The US Supreme Court – not unused to knotty legal problems – is seemingly discombobulated by the distinction between advertising and free speech. This ambivalence led it to decline making a ruling between the two, thereby allowing a lawsuit to proceed against Nike.
In an attempt to have the case thrown out of court, the sportswear giant invoked the US constitution and pleaded free speech in defence against a ‘false advertising’ suit by human rights activist Marc Kasky.
The suit arose from the rash of allegations during the 1990s which accused Nike of using sweatshop sub-contractors in China, Vietnam and Indonesia. Nike then launched a massive public-relations campaign to proclaim its innocence. The campaign led Kasky to condemn it as ‘false advertising’ and sue accordingly.
But Nike’s battery of attorneys insisted this was not ‘advertising’ but free speech, the right to which is guaranteed by the US Constitution. This argument, however, was ducked by the Supreme Court which declined by six votes to three to distinguish between the two.
Nike was not best pleased by this high level legal fence-sitting. “Companies should be free to voice their opinions through PR or advertising on major issues that impact their business,” fumed a spokesman, pledging to pursue the “fight to preserve the right to free and open debate”.
[WAMN, foolishly ready to rush in where angels fear to tread, respectfully suggests to the Supreme Court that ‘free speech’ is exactly that – free. Advertising and PR, on the other hand, is not!]
• But all is well at Nike – dollarwise, at least – with Phil Knight, chairman of the Beaverton, Oregon-headquartered giant, hailing its last fiscal year as one “for the record books” achieved “despite a challenging geopolitical and economic environment”. Total sales for the twelve months to the end of March were up 8% at $10.7 billion (€9.36bn; £6.47bn) with profits of $740.1 million, compared with $668.3m the previous year.
Data sourced from: BBC Online Business News (UK); additional content by WARC staff