Commercial Speech and the 1st Amendment
There is only a limited right to undertake commercial speech. Such expressions necessarily involve third parties who take actions based upon that speech. The government’s regulation of commercial speech is based upon the potentially negative effect on the general welfare of society. The limitation upon the regulation of commercial speech is that the government must have a compelling state interest to justify the restriction.
⁃ Note: Common law holds that corporations have limited rights to free speech that are very similar to those of individuals. The Constitutional standards applied by a court when determining the validity of government laws or actions limiting an individual’s rights are discussed in a separate section.
⁃ Example: Business practices that knowingly deceive individuals may constitute fraud. Many deceptive advertising practices violate consumer protection laws. The federal and state governments require disclosure of material information about publicly-held companies. All of these examples demonstrate a balance between protecting the public and protecting the freedom of speech afforded individuals.
⁃ Discussion: Can you think of any type of commercial speech that is prohibited by federal, state, and local laws? What is the risk to the public of allowing this type of unregulated speech?
⁃ Practice Question: Hickory, NC is famous for its production of fine, wood furniture. Every year, thousands of people and stores come to Hickory to purchase furniture. Numerous companies that produce their furniture in other places have opened shops in Hickory to sell to customers. These companies routinely assemble the pieces of furniture in Hickory and advertise the furniture as “Made in Hickory”. The town passes an ordinance prohibiting this practice. If a merchant challenges the ordinance, what will the court examine in determining whether the ordinance is constitutionally valid.