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Philosophy 162F Lecture 7 Notes Marketing and the Disclosure of Information A standard defense of the free market system is that it gives everyone what he or she wants. People freely take on the role or make the purchase that they want. Deceitful practice in the free market undermines this defense. Any lack of information on the part of one of the participants in the free market system may interfere with the effectiveness of the free market to deliver an outcome that is the most good for the most people. Does this mean that there can be no advertising in a free market system? Does this mean that every participant in a free market system must provide all the information about the transactions that he or she tries to make? Legal Decisions Irving A. Backman v. Polaroid Corporation In this retrial, the court states that neglecting to include specific amounts for losses and specific sales information is not enough to claim that the Polaroid Corporation mislead investors about the value of its stock. The state of affairs seems to be that, in the law involved, complete disclosure about the nature of business is not required when all potential investors receive the same information from the corporation. B. Sanfield, Inc. v. Finlay Fine Jewelry Corp. In this case, the court ruled that there was no need to address the issue of whether or not the business practices of Finlay Fine Jewelry Corp. met the legal definition of deceptive practice because there was not enough evidence that customers had been deceived. The legal criterion for judging a fair discount price in Indiana, at the time, were either The vendor sold a significant amount of the product at the claimed regular price or higher. The vendor sold the product at the claimed regular price or higher for a significant amount of time. If there is an understanding among consumers about a form of deception, then the practice is not really deception. (This is an interesting parallel to Kant's claims about lying.) Coca-Cola Company v. Tropicana Products, Inc. In this case, the court finds in favour of Coca-Cola against Tropicana's deceptive advertising. The criteria used to determine the harm from the deception were the position of the companies' products in the marketplace and the market research that had established the effect of the deception upon consumers. Robert L. Arrington, Advertising and Behavior Control Puffery: the practice by a seller of making exaggerated, highly fanciful or suggestive claims about a product or service. Defenses of Puffery Puffery provides allure that we enjoy when purchasing the associated product. The presence of advertising allows us to know that a product is of high quality. (Advertising poor quality products is counter-productive.) Braybrooke (and others) argument: Advertising does not simply provide information that people use to fulfil their desires. Advertising creates desires and limits the perception of viable options. Without the action of advertising, people would want different things. This claim requires that people have a core set of values/desires that they wish to address and that advertising confuses them as to the best means to address these core values/desires. In order to understand autonomy, one must understand a) autonomous desire, b) rational desire and choice, c) free choice, and d) control or manipulation. a) Autonomous Desire If we separate all culturally induced desires from those that are truly autonomous, then we go too far. Desires for art and music are culturally induced but need not be seen as non-autonomous. If all culturally influenced desires are autonomous, then so too those desires influenced by advertising are autonomous. There may be second-order desires that we have that judge our (potential) first-order desires. Second-order desires are desires that are more central to our character. These desires adjudicate whether or not a desire for a specific object is something that we value. However, we may be happy, on a second-order level, with those desires that we receive from outside influences. If there were different advertisements, we would want something different. Yet this is hardly different from saying that if we lived in world without harsh weather, we wouldn't want roofs. b) Rational Desire and Choice Advertising may be improper if it leads people to make decisions that are irrational. To make this claim, we must have some idea of what it is to make a rational decision. It is too much to ask that people make a decision based on all the facts, because all the facts are never available. If we ask about available knowledge, then we still should restrict the scope of knowledge to the available knowledge that is relevant to our desires. Advertising plays on our desires and gives us information that is relevant to them. As long as it does this, it is not interfering with our rational desire. c) Free Choice Advertising may be improper if it produces a desire that one cannot resist. Yet it is hard to make a case that this happens all the time. For any given product, there are people who purchase the product even though they have good reasons not to purchase it and there are people who don't purchase the product for the same reasons. d) Control or Manipulation A person C controls the behaviour of another person P iff C intends P to act in a certain way A; C's intention causally effective in bringing about A; and C intends to ensure that all of the necessary conditions of A are satisfied. An advertiser may intend that a segment of the population buy a product, but that seems a statistical intention rather than one aimed at an agent. An advertiser may only hope that a segment of the population buys a product, which is not really consistent with taking all the necessary steps to ensure that the product is purchased by specific individuals. John Douglas Bishop, Is Self-Identity Image Advertising Ethical? Self-identity image advertisement (image ad): an advertisement that create a symbolic image of an idealize persons and attempt to persuade the audience to purchase a product in order to identify themselves with that image. Central moral issues of image ads: (a) whether they make false or misleading promises; (b) whether they promote false values; (c) whether they cause harm; (d) whether they threaten the autonomy of the individual For many of the same reasons as Arrington, Bishop does not feel that image ads threaten autonomy. We will focus on the potential harms that Bishop sees in these ads. Example Ad 1: Beautiful Woman - Chanel This ad equates beauty and flawless skin with Chanel. Example Ad 2: Sexy Teenagers - Calvin Klein This ad equates youth and sex with Calvin Klein. Image ads don't make false promises because their audience, in general, do not believe that the products will actually grant certain attributes literally associated with the images. Problems Associated With Presuppositions May communicate information to the audience that the audience is not aware of, thus damaging autonomy. May recommend false values. May have a cumulative effect that is damaging. The gaze presupposed by the ad may be damaging. False Values: In order for an image ad to work, it must present an image of something that is supposed to be of value. The image may present something in such a way as to showcase its value, imparting value upon something that would not otherwise have value. The form of the image ad itself can become a medium for communicating the idea of value. The Cumulative Effect of Presuppositions Emphasis on certain portrayals of an image, act or event throughout the media may be problematic, even though particular portrayals of that thing are not problematic. For example, an individual portrayal of a certain kind of activity for a particular group may be harmless. However, if almost every portrayal of this group is of this activity, this may be harmful. This problem does not face advertising alone. There are many people who look for the portrayal of stereotypes in legitimate news. Gaze Image ads work when the audience indulges in an act of self-identification with the image presented. Implied gaze is the gaze that is implied to fall on the image of the advertisement. There is somewhat of a narrative to the advertisement, which the audience follows in their self-identification. This allows them to determine who they are as they take the role of the image and who is looking at them in the role of the image. This potentially erodes self-esteem because it encourages the audience to act, in their own life, as if they are under that gaze. When the gaze is such that the audience is being judged according to an image impossible to achieve, this is supposed to cause damage to self-esteem. This is not a problem with the content of advertising, but with a certain technique. David M. Holley, Information Disclosure in Sales In order to attempt to determine how much information a salesperson should reveal to a potential customer, Holley addresses two issues: (1) To what extent can ethical argument help to define the moral responsibilities of a social role when these are only vaguely defined in a culture? (2) How is empirical information about common practice relevant to making normative judgments? 5 Point Information Responsibility Scale Minimal Information Rule: All responsibility for information (save that of not deceiving) lies with the buyer. Modified Minimal Information Rule: As above, but the salesperson must provide safety information. Fairness Rule: As above, with the addition that the salesperson must provide that information about the product that the buyer could not be reasonably expected to know unless informed by the salesperson. Mutual Benefit Rule: The salesperson must provide the buyer with all information about the product that the buyer would need to know in order to make a reasonable decision about buying the product. Maximal Information Rule: The salesperson must provide the buyer with all information about the product that is relevant to its purchase. Considerations The salesperson must play the role of an advocate of the product. This must play a part in out decision of how much information the salesperson reveals. One cannot simply view the sales relationship as a game, because different sales environments are different and have different expectations. Buyers often have no choice but to rely on the information given to them buy salespersons. They can only voluntarily consent to the limits of their knowledge. On the face of it, it seems unethical for salespersons to enter into certain arrangements that take advantage of buyer ignorance. Safety concerns are of this nature. This speaks in favour of moving up to at least the Modified Minimum Information Rule. Holley on voluntary exchange (cited in Carson, pg. 436 in text) An exchange is voluntary only if the following conditions are met: Both buyer and seller understand what they are giving up and what they are receiving in return. Neither buyer nor seller is compelled to enter into the exchange as a result of coercion, severely restricted alternatives, or other constrains on the ability to chose. Both buyer and seller are able at the time of the exchange to make rational judgments about its costs and benefits. The Fairness Rule Gives all parties in a transaction equal protection. Everyone has a chance to protect his or her interests. Enacting this rule requires that a salesperson treat individual customers differently. Customers with greater knowledge, ability, and experience do not need the same kind of information provided to them as other customers. Vulnerability and Dependence According to our moral intuition, it seems wrong to take advantage of those who rely on our trust or are incompetent when t comes to making certain decisions. This is not to say that a salesperson should refuse a legitimate sale, but that a salesperson should perhaps not advocate their product to certain individuals. Often, consumers look to salespersons as consultants rather than as advocates. It might be possible to remove the consultant role of salespersons, but not practical. Some businesses even highlight the role of their salespersons as consultants. (E.g. Home Depot.) These considerations show that it is appropriate to go beyond the Fairness Rule in these situations. The Mutual Benefit Rule This rule covers all of our previous concerns. In situations where a consumer is experienced with a product or an industry, this rule acts as the Fairness Rule. In other circumstances, it requires the salesperson to provide information that matches the obvious concerns of the customer. This rule requires that the salesperson reveal information about the product that would significantly lower the value of the product (relevant to any obvious desires of the customer). Thomas Carson, Deception and Withholding Information in Sales Distinctions: lying, deceiving, withholding information, concealing information Lying: providing a statement that is personally known to be untrue Deceiving: Acting so as to cause someone to accept a belief that one knows to be false. Withholding information is not deception because it is merely allowing someone to continue to hold a belief one knows to be false. Concealing information is deception because it encourages someone to accept a belief that one knows to be false. Caveat emptor: A legal principle that the buyer is responsible for determining the quality of the goods he or she purchases. Criticisms of Holley 1. Providing the information that Holley suggests is often not possible. A. Salespeople often do not know all the relevant information. B. Salespeople often don't have the time to impart al the information on customers. C. Salespeople often do not know enough about the individual customer to gauge what information they could be providing. 2. Holley's theory seems to indicate that it is the duty of the salesperson to inform customers of the prices of rivals. 3. Salespeople have duties to their employers that may interfere with the disclosure of information. 4. Holley's restrictions are too sever for certain restricted circumstances. Prima facie duties: Duties that one has in the absence of any other, conflicting duties or greater or equal importance. 1. Provide safety information. 2. Refrain from lying. 3 Fully answer questions about the product at hand, as long as competent to do so and time allows. 4. Avoid advocating products to consumers that are likely to harm those consumers. (The following duties are ones of which Carson is less sure.) 5. Don't sell customers products that will harm them without first providing them with the reasoning for this judgment. 6. Do not sell items known to be defective without a warning. Justification for Carson's Theory Moral intuition (and survival of challenges) The Golden Rule (and the consistency requirement) The Golden Rule (pg. 441) Consistency requires that if you think that it would be morally permissible for someone to do a certain act to another person, then you must consent to the idea of someone else doing the same act to you in relevantly similar circumstances.  Support for the Prima Facie duties: We all appreciate the need to be warned of danger. We all need correct information in order to base our decisions upon. Salespeople also must buy goods and receive information about them. (They must not answer questions about their competitors because of the duty to their employer. Moral consistency requires that we consider the employer as well.) No one can consent to the idea that they should be manipulated into doing something that would cause harm to himself or herself.   Home.

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