The FTC recently settled with Teami, LLC (“Teami”), an indication that the Agency is still actively reviewing health claims and monitoring social media influencers for proper disclosures. Teami allegedly brought in over $15 million through its deceptive marketing tactics, but given the company’s financial condition, the FTC agreed to partially suspend its $15.2 million judgment
It seems to be another star-spangled banner year for the Federal Trade Commission (“FTC”) and its crackdown on certain “Made in USA” claims. In 2016, the FTC cited 29 companies for their misleading “Made in USA” claims. With the year’s halfway mark behind us, reports indicate that the FTC has similarly warned 11 companies for…
On October 5, 2016, the Federal Trade Commission (FTC) settled its case with Supple, LLC over certain advertising claims regarding its Supple joint supplement. Between 2011 and 2015, the company advertised (via social media, radio, and in-person pitches) that the supplement was scientifically proven to provide complete relief from chronic and severe joint pain stemming …
This week, the Center for Science in the Public Interest (CSPI), a nonprofit nutrition and food-safety watchdog group, filed a class action against PepsiCo, alleging that Pepsi misled consumers by marketing its popular Naked Juices as healthier than they really are. The complaint alleges product packaging and advertising for Naked Juices suggest or imply that…
A UK website offering reviews of accounting software that was operated by TheAccountancyPartnership.com Ltd t/a Pandle (“Pandle”) was recently challenged by Crunch Accounting Ltd (“Crunch”) on purported misleading advertising and unfair comparisons with identifiable competitors. Crunch complained to the UK advertising regulator, the Advertising Standards Authority (the “ASA”) (see:…
Sniffing something fishy in the sea of consumer reviews, the National Advertising Division (NAD) snapped its jaws at advertising claims made in television commercials, infomercials, and on the Web by Euro-Pro Operating for its Shark brand vacuum cleaners. The advertising was brought to the NAD’s attention by competing vacuum cleaner manufacturer, Dyson, Inc. The claim at issue was:
“America’s Most Recommended Vacuum Brand.*
*Based on percentage of consumer recommendations for upright vacuums on major national retailer websites through August 2013, U.S. Only.”
What was special about this case was that Euro-Pro sought to substantiate its “most recommended” claim on aggregated consumer reviews.
The first issue was, what did the claim really mean? Dyson said it meant that the Shark is the most recommended vacuum among vacuum cleaner owners, nationwide, and that the claim communicated a comparative message, namely that the Shark was recommended over other brands. Euro-Pro, on the other hand, thought the claim was as clear as Caribbean water: the Shark is “America’s Most Recommended Vacuum Brand” “based on percentages of consumer reviews for upright vacuums on major national retailer websites through August 2013.” There was nothing comparative about the statement, according to the advertiser. Interestingly, the NAD tended to side with the advertiser’s interpretation, namely that the claim “America’s Most Recommended Vacuum Brand*” reasonably conveyed a message that Shark is the most recommended vacuum brand among American vacuum cleaner consumers. However, it interpreted the asterisked second part of the claim to be an explanation of how Euro-Pro sourced the data on which it based its claim. So, the Shark wins, right? Not so fast.
Continue Reading NAD Jumps the Shark on Use of Consumer Reviews as Substantiation
Just in time for the New Year, as thousands of people are making weight loss resolutions and searching for ways to stick to them, the Federal Trade Commission (FTC) released updated guidance for publishers and broadcasters on how to evaluate weight-loss claims when screening ads for publication. The imposition of liability on the media for deceptive claims that are published is not new, and major television networks already pre-clear advertisements to ensure that they not misleading violations of section 5 of the FTC Act. Thus, the guidance does not create new liability for publishers, but rather provides a reminder for publishers to be vigilant when it comes to weight-loss claims.
Continue Reading FTC to Media: Time to Lose Some Pounds
Two nonprofits, the Alliance for Natural Health – USA, and TechFreedom, released a report last week alleging that the Federal Trade Commission broke free speech laws when in January 2013, it barred POM Wonderful from asserting that its pomegranate juice is “effective in the diagnosis, cure, mitigation, treatment, or prevention of any disease,” including heart disease, prostate cancer, and erectile dysfunction, unless the claim is supported by two randomized, well-controlled, human clinical trials. In their report, the nonprofits estimate that the two clinical trials required by the FTC could cost up to $600 million each.
The POM order highlights the balancing act between requiring substantiation to ensure a claim is truthful and not misleading to consumers, and overly burdensome substantiation requirements that suppress otherwise truthful speech. The nonprofits’ report criticizes the FTC’s ruling as falling into the latter category by requiring an enormously increased level of substantiation.
Continue Reading Advocacy Groups Say FTC is at Odds with the First Amendment
One of the major components of broadcasting commercials on national networks is obtaining pre-approval from the network clearance departments. Such clearance considers many aspects of a commercial’s content, but often the most challenging area is substantiation of claims.
The networks require that all advertising claims be valid and adequately substantiated. A research editor at each…