Statement of Principles on Commercial Speech

Summary

The Statement enumerates tenets to protect commercial free speech, recognizing that these speech freedoms contribute to a robust marketplace of ideas and innovations that improve people’s lives.

Statement of Principles on Commercial Speech

ALEC recognizes that commercial speech promotes an open society by eliminating arbitrary burdens on speech and is essential for the free flow of information among consumers and private enterprise in a crowded marketplace of ideas. Speech is also among the most important functions of an entrepreneur. Many of these entrepreneurs, such as tour guides, make a living from speaking. Though the definition of commercial speech has evolved over time, the courts have determined that a “communication that does no more than propose a commercial transaction is entitled to the coverage of the First Amendment.[1]  Consumers benefit from receiving varied information to make informed purchasing decisions while businesses benefit from the freedom to convey truthful information about their product or service and distinguish themselves in a competitive market. Speech in a commercial context includes providing advice or information services, marketing, contributions to associations and charitable organizations, scientific research and discovery, product labeling, advertisement disclaimers, and many other forms of communication. When speech about products and services is restricted or compelled, consumers’ cost to access information increases.[2] Likewise, when expert speech is unnecessarily restricted, consumer choices may fall and prices may rise. The ability to speak freely contributes to a robust marketplace of ideas and innovations that improve people’s lives.

To advance the ALEC principles of limited government and free markets; and to promote innovation, scientific discovery, and protect the First Amendment rights of both consumers and commercial speakers, legislation and regulations must not infringe on constitutionally-protected commercial speech rights.

  1. Although the level of protection granted to date by the courts is less than that for political speech, the First Amendment constrains the government’s ability to restrict commercial speech on lawful activity that is not misleading. State and local lawmakers should ensure that commercial expression receives the same constitutional protections as other First Amendment rights.

  2. The right to speak freely should not be diminished when speaking for economic gains or on behalf of private enterprise. Businesses must be free to communicate truthful information about their product or service.
  1. Policymakers should not advantage some commercial actors over others; rather, the consumers should determine which enterprises succeed. It is imperative to empower consumers by protecting their right to receive information, including scientific and commercial data, and the rights of businesses to engage in the free exchange of such information.
  2. Governments should rely on market forces to self-regulate industries when possible.

  3. Advertising regulations should be equitable and narrowly tailored to advance a substantial governmental interest. Ordinances should not discriminate based on the business or the content of the advertisement without a compelling state interest.

  4. Governments do not have free reign in declaring commercial speech deceptive or misleading, especially when enacting necessarily generalized legislation or regulations.

  5. Compelled disclosures should be carefully designed to avoid infringing on commercial speech rights. Government mandates on private business to convey special (and often misleading) information about a product or service can unduly compel speakers to engage in speech contrary to their commercial interests. When government does compel speech through product labels and other means, the compelled speech should be confined to a clearly defined compelling governmental interest and must be grounded in sound science.
  6. In recent years, the U.S. Supreme Court has strengthened commercial speech protections by clarifying that restrictions on the content of speech must satisfy “heightened” scrutiny. Therefore, laws and regulations should be tailored accordingly to avoid burdening commercial speech and violating constitutional rights.

[1] See Virginia State Bd. of Pharmacy, supra, at 762., Edenfield v. Fane, 507 U.S. 761, 113 S. Ct. 1792 (1993)

[2] Stigler, George J. “The economics of information.” Journal of political economy 69.3 (1961): 213-225.