Deceptive Cosmetic Advertising: Effects and FTC Regulation

Introduction

Cosmetics are among the largest expenditures for consumers, especially women, with the revenue generated by the industry surpassing $7 billion every financial year. Cosmetic advertising provides women with product information, and there is a greater likelihood of women purchasing products after seeing an advertisement. In particular, cosmetic companies may make women feel insecure and then offer their products as a solution. Cosmetics retailers design and relay advertising with the primary intention of changing consumer attitudes, perceptions, and purchasing behavior, prompting them to buy more products (Thompson, 2018). On a daily basis, consumers are exposed to numerous advertising messages. The fundamental objective of advertising is to attract consumers by providing information about products, how those products should be used, and guidance on how to purchase them. It is essential to ensure that consumers perceive advertising as positive and constructive. However, in recent times, one of the key areas of concern is how deceptive advertising affects cosmetic advertising and the role that cosmetic advertising regulation can play in limiting the adverse effects of misleading and deceitful advertisement practices.

Deceptive Effects of Cosmetic Advertising

Deceptive advertising is formally defined by the Federal Trade Commission (FTC) as a representation, omission, or practice that is likely to mislead the consumer. Practices established as being deceitful and deceptive include verbal and written misrepresentations, fraudulent product price claims, the sale of defective products or services, and the failure to disclose proper and pertinent information (Newaz, 2017).

Research conducted by Fowler, Reisenwitz, and Carlson (2015) has shown that deceptive claims in cosmetic advertisements lead consumers to make inaccurate decisions. Over time, such practices may cause consumers to become cautious and cynical of advertising claims. For example, inadequate comparisons that suggest a product is of superior quality but fail to provide a proper point of reference are worthless to consumers. Furthermore, deceptive advertising claims may transform consumers into pessimists who become hesitant and disbelieving of advertisers, the media, and institutions in all their forms. Such claims can also be considered irritating, aggressive, and disrespectful to consumer intelligence (Fowler et al., 2015).

The article by Fowler et al. (2015) sets out to determine the extent to which cosmetic claims contain deceptive content within fashion advertisements. According to the authors, most claims could be explained by three categories: subjective, scientific, and performance claims. The results showed that a greater number of cosmetic claims were classified as more deceptive than acceptable. A broader examination of these trends indicated that most superiority claims were categorized as false, and that scientific claims tended to be clustered as ambiguous or as omitting important information. Performance claims were also likely to be perceived as ambiguous, while endorsement claims were generally considered acceptable.

According to Knapton (2015), research established that only 1 in 5 cosmetic advertisements can withstand scrutiny, with companies criticized for their vague science and fabricated or deceptive claims of superiority over competitors. Approximately 25 percent of claims in the market were found to be outright lies. Deception not only undermines the credibility of advertising as a whole by making consumers defensive, but it also generates damaging effects for the advertisers who are directly responsible for making such claims. Research makes it clear that marketers have a strong self-interest in maintaining truthfulness in cosmetics advertising.

Economic and Social Harms of Deceptive Advertising

Deceptive advertising in cosmetics can misinform and mislead consumers by prompting them to spend more money on a product or service, and by exposing them to the risk of harm through false claims regarding health or safety. These unethical practices cause harm in several ways. Beyond consumer wariness, deceptive advertising causes economic instability, degrades social values, and poses a threat to human health. In recent years, there has been a trend toward introducing female consumers to cosmetic products claiming to reduce weight or burn body fat. Such advertisements largely make unsubstantiated claims that consuming certain products can improve health and even reduce the risk of serious illness. A great many cosmetic creams sold in the market have been found to contain compounds such as steroids, resulting in significantly harmful effects on the consumer (Newaz, 2017).

Deceptive advertising can also harm competitors and the broader market by creating long-term losses in both product reputation and revenue. Such products are generally ineffective and carry potentially severe side effects. According to Newaz (2017), deceptive advertising of cosmetic products encourages women to spend more money on these products, diminishing their financial savings and, directly or indirectly, reducing the budget available for basic needs — to the detriment of their financial goals. Furthermore, it fosters compulsive buying behavior toward cosmetic products.

Another effect of deceptive cosmetic advertising is the degradation of social values. As Newaz (2017) notes, the social preference for lighter skin tones — and the discrimination, racism, and humiliation associated with darker skin — has become deeply embedded in many societies. Consequently, young women today frantically invest in cosmetic products such as whitening creams without considering the adverse effects. Manufacturing companies capitalize on the psychological vulnerabilities of such consumers by luring them with striking advertisements that frequently contain false information. These advertisements are crafted in such appealing ways that consumers fall prey to them. The use of celebrities in such advertisements, or the promotion of a particular skin color as the ideal, substantially shapes social perspectives because people come to view these representations as the norm. For instance, a woman with dark skin who faces racism and taunting because of her complexion may go to great lengths to change her appearance, even at the cost of her health, because she perceives herself as different from the norm (Newaz, 2017).

Role of Cosmetic Advertising Regulation

The relationship between advertising and free markets is substantial, multi-layered, and complex. On one hand, some argue that the regulation of advertising is incompatible with the concept of a free market. On the other hand, it can be argued that one of the key features of a market economy is the free flow of information about products and services offered to consumers. The underlying theory is that the more informed consumers are, the better equipped they will be to make purchasing decisions suited to their individual needs. The appropriateness of a purchasing decision in a free-market economy depends on consumer preference (Azcuenaga, 1997).

Regulation in advertising is pivotal. Its purpose is to reduce the frequency of deceptive claims in advertisements. Most of the time, advertising improves market performance by providing beneficial information to consumers and by enabling companies to promote the characteristics of their products and services, thereby competing more effectively with one another. In contrast, advertising can negatively affect market performance when businesses use it to convey false or fraudulent information upon which reasonable consumers rely, to their detriment. Regulation therefore plays a key role in ensuring that market failure does not occur. Even in well-functioning market economies, occasional failures may arise that require remedial regulatory action. Deception or fraud can produce imperfect information in the market that undermines consumers' ability to make sound purchasing decisions. For remedial measures to succeed in restoring market forces, they must focus as closely as possible on eliminating the causes of market failure (Azcuenaga, 1997).

Advertising that harms the market through the dissemination of false claims may prompt consumers to buy products and services they would not have chosen had they not been misled. When this occurs, it is imperative for the government to intervene and restore the integrity of the marketplace. The Federal Trade Commission (FTC) is the principal federal consumer protection body. It has primary jurisdiction over how cosmetics are labeled, including the authority to take enforcement action against advertising claims that are false, unsubstantiated, or otherwise misleading. The FTC Act prohibits unfair or deceptive advertising in any medium — advertising must present the facts and must not mislead consumers. A claim can be deceptive if relevant information is omitted or if the claim implies something that is untrue (Dayan and Kromidas, 2011).

Conclusion

In recent times, there have been major concerns regarding the effects that false and deceitful advertising has on consumers. Cosmetic advertising provides women with product information, and there is a greater likelihood of women purchasing products after seeing an advertisement. In particular, cosmetic companies may make women feel insecure and then offer their products as a solution. As a result, deceptive advertising may adversely affect consumers, who end up purchasing products for the wrong reasons. In addition, deceptive advertising gives female consumers a distorted perception of beauty. In an effort to secure their social status, many women go to extreme lengths to purchase such products, seeking to conform to what society considers beautiful.

According to research, approximately 25 percent of all cosmetic product advertisements contain outright falsehoods. Deception not only undermines the credibility of advertising as a whole by making consumers defensive, but also generates adverse consequences for the advertisers directly responsible for making such claims. Taking this into consideration, regulation plays a pivotal role in ensuring that deceptive claims are curtailed. Advertisements are intended to help consumers make purchasing decisions, and the information provided should be truthful and not misleading. Agencies such as the FTC play a central role in setting the policies and guidelines to be followed, as well as the penalties that companies should face when found engaging in false advertising of cosmetic products.

References

Azcuenaga, M. L. (1997). The Role of Advertising and Advertising Regulation in the Free Market. US FTC.

Dayan, N., & Kromidas, L. (Eds.). (2011). Formulating, packaging, and marketing of natural cosmetic products. John Wiley & Sons.

Fowler, J. G., Reisenwitz, T. H., & Carlson, L. (2015). Deception in cosmetics advertising: Examining cosmetics advertising claims in fashion magazine ads. Journal of Global Fashion Marketing, 6(3), 194–206.

Knapton, S. (2015). Four in five beauty claims cannot be substantiated. The Telegraph.

Newaz, N. (2017). The impacts of deceptive advertising on women consumers. European Scientific Journal, ESJ, 13(35).

Thompson, V. (2018). Influence of advertisement on women and the attitude toward cosmetics. Chron.