Arguments are underway in a major court case involving Nike and its right as a business to express an opinion on the issue of sweatshops.

Marc Kasky, an anti-globalization activist, sued Nike in 1998 after the company ran a public relations campaign to counter attacks on working conditions at its plants in Asia.

Nike reassured consumers its products were made under humane conditions.

Kasky wanted the courts to order Nike to correct its statements and give up all the profits it made by allegedly deceiving the public.

The case went to California's Supreme Court, which ruled Nike's campaign constituted commercial speech because it was "likely to influence consumers in their commercial decisions."

That means Nike's campaign would be subject to government regulations about false advertising and unfair competition.

"The company was making representations to consumers about its practice for the purpose of convincing consumers to buy its products," said Kasky's lawyer Paul Hoeber told the Supreme Court.

The case is being closely watched by corporations because it could redefine the free-speech rights of businesses.

Justice Stephen Breyer says Nike has being doing two things at the same time — debating and selling — making it difficult to decide which law should apply.

U.S. Solicitor General Theodore Olsen supports Nike's position. He says Kasky didn't suffer any harm from the Nike campaign. Olsen says he fears the ruling in Kasky's favour would open the floodgates for any grievances anyone might have against corporations for saying anything.