The 1938 law banned only factually false ads, not misleading inferences

Evidence

In 1938, a far weaker law was passed; the Federal Trade Commission regained its powers to oversee advertising through a ban on “unfair or deceptive acts or practices,” which referred only to factually untrue statements, not the potential inferences targeted by Tugwell. The new law reflected “a five-year effort to render such protections painless for business interests”; and many at the time argued, like Milton Handler, a law professor at Columbia, that it did not go far enough: “While the [new law] represents a sincere attempt to stem the avalanche of false and misleading advertising, it is no more than a first, and unfortunately, inadequate step in that direction. Unless buttressed by clarifying amendments broadening its prohibitions and implementing it with effective sanctions, it will not effect an abiding solution of the vexing problem of false and misleading advertising.” — Tim Wu, The Attention Merchants, 281

Categorization

• DEFINE: Clarifies the narrow statutory scope of the Wheeler-Lea Act — it distinguished ‘factually untrue’ statements from ‘potential inferences,’ a definitional boundary still relevant to modern ad regulation.