Dispute Resolution

A. Self-Regulation through the National Advertising Division
For over forty years, the U.S. advertising industry has maintained a
system of self-regulation for ensuring the truth and accuracy of
advertising. The main purposes of the system are to advance consumer
confidence and trust in advertising, to promote fair competition, and to
minimize unnecessary government involvement and law enforcement
activity. Voluntary industry-wide self-regulation provides a mechanism
for competitors to resolve legal disputes related to advertising without
resort to costly litigation.
The Advertising Self-Regulatory Council (ASRC) has established
policies and procedures for the advertising industry’s self-regulatory
programs, including the National Advertising Division (NAD)—an
independent self-regulatory body charged with the responsibility of
monitoring and evaluating truth and accuracy in national advertising
directed toward consumers ages twelve and older. NAD, led by a director
and staffed by eight attorneys, examines and evaluates a wide range of
advertising claims, including express claims and implied claims, puffery,
monadic (non-comparative claims) and comparative claims, superiority
claims, establishment (“clinically proven”) claims, product testing,
pricing claims, and disclosures. Published NAD decisions, which include
detailed findings and analysis, have covered a broad range of products
and services in all national media (television, print, radio, and internet
advertising) as well as advertising conducted through new media, such as
Twitter, YouTube, Facebook, and Pinterest.
1. How the NAD Process Works
The majority of the cases reviewed by NAD are initiated by
companies challenging the truth and accuracy of advertising claims made
by competitors in the marketplace. NAD review of advertising may also
be initiated by consumers, advocacy groups, local Better Business
Bureaus, or by NAD itself through its own monitoring program. There
are no issues of “standing” with NAD—anyone may bring a challenge.
NAD’s jurisdiction extends to national advertising in any medium
Advertising Claim Substantiation Handbook
whether directed to consumers, businesses or other service
The review process, though voluntary and informal, follows a
detailed set of procedures, available on NAD’s website.2 A party may
freely contact the NAD attorney assigned to its case with any procedural
or substantive questions. Under the procedures, there is no formal
discovery. Instead,, the parties to the proceeding develop the record by
each providing two rounds of letter submissions (including any
evidentiary exhibits that the submitting party deems relevant).
A challenge is initiated in the form of a letter enclosing or describing
the advertisement in question and setting forth why the challenger
believes it to be false or misleading.3 Evidentiary submissions are
confidential and not shared with the public.
Once NAD determines that it has jurisdiction, it will forward the
challenge letter to the advertiser and request a response that provides
substantiation for the challenged advertising claims.4 The advertiser’s
response must provide substantiation for the advertising claims at issue.
Any advertiser challenged in a NAD proceeding has the option to submit
data to NAD with a request that the data not be made available to the
challenging party on the ground that such material is confidential and/or
proprietary.5 Should an advertiser refuse to participate in the NAD
process (or refuse to comply with NAD’s recommendations following
1. According to NAD Procedures “national advertising” is: [A]ny paid
commercial message in any medium (including labeling), if it has the
purpose of inducing a sale or other commercial transaction or persuading
the audience of the value or usefulness of a company, product or service;
if it is disseminated nationally or to a substa ntial portion of the United
States, or is test market advertising prepared for national campaigns; and
if the content is controlled by the advertiser. The Adver. Indust. Process
of Voluntary Self-Regulation, ADVER. SELF-REGULATOR COUNCIL, § 1.1
(A) (Jan. 1, 2014), available at http://www.asrcreviews.org/asrc-
procedures/ [hereinafter Advertising Procedures].
2. Advertising Procedures, supra note 1.
3. Id. at § 2.2 (A).
4. Id. at § 2.2 (B).
5. In such a case, the advertiser must identify which materials are
confidential and/or proprietary, affirm that the material is not publicl y
available, and provide a comprehensive summary of the materials (to be
shared with the challe nging party) includi ng as much non-confidential
information as possible about the methodology employed and the results
obtained. Advertising Procedures, supra note 1, at § 2.4(D).

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