify the "confusion" that exists over his views on advertising.
His widely quoted remarks at a press conference two weeks ago have raised concern among consumer groups and advertising representatives that he was signaling clear changes in commission direction on advertising issues.
Noting that any effort to change FTC policy must be made by a majority of its five commissioners, Miller said that although he is "troubled" about the FTC's 11-year-old substantiation program, he has not drawn "strong conclusions."
"I have no problem with the concept that an advertiser be required to substantiate a claim, especially in the face of indications that a claim is false or deceptive," Miller said. He did say, however, that the FTC "may not have made sufficiently clear which claims need to be substantiated."
Miller said there is uncertainty about the meaning of claims, a problem that "could lead to restrictions on useful information." Finally, Miller said he is concerned about the "quantum of substantiation required" by the FTC.
"For these reasons, I would like to consider whether there should be lower standards of evidence for reasonable basis than for claims once they have been challenged," he said.
In another development, confirmation hearings for F. Keith Adkinson, a Washington lawyer nominated by President Reagan to fill a Democratic vacancy on the commission, were postponed at the request of Sen. Howard Cannon (D-Nev.), ranking minority member of the Senate Commerce Committee.
Cannon said that he could not attend the hearing, citing a scheduling difficulty and that he has "important questions" to ask Adkinson. The nomination has become controversial in part because Adkinson served as national director of Democrats for Reagan in the 1980 presidential campaign.