I agree with the line of thought that Koolaid mentioned.
It can be argued that this type of advertising is a form of "bait and switch",
which is considered fraud and illegal.
The bait is "the product is free", and the switch is "no it is not. part of it is free."
"Bait and switch advertising" in a Google search (without the quotes) includes these results:
http://en.wikipedia.org/wiki/Bait_and_switch
http://news.cnet.com/Dell-sued-over-...3-5587443.html
Even if somehow this advertisement fits clauses of existing/current law (which is usually not conclusive until a lawsuit is filed and it is tried in a court of law; at least in the US), then it could still be argued that the law clauses may not be sufficient to cover this situation.
If you ask me, regardless of what the clauses of laws are,
in a universal sense, it is wrong because it is "misleading".
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