In the case of Jacob Siegel Co. v. Federal Trade Commission, 1945, the U.S Supreme Court ruled in favor of the Federal Trade Commission (FTC). The FTC had charged Jacob Siegel Co., a clothing manufacturer and retailer, with deceptive practices for misrepresenting their products as being made from "worsted" wool when they were not entirely composed of this material. The company argued that it was common industry practice to use such terms loosely and that consumers did not necessarily interpret them literally. However, the court upheld an order by FTC requiring Jacob Siegel Co. to cease its misleading advertising practices on grounds that regardless of industry norms or consumer perceptions, false representation is unlawful under Section 5 of the Federal Trade Commission Act which prohibits unfair or deceptive acts or practices in commerce.

In the dissenting opinion for Jacob Siegel Co. v. Federal Trade Commission, Justice Robert H. Jackson argued that the majority's decision to uphold the FTC's cease and desist order was a misinterpretation of Section 5 of the Federal Trade Commission Act, which prohibits "unfair methods of competition." He contended that this section should not be interpreted so broadly as to include any business practice deemed unethical or oppressive by FTC standards; rather, it should only apply to practices that harm competitive conditions in a market. In this case, he believed there was no evidence showing that Jacob Siegel Co.'s use of deceptive price tags harmed its competitors or distorted market competition in any way. Therefore, he disagreed with treating such conduct as an unfair method of competition under Section 5 and would have set aside the FTC's order.