In the case of Federal Trade Commission v. Colgate-Palmolive Co., et al., 1964, the U.S. Supreme Court ruled in favor of the Federal Trade Commission (FTC). The FTC had accused Colgate-Palmolive and its advertising agency, Ted Bates & Company, Inc., of deceptive practices for a television commercial promoting Rapid Shave shaving cream. In this advertisement, it was falsely implied that a bowling ball could be shaved with their product due to its sandpaper-like texture being removed by Rapid Shave's "super moistening" power. Both companies argued that they were not liable because no explicit false statements were made in the ad; however, they admitted to using trick photography to create an illusionary effect. The court held that even if there are no literal falsehoods present in an advertisement, it can still be considered misleading if it has a capacity or tendency to deceive consumers.

In the dissenting opinion for the Federal Trade Commission v. Colgate-Palmolive Co., it was argued that while deceptive advertising is harmful and should be regulated, there must also be a balance with commercial free speech rights. The dissenting justices believed that the majority's decision to uphold FTC's broad powers in regulating advertisements could potentially infrify on First Amendment rights of advertisers. They contended that not all misleading ads are intentionally deceptive or cause substantial harm to consumers, thus they shouldn't automatically fall under strict regulation by FTC. They expressed concern over potential chilling effects this ruling might have on creativity and innovation in advertising industry due to fear of punitive actions from regulatory bodies like FTC.