By Karen Morris
The latest ads by tobacco companies will leave marketing students scratching their heads. Rather than extol the virtues of the product, the ads proclaims its dangers. No, the companies have not lost their minds. But they did lose a lawsuit.
In 1999, the US Justice Department sued the country’s largest cigarette manufacturers and tobacco trade organizations asserting claims of fraud and racketeering (engaging in ongoing, illegal business activities). The defendants include Phillip Morris USA, Lorrillard, R.J. Reynolds Tobacco Co., and Altria Group.
The charges were based on the Racketeer Influenced and Corrupt Organizations Act (RICO), a federal law adopted in 1970 that imposes both civil and criminal penalties for racketeering activities relating to an enterprise, which is an association of individuals or corporations. Penalties are steep and include up to 20 years in prison plus forfeiture of all ill-gotten gains.
In 2006, the tobacco companies were found guilty of racketeering. Judge Gladys Kessler of the US District Court for Washington DC determined the companies had deceived the public for decades about the dangers of their product. The judge’s ruling harshly criticized the tobacco industry for lying about its products beginning in the 1950’s. The decision stated the companies had worked to make profits “with little, if any, regard for individual illness and suffering, or soaring health costs. . . “.
The sentence imposed by the judge mandated stronger warning labels, and also corrective ads(Advertisements that a business is ordered to run when it has knowingly falsified information; the ads are intended to correct inaccurate impressions that previous ads gave) detailing the health risks and addictive nature of smoking. The ads, which began last week, address the health effects of smoking, the addictiveness of cigarettes, the dangers of secondhand smoke, and of even low-tar cigarettes, and more. Among the ads content will be:
“Smoking kills, on average, 1,200 Americans. Every day.”
“Cigarette companies intentionally designed cigarettes with enough nicotine to create and sustain addiction,"
“Manipulation of cigarette design and composition occurred to ensure optimum nicotine delivery.”
“Secondhand smoke causes lung cancer and coronary heart disease in adults who do not smoke.”
Due to resistance by the tobacco companies, ten years of litigation followed. Issues included the wording, of the ad when they would be published, the font sizes, where they would be placed, and more.
The warnings are being placed in prime-time TV commercials, and full-page ads in national newspapers.
A spokesperson for R.J. Reynolds, one of the defendants, said, “We are working to address and resolve many of the controversial issues relating to the use of tobacco.”
The American Cancer Society vice president for tobacco control said, “Now [the tobacco companies] will have to tell the truth, the whole truth and nothing but the truth to the world.”
Other organizations supporting the outcome include, not surprisingly, the American Heart Association, American Lung Association, Tobacco-Free Kids Action Fund, and the National African American Tobacco Prevention Network.
About one in five US adults uses some form of tobacco, mostly cigarettes, per the Centers for Disease Control and Prevention. Cigarette smoking causes more deaths each year in the US than HIV, illegal drug use, alcohol use, motor vehicle injuries and firearm-related incidents combined.
The locations of the ads were chosen to mimic the places that defendants “historically used to promulgate false smoking and health messages.”
Full-page ads will run online and in the Sunday issues of more than 40 newspapers, including the NY Times, on five separate days. There are also five versions of TV ads that will run on the three major networks for a year.
For more information, click here.
Is it fair that the government can mandate that a company spend a lot of money to correct wrong impressions created by prior ads? Why or why not?
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