In North Carolina, newspapers, periodicals, broadcast stations and other media outlets that publish or disseminate advertisements to the public generally cannot be held liable under the state Unfair and Deceptive Trade Practices Act (UDTPA) for publishing or disseminating false, misleading or deceptive advertisements. However, the exemption does not apply when an “owner, agent or employee” of the media outlet had knowledge of the “false, misleading or deceptive character of the advertisement” but published it anyway. In addition, the exemption does not apply when the media outlet has a “direct financial interest in the sale or distribution of the . . . product or service” that was advertised in a false, misleading or deceptive manner. Anyone claiming exemption from liability under the UDPTA has the burden of proving that the exemption applies under the circumstances.
Unlike many other states, North Carolina does not have a state trade commission that regulates false, misleading and deceptive advertising.. Although the Federal Trade Commission (FTC) has jurisdiction to regulate much of the advertising that is published and disseminated in North Carolina, the agency focuses primarily on national and regional advertising. Although FTC regulation of advertising is beyond the scope of this chapter, it is important to note that there is no specific media exemption from federal liability for unfair or deceptive acts or practices regulated by the FTC, which include dissemination of deceptive or unfair advertising. The FTC defines “deception” in advertising as any “representation, omission or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer’s detriment,” and describes “unfairness” as an act or practice that causes – or is likely to cause – substantial consumer injury that cannot be reasonably avoided by consumers and is not outweighed by countervailing benefits to consumers or competition. A good resource for information and documents regarding FTC regulation of advertising and marketing by the agency’s Division of Advertising Practices (DAP) within the Bureau of Consumer Protection (BCP), visit Advertising and Marketing on the FTC website. The FTC also has provides a list of advertising screening tips for media on its website.
In one particular advertising category – weight loss advertising – the FTC has published guidelines for media outlets and listed specific “red flag” claims for products like non-prescription drugs, dietary supplements, skin patches, creams, wraps and jewelry. The FTC has A Reference Guide for Media on Bogus Weight Loss Claim Detection available online on its website. Advertising managers for media outlets that publish weight loss advertising should consult this guide carefully.
 N.C. Gen. Stat. § 75-1.1(c).
 Id. at (d).
 For an excellent general overview of this topic published in 2010, see generally Anne V. Maher & Lesley Fair, The FTC’s Regulation of Advertising, 65 Food & Drug L.J. 589 (2010).
 Section 5 of the FTC Act prohibits “unfair or deceptive acts or practices in or affecting commerce” and empowers the FTC to enforce this prohibition against all “persons, partnerships, or corporations” except for certain entities like banks, savings and loans, federal credit unions and airlines. 15 U.S.C. § 45(a)(1)-(2). In addition, Section 12 of the FTC Act specifically makes it unlawful to “disseminate, or cause to be disseminated” false advertising for “food, drugs, devices, services, or cosmetics” and incorporates by reference this type of false advertising as an “unfair or deceptive act or practice affecting commerce” under Section 5 of the act. 15 U.S.C. §52(a)-(b). In a 1971 memorandum of understanding between the FTC and the Food and Drug Administration (FDA), the FDA has primary responsibility for regulating prescription drug advertising (and labeling) while the FTC has primary responsibility for advertising for foods, over-the-counter drugs, devices and cosmetics (while the FDA has primary authority for labeling for these products). Memorandum of Understanding Between Federal Trade Commission and the Food and Drug Administration, 36 Fed. Reg. 18,539 (Sept. 9, 1971) (hereinafter 1971 Memorandum of Understanding).
 FTC Policy Statement on Unfairness (Dec. 17, 1980), appended to Int’l Harvester Co., 104 F.T.C. 949, 1070 (1984), available at http://www.ftc.gov/bcp/policystmt/ad-unfair.htm. In 1994, Congress amended Section 5 of the FTC Act and included the definition of “unfairness” as an “act or practice [that] causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumer themselves and not outweighed by countervailing benefits to consumers or to competition.” Federal Trade Commission Act Amendments of 1994, Pub. L. No. 103-312, 108 Stat. 1691 (codified at 15 U.S.C. § 45(n)).
 http://www.business.ftc.gov/advertising-and-marketing (last visited June 23, 2012). For an overview of the FTC Division of Advertising Practices on the FTC website, visit Division of Advertising Practices, http://www.ftc.gov/bcp/bcpap.shtm (page last modified April 21, 2011).
 http://ftc.gov/bcp/edu/microsites/redflag/whatyoucando.html (scroll down to “All-Purpose Advertising Screening Tips”) (last visited June 25, 2012).
 http://www.ftc.gov/bcp/edu/microsites/redflag/index.html (last visited June 25, 2012).