Gatorade recently handed $300,000 to California to settle false advertising and unfair competition claims that boil down to making water look bad. The company released an app in 2012 called “Bolt!” that featured an animation of Jamaican Olympic gold medalist, Usain Bolt, racing to recapture gold coins from pirates. Gatorade icons boosted performance and water hindered performance. The tutorial explicitly advised users, “Keep Your Performance Level High By Avoiding Water.” According to the complaint, users downloaded the app over 2.3 million times and played the game over 87 million times—and over 70% of them were 13-24 years old.

The final judgment enjoins Gatorade from making apps or games available for download that create the misleading impression that water hinders or adversely affects athletic performance, water should generally be avoided in favor of Gatorade, athletes avoid consuming water, or water consumption should generally be avoided. The judgment further enjoins Gatorade from making any other statements that disparage water or its consumption. Additionally, Gatorade must make reasonable efforts to include provisions in endorsement contracts that require endorsers to clearly and conspicuously disclose their relationship with Gatorade and to abide by the PepsiCo Policy on Responsible Advertising to Children.

Takeaway: Companies should pay extra attention to health claims, including those which may simply compare their products to water.