Consumer Advertising Law Blog

FDA “Gluten-Free” Regulation Reaches Homestretch of Regulatory Marathon

The Food and Drug Administration’s (FDA’s) proposed regulation defining the term “gluten-free” for food-labeling purposes has at last reached the White House for final approval. Approval by the White House Office of Information and Regulatory Affairs (OIRA) would conclude a regulatory process that began in 2005 in an effort to protect consumers who suffer health-threatening reactions to gluten, a protein in grains and found in such everyday foods such as bread and pasta.

Though harmless to most individuals, gluten -- a protein found in wheat, rye, and barley -- causes intestinal damage to people with celiac disease (CD). The National Institutes of Health estimates that CD affects as much as 1 percent of the U.S. population. For individuals with the disease, gluten consumption can cause abdominal pain, bloating, and vomiting and can lead to serious health problems such as anemia, osteoporosis, diabetes, and intestinal cancer. The only treatment for CD is strict adherence to a gluten-free diet, and the absence of labeling regulations has caused confusion for consumers seeking to purchase gluten-free foods, and uncertainty for food manufacturers seeking to provide gluten-free labeled products.

Under the agency’s proposed regulation, a food may be labeled “gluten-free” if it contains less than 20 parts per million (ppm) gluten.  The < 20 ppm standard is based in part on the lowest level at which currently available test methods can reliably detect gluten (although FDA has indicated in a Q&A document that it would be open to reconsidering the threshold if more sensitive methods become available). It is also consistent with the 20 ppm standard adopted by the European Union.

FDA first proposed its definition in January 2007. After years passed without any further rulemaking, and in the face of mounting criticism including by two US senators,FDA re-opened the proposed rule to public comment in August 2011. Simultaneously, the agency invited comment on its study of the adverse health effects of gluten exposure to individuals with CD, which found that a 0.01 ppm threshold would be protective of even the most highly sensitive individuals. As explained in the proposed regulation, FDA concluded that the study should not be used to define “gluten-free” because “the estimation of risk to individuals with celiac disease associated with very low levels of gluten exposure may be conservative and highly uncertain.”  FDA expressed concern that a threshold lower than < 20 ppm could cause food manufacturers either to label fewer foods as gluten-free or raise the price of foods so labeled, thereby making it harder for people with CD to adhere to a gluten-free diet.

The proposal received thousands of comments, including those in support of the < 20 ppm standard, some that urged a lower threshold, and others that weighed in on the test methods that FDA proposes to use to assess compliance for foods bearing “gluten-free” labels. 

The proposed rule is now with OIRA for final approval before it can be enacted.  The rule has been deemed “economically significant,” meaning that it is expected to have annual impact on the economy of $100 million or more.  While this designation may prioritize review of the rule, it may also invite greater scrutiny. 

- Anita Kalra and Matthew Shultz 

Fishy Labeling

Customers buying seafood at restaurants and grocery stores frequently may not be getting what they order. A recent study conducted by the group Oceana, found that 27 percent of grocery stores, 52 percent of non-sushi restaurants, and 95 percent of sushi restaurants surveyed sold mislabeled seafood.  The group describes itself as the “largest international organization focused solely on ocean conservation.”

The Oceana study, conducted from 2010 to 2012, is one of the largest reported seafood fraud investigations to date. The group collected 1,247 samples from 674 retail outlets in 21 states. Genetic identity was determined for 1,215 of the samples, and of those, it was found that approximately one-third were mislabeled.  Mislabeling rates varied greatly among the types of seafood involved, with fish sold as “tuna” and “snapper” having the highest mislabeling rates.

In describing the methods used for the study, Oceana stated that it considered a fish sample to be mislabeled if “seafood substitution occurred or if retailers were not following the [FDA] Seafood list.”  The FDA’s Guide to Acceptable Market Names for Seafood Sold in Interstate Commerce provides guidance to the seafood industry on the labeling of different species. The FDA makes it clear that its Seafood List does not establish legally enforceable responsibilities per se in labeling. However, seafood mislabeling can be actionable under the Misbranding Section of the Federal Food, Drug, and Cosmetic Act, and under state statutory and regulatory provisions, as well as the common law.

Some critics of the study have suggested that Oceana overstates the mislabeling issue, noting that different vernacular names are used for the same type of fish in different regions of the country.  In fact, this illustrates the pitfalls that even well-meaning retailers may face in attempting to label their seafood so as not to mislead. Thus, the FDA itself comments that a vernacular name, even if common in a particular region, may not be acceptable as a market name for use in interstate commerce.  When it comes to seafood, it’s not only the quarry, but the name of the quarry that can be elusive. 

The obvious injury from seafood mislabeling is that customers will be duped into paying more than they should for what they are actually getting. But depending on the particular species involved, mislabeling can also defeat customer attempts to choose sustainable seafood options. Fishery sustainability is a growing concern of many conservation-minded consumers. In response, conservation organizations have published pocket guidelines for consumers to use in making their seafood choices; and some grocery stores and restaurant groups have taken to promoting  their seafood sourcing policies to attract environmentally-conscious customers.  In a prior post, we discussed how seafood sustainability certifications themselves may be misleading consumers in this regard.  Inasmuch as any certification process necessarily depends on accurate labeling of the product being sold, seafood mislabeling has the potential to exacerbate the problem.

There is potential legal exposure for seafood businesses at every step in the supply chain here-- from fishermen to brokers to retailers and restaurants. Certainly, those who intentionally mislabel seafood for sale are subject to liability for fraud and unfair business practices. Less clear is the degree of exposure for retailers and middlemen who inadvertently sell mislabeled fish. Following a similar seafood investigation conducted by the Boston Globe, several restaurants blamed suppliers for providing them with incorrectly labeled fish, which they in turn innocently served to customers. Given the apparent frequency and risks of such mislabeling, blind reliance on the integrity and competence of one’s suppliers may not be enough. Prudent retailers will consider measured steps to better ensure that they are serving what they claim and to demonstrate their own due diligence in that regard. Like chum in the water, Oceana’s study may begin drawing the interest of state attorneys general and the plaintiff’s bar.

- Christina Brenha and Dirk Schenkkan

A Reminder for Those Eager to Jump on the “Made in U.S.A.” Bandwagon

“Made in U.S.A.” is back in the news and on the minds of consumers and manufacturers alike.  Whether it is a desire to support American manufacturing jobs, a perception that the quality is superior, or just plain patriotism, Americans love “Made in U.S.A.” products.  A recent USA Today article reports on these consumer sentiments and highlights the trend of manufacturers and retailers using “Made in U.S.A.” in their marketing efforts in hopes of turning that love of America into dollars.  The article reports the findings of a Boston Consulting Group survey which found that over 80% of U.S. consumers would pay more for “Made in U.S.A.” products.  93% of those who are willing to pay more cite the desire to support American jobs.  With everyone from Wal-Mart to Caterpillar and 3M recognizing the marketing value of “Made in U.S.A.,” we think it is a perfect time to remind our readers of the potential bumps in the road for those who jump on this bandwagon. 

Companies who want to make an unqualified “Made in U.S.A.” claim -- whether on packaging or in advertising -- must be careful to comply with relevant federal and state standards, particularly California’s.  As we have previously blogged, the FTC’s “Made in U.S.A.” standard, while seemingly straightforward, is very stringent and can be challenging to meet for many manufacturers.  The FTC’s “all or virtually all” made in the United States standard requires that “the final assembly or processing of the product must take place in the United States” as a minimum threshold.  But satisfying this threshold alone is not enough.  The FTC also considers the “portion of the product’s total manufacturing costs that are attributable to U.S. parts and processing.”  While the FTC makes this determination on a case-by-case basis, the percentage of the manufacturing costs that that must be attributable to U.S. parts and processing is very high--often 90% or more.  And, companies cannot just buy a component from a U.S. supplier and “simply assume that the component is 100% U.S. made.”  The standard considers that remoteness of any foreign content in the finished product, and the FTC’s guidance suggests that the company should at least find out how much of the component is U.S. made.  While the FTC last filed a “Made in U.S.A.” complaint in 2009, that does not mean that the FTC has been inactive.  As the USA Today article notes, FTC staff report receiving “several complaints each month.”

However, companies whose marketing or products reach California -- and given the size of California’s market, as a practical matter that means just about any business that sells to American consumers --  must contend with an even more stringent standard.  As we have blogged, the California standard, as interpreted by California courts, goes well beyond the FTC standard and prohibits “Made in U.S.A.” claims if the product “or any article, unit, or part thereof,” is “entirely or substantially made, manufactured, or produced outside of the United States.”  In practice, this has meant that “Made in U.S.A.” labels are prohibited if any part of the product--even a small component such as a light bulb or O-ring in a flashlight that cannot be sourced domestically-- is “substantially” made overseas.  The impact of this standard, which effectively prevents many products that otherwise meet the FTC standard from being marketed in California as “Made in U.S.A.,” has not escaped the attention of the business community and legislators.  Last year, a bill to amend the California law to bring it in line with the FTC standards passed the California Assembly unanimously.  But, faced with what has been described as “heavyweight opposition from consumer groups and personal injury attorneys,” the bill was defeated in the California Senate Judiciary Committee. 

So, while the desire to capitalize on consumers’ love of all things American is unlikely to cool anytime soon, companies who make unqualified “Made in U.S.A.” claims should tread cautiously, particularly in California.

- Lauren Peay and Angel Garganta

Wal-Mart’s Holiday Price Comparison Advertisements Irk Competitors

Retailers, including Best Buy, Toys ‘R’ Us, and several regional supermarket chains, have filed complaints with at least six state attorneys general regarding Wal-Mart’s price comparison advertisements, which ran during the 2012 holiday season.  Wal-Mart’s ad campaign purported to compare its prices on specific items to those of competitors.  The retailers who have complained maintain that the advertisements were misleading in several ways, including comparing different models of the same product, citing incorrect competitor prices, and advertising products that were in low stock at Wal-Mart Stores. 

The retailers’ complaints were filed in Michigan, Illinois, Pennsylvania, Missouri, Florida and New Jersey pursuant to those states’ various false advertising or anti-deceptive advertising statutes.  Although laws can vary significantly by state, most state false advertising laws have a few main elements in common: all statements in an advertisement, whether express or implied must be truthful, and must not reflect an effort to deceive the consumer.  The complaints are apparently in various stages of review and investigation and it remains unclear how the attorneys general will proceed. 

Best Buy claims that Wal-Mart’s advertisement offering a Dell laptop computer for $251 less than Best Buy was misleading because it did not compare the two retailers’ prices for the same product.  According to Best Buy, the Dell laptop Best Buy offered for the price cited in Wal-Mart’s advertisement had different specifications and longer battery life than the one offered at Wal-Mart.  Best Buy also alleged that Wal-Mart advertised the iPhone 5 for $150 even though it had an insufficient stock of the iPhones.  Best Buy states that it lost several thousands of dollars because it was forced to sell the iPhone 5 for $150 due to its price matching policy.

Toys ‘R’ Us similarly claims that Wal-Mart heavily advertised one of the season’s hottest toys, the Fijit, even though the toy was not available through Wal-Mart’s website and was out of stock at several of its stores.  Other retailers dropped their prices in response to the advertisements.  Toys ‘R’ Us also claims that Wal-Mart’s advertisements for the Fisher-Price Surprise Kitchen and Table Set and the Holiday Barbie incorrectly stated the price of the toys at Toys ‘R’ Us.

In 1994, Wal-Mart settled a dispute involving similar claims with Michigan’s attorney general.  Following complaints by Target Corp., Meijer Inc., and Kmart Corp., Wal-Mart agreed to make changes to its price comparison advertisements, including no longer comparing dissimilar products.

The FTC has guidance in this area. The Guides Against Deceptive Pricing permit retail price comparisons where the comparison is “based upon fact” and is not “fictitious or misleading.” This means, among other things, that the products being compared must be comparable or competing -- i.e., of like grade and quality.  The Guides Against Bait Advertising prohibit a retailer from advertising merchandise unless it has sufficient inventory to satisfy reasonably anticipated demand, or clearly disclose that supplies are limited or that the merchandise is available only at certain locations.

Wal-Mart stands by its price comparison advertising campaign, and the company has responded to attorneys general in four states, addressing complaints by Toys “R” Us and regional supermarkets. The flurry of complaints by Wal-Mart’s competitors serve as a reminder that businesses should exercise caution in verifying not only express price comparisons but also those that are implied. 

- Christina Brenha and Amie Medley

Purported Fresh Orange Juice Class Action Won’t Squeeze Defendant

A federal court in Alabama recently dismissed a putative class action challenging the labeling of Florida’s Natural Orange Juice as “100% orange juice,” “fresh,” and “pure,” when the product had allegedly undergone processing and contained added flavors and aromas.  The plaintiff asserted claims for breach of contract and breach of express warranty. This case is one of several similar cases brought against orange juice manufacturers in recent years, including at least two other cases brought by the same plaintiff that are pending in the Northern District of Alabama.  Veal v. Winn Dixie Stores, Inc.; Veal v. Wal Mart Stores, Inc.

In granting the motion to dismiss, the court held that the named plaintiff lacked standing because he had not suffered an actual injury by purchasing the Florida’s Natural Orange Juice. The court doubted the plaintiff’s assertions that he believed the juice to be fresh squeezed, stating that “[a]s a matter of common sense, whatever is in a container on a store shelf with an expiration date some weeks hence cannot contain ‘fresh’ anything.” The court went on to state that even if the plaintiff “believed defendant hired individuals to hand squeeze oranges one by one into juice cartons,” learning that the orange juice was commercially produced did not amount to an injury. According to the court, the plaintiff simply did not allege any harm when he purchased and received the exact product, packaged orange juice, that he intended to purchase. 

The court also rejected the plaintiff’s argument that his injury arose when he allegedly did not receive the benefit of the bargain. Put simply, the court stated “[h]e paid for orange juice mass produced and supplied to grocery stores all over the country, and that is exactly what he received.”  

After finding that the plaintiff had failed to allege any injury, the court went on to note that there were no remedies to redress the plaintiff’s grievances and injunctive relief was improper. Finally, although unnecessary to its holding, the court noted that Florida Natural Orange Juice was properly labeled under FDA standards, suggesting that the plaintiff could not suffer injury by purchasing a product that had been labeled in accordance with those standards.

The court denied the plaintiff’s motion to amend the complaint because there was “nothing in the labeling of Florida Natural Orange juice that would in any way deceive a reasonable consumer into believing that the orange juice in question is anything but pasteurized orange juice.” 

Offering insight into the apparent motive of many food-related consumer class actions, the court also noted that it viewed plaintiff counsel’s actions as “shopping for plaintiffs in an attempt to manufacture a claim,” which the court would not countenance. 

The court’s opinion was a refreshing win for the juice maker, in what has become a hostile climate of food-and-beverage related consumer class actions.  However, the reach of the holding in this case may be somewhat limited, as the plaintiff did not assert a false advertising or misrepresentation claim, which are often at the core of these cases.  

- Ginamarie Caya and Jack Koenig

More Than Just Bed Bugs Keeping FTC Up at Night

The Federal Trade Commission (FTC) is set to litigate its deceptive advertising claims against Springtech, the marketers of Best Yet!, a cedar oil-based solution that claims to eliminate bed bug and head lice infestations. 

On September 5, 2012, the FTC filed deceptive advertising charges against both Springtech 77376, LCC and RMB Group, LLC, makers of bed bug and lice treatments. What makes this case interesting is Springtech’s decision to fight the charges. While RMB Group settled with the FTC, Springtech refused. 

The FTC is making three deceptive advertising claims against Springtech: (i) a lack of substantiation claim, (ii) a false claim of government affiliation, and (iii) a false claim about an EPA recommendation.  The FTC alleges that Springtech lacked adequate support prior to making claims that its cedar oil spray is a “contact killer” of bed bugs and is “far more effective than synthetic chemicals” at stopping and preventing bed bug infestations.  The FTC also intends to pull the sheets over Springtech’s claims that its products are “scientifically tested and proven” to be effective.  According to the FTC, scientific studies do not prove that Springtech’s products are effective.

Springtech also got under the FTC’s skin by making allegedly false claims about its affiliation with the federal government.  (In advertisements, Springtech claimed that its bug spray was “developed at the request of the USDA for our military,” and has been “acknowledged by the USDA as the number one choice of bio-based pesticides.”) One of the FTC’s likely concerns here is that false claims of affiliation may mislead consumers about the product’s quality, reliability, efficacy, or value, by falsely implying that the products have the aura of federal government legitimacy. 

Lastly, the FTC is losing sleep over Springtech’s claim that “the EPA recently warned victims fighting bed bugs to ‘avoid chemical solutions altogether,’” which the FTC maintains is simply not true.  Rather, according to the FTC, the EPA recommends a combination of techniques to fight bed bugs, including prevention, monitoring, and limited use of chemical pesticides.  Although not alleged in the FTC’s complaint, this type of claim could also raise concerns about overstating the safety or environmental benefits of the product.

We will be sure to keep our eyes open to see how this case progresses.  It will be interesting to learn the arguments Springtech makes in support of its claims, and what effect those arguments could have on future substantiation and government affiliation claims.   

- Angel Garganta and Brittany McClure

You Touch It, You Own It -- FTC Settlement Stemming from Misleading Advertisement Encompasses Wide Range of Involved Parties

The Federal Trade Commission (FTC) announced last week that it reached a settlement with the marketers of an exercise device named the “Ab Circle Pro” that was sold online and through television infomercials.  Like many “revolutionary” pieces of exercise equipment sold through infomercials, the Ab Circle Pro was marketed as “the most innovative piece of exercise equipment ever” because it enabled consumers to achieve incredible weight loss results with very little time and effort for the low price of “$14.95, plus shipping and handling.”  The advertisements compared a three minute workout with the Ab Circle Pro to “30 minutes of abs and cardio” and claimed that “just three minutes a day” of exercise using the device was the equivalent of “100 Sit Ups.”  The advertisements also “guaranteed” results with a “30-day-risk free trial” and assured consumers that they would either “lose ten pounds in just two weeks or [receive their] money back.”  As usual, the infomercial featured numerous testimonials from users who had lost weight using the Ab Circle Pro, and the host of the infomercial was an “incredible fitness celebrity” and “busy mom,” Jennifer Nicole Lee, who claimed that she “lost over 80 pounds” using the “miracle breakthrough” device. 

The FTC investigated the claims made in the Ab Circle Pro advertisements and concluded that the device was not the “miracle breakthrough” that was advertised because “just three minutes a day” of exercise using the device was not the equivalent of “30 minutes of abs and cardio” or “100 Sit Ups.”  The FTC also concluded that the claims about “rapid and substantial weight loss” were deceptive because the advertisements failed to appropriately disclose that the advertised weight loss could only be achieved through “a reduced calorie diet and engaging in cardiovascular exercise, in addition to using the Ab Circle Pro.”  Moreover, the FTC discovered that “$14.95, plus shipping and handling,” actually meant a $235 to $285 charge to most consumers (including delivery fees).  Finally, the FTC found that video testimonials from the host and alleged users of the Ab Circle Pro were misleading because they suggested that use of the Ab Circle Pro caused weight loss that was actually achieved with cardiovascular exercise and dieting.  Accordingly, the FTC filed a complaint against the owners of the rights to the Ab Circle Pro, the host of the infomercial, the producers of the infomercial and the distributors of the Ab Circle Pro.  A day after the complaint was filed, proposed settlements with each defendant were filed.

To settle the FTC claims, Fitness Brands, Inc., agreed to pay $1.2 million in consumer refunds.  Fitness Brands was a key defendant in this case because it was allegedly the owner of the rights to the Ab Circle Pro and it was responsible for creating the misleading advertisements.  Specifically, Fitness Brands allegedly created the website advertising for the Ab Circle Pro and it paid another defendant to produce the misleading infomercials that it scripted.  Fitness Brands also distributed the Ab Circle Pro for the first three months that it was on the market and it continued to update the infomercial and misleading advertisements after it sold the distribution rights to the device. 

The Reader’s Digest Association, Inc., was also named as a relief defendant because one of its subsidiaries, Direct Entertainment Media Group, Inc. (“Direct Entertainment”), contracted with Fitness Brands in March 2009 “to market and distribute the Ab Circle Pro in the United States.”  The FTC did not identify any misleading advertisements that were created by Direct Entertainment, and, in fact, the FTC complaint specifically alleges that the misleading infomercials and advertisements were created by Fitness Brands and its agents.  (There is a fleeting reference in the FTC complaint to Direct Entertainment’s “creation” of advertisements, but specific paragraphs allege that Fitness Brands and its agents created and updated the Ab Circle Pro advertisements.)  However, Direct Entertainment’s parent corporation, Reader’s Digest, will still pay ten to twenty times more than Fitness Brands to settle the FTC claims -- at least $13.8 million and up to $23.8 million, depending on the amount of refund requests that are received -- because it was “unjustly enriched” by its distribution of the product after it “reviewed and approved” the misleading advertisements.  This FTC settlement vividly illustrates how a company that profits from a misleading advertising “package” developed by another entity can still be held liable for false advertising claims where it “reviews and approves” misleading advertisements for a product it distributes. 

Jennifer Nicole Lee, the host of the infomercial, and her related corporate entities were also alleged to have misled consumers by making unsupportable claims about the Ab Circle Pro in the infomercial and repeatedly claiming that Ms. Lee lost “80 pounds” using the device without an appropriate disclosure stating that Ms. Lee’s weight loss was achieved through a combination of diet and exercise.  Even though Ms. Lee earned significant royalties from her appearance in the Ab Circle Pro advertisements, she was not required to pay any funds as part of her settlement with the FTC, but she (and her related corporate entities) must refrain from making misleading statements about the Ab Circle Pro.  Similarly, the individual and entities hired by Fitness Brands to script and produce the misleading infomercial were also not required to pay any funds as part of their settlement with the FTC, but they were ordered to refrain from making misstatements about the Ab Circle Pro in the future.

- Jonathan Coronel & Matthew Shultz

What Is the FTC “Up To”?

As reported here back in March, the FTC settled with five replacement window sellers over claims that their windows would save consumers “up to” a specified amount of energy costs (e.g., “Up to 40% FUEL SAVINGS”).  In order to make such claims in the future, the consent orders require the companies to substantiate that “all or almost all consumers are likely to receive the maximum represented savings or reduction.”  At the time, the FTC was careful to explain that the “all or almost all consumers” requirement was only fencing-in relief and should not be read as a statement as to how the FTC will interpret “up to” claims for other products and services.  A follow-up blog post from the FTC was also careful to limit the application of the “all or almost all consumers” requirement to replacement windows.

With the release of the results of a consumer perception study on “up to” claims conducted as part of the replacement windows, the FTC has clarified its position on “up to” claims for other products and services:  “[A]dvertisers using these claims should be able to substantiate that consumers are likely to achieve the maximum results promised under normal circumstances.”  What this statement doesn’t clarify is whether the advertiser has to substantiate that “all or almost all” consumers are likely to achieve the maximum results as the prior consent orders require.  An FTC Business Center blog post following the release of the report advises advertisers to carefully read the study to avoid deception.

Study participants were randomly shown three different ads with the following claims:  (1) “PROVEN TO SAVE UP TO 47% ON YOUR HEATING AND COOLING BILLS”; (2) “PROVEN TO SAVE 47% ON YOUR HEATING AND COOLING BILLS”; and (3) claim #1 with the prominent footnote disclosure, “The average Bristol Windows owners saves about 25% on heating and cooling bills.”  The report shows that 28.1% of participants shown the ad with claim #1 said that the ad stated or implied that all or almost all users can expect to save about 47% on heating and cooling bills.  The result was not statistically different for those shown ads with claim #2 or #3.  Over one-quarter (26.3%) of those shown the ad with claim #1 said that in their personal opinion all or almost all users can expect to save about 47% on heating and cooling bills.  The result was not statistically different for those shown ads with claim #2.  However, statistically fewer (13%) of those viewing the ad with claim #3 said the same thing. 

The FTC’s Policy Statement on Deception states that to be deceptive the consumer’s interpretation of the claim must be reasonable and that interpretation must be likely to mislead under the circumstances.  A claim interpretation is reasonable even if only a significant minority of consumers share it.  Thus, with 25%-30% of the study participants understanding the “up to” claim for the windows to mean that all or almost all users will achieve the maximum stated savings, under the FTC’s policy statement the advertiser should have substantiation for this interpretation prior to disseminating the ad.  The study results support the same conclusion even for “up to” claims with a disclosure of the average savings, where between 13% and 22% of participants having the same understanding despite the disclosure. 

Although the study only looked at replacement window claims, advertisers should assume that the FTC will apply its findings to other products and services.  Before making an “up to” claim, an advertiser should substantiate that all or almost all consumers are likely to achieve the maximum stated benefit.  An advertiser could use other claims, such as the average benefit consumers can expect to achieve, which would presumably be easier to substantiate.  If an advertiser believes that consumers of its product or service don’t interpret “up to” claims in the same way as the FTC’s study, it should be prepared to rebut the FTC’s study with a comparable one of its own.

- Matthew Shultz

“There’s Gold In Them Hills”: The FTC Solicits Public Comments on Its Jewelry Guidelines

The Federal Trade Commission (FTC) is seeking to polish its Jewelry Guidelines officially known as the Guides for the Jewelry, Precious Metals, and Pewter Industries (the “Guides or the “Jewelry Guidelines”). The Commission is soliciting public comments, including on potential modifications to those Guides.

Through its Jewelry Guidelines, the Commission assists marketers and other members of the jewelry industry in avoiding making claims considered “unfair” or “deceptive” under Section 5 of the FTC Act. The Guides apply to a virtual treasure trove of products, including gemstones, precious metals such as gold, silver and pewter, pearls (natural, cultured and imitation) and even watch bands detached from watches. They specify, among other things: the proper meaning of the word “diamond”; when a product can appropriately be described as “hand-made”; how a product’s gold or silver content should be marketed; and many other facets of jewelry advertising.

The FTC most recently conducted a complete review of the guidelines more than a decade ago, in 1996, and is now looking to the public to provide gems of wisdom on a variety issues. For example, the Commission questions how freshwater pearls should be described, noting that consumers formerly associated “freshwater pearls” with those that were irregularly-shaped (as opposed to round, cultured pearls). Yet, developments in the culturing process have resulted in some freshwater cultured pearls appearing similar in shape to round saltwater cultured pearls. The FTC also seeks comments on whether the Guides should direct disclosure of treatments to pearls, such as their artificial coloring.

Among other subjects, the Commission also seeks public comments on how the content of alloy products (usually mixtures of metals) that contain precious metals in amounts less than that specified in the current Guides can be described in a way that is not deceptive. For example, Section 23.4 of the current Guides states that it may be misleading to use the word “gold” to describe a product that is comprised of an alloy of gold that is less than 10 karats. Similar regulations exist for the content of silver and platinum.

The actual request for comments, which may be found here, poses 24 questions with subparts addressing these and many other issues. Those interested in commenting must file their comments electronically or by paper on or before August 27 of this year. If you prefer to file electronically, you should do so here.

- Roberta Horton

ALJ Finds POM Not So Wonderful, But Also Rules Against More Stringent FTC Substantiation Standard

A recent Initial Decision by Chief Administrative Law Judge D. Michael Chappell presents yet another mixed result for the Federal Trade Commission’s ongoing efforts to set more stringent substantiation levels for health claims.  The Initial Decision rejected the substantiation standard proffered by Complaint Counsel for the FTC, but still ruled that POM Wonderful made deceptive health claims regarding its “POM Wonderful 100% Pomegranate Juice” and POMx supplements.  The Judge found that the advertisements in question contained implied claims that the POM products would treat, prevent, or reduce the risk of heart disease, prostate cancer, and erectile dysfunction, but that there was insufficient competent and reliable scientific evidence to support those claims.

The parties agreed that substantiation of such claims required “competent and reliable scientific evidence,” but they disagreed on what that means. The FTC sought to require double-blind, randomized, placebo-controlled clinical trials (RCTs) to substantiate POM’s claims.  The Judge rejected this requirement, stating that RCTs were neither a legal requirement mandated by the FTC Act nor case law, nor appropriate in this case. Applying the so-called “Pfizer factors” to determine the appropriate level of substantiation, the judge’s analysis focused on the sixth factor: “the amount of substantiation experts in the field would agree is reasonable.”  He found that the weight of the expert testimony did not require RCTs where the product is a safe, food-derived product that is not being offered as a substitute for medical treatment. However, the Judge still concluded that “experts in the field” would agree that clinical trials were required, just not RCTs, because the claims were disease-related rather than general and highly qualified health claims. After reviewing POM’s substantiation, the Judge held that it failed to meet the “competent and reliable scientific evidence” standard.

The FTC also sought to prohibit POM from making any disease claim in the future unless the Food and Drug Administration pre-approved any such claim. The Judge rejected this requirement, stating

"no previous decision by the Commission or any court has required FDA pre-approval as the required level of substantiation for disease claims, including for purposes of a cease and desist order.”

Rather, the competent and reliable evidence standard is “established precedent, [] reasonably related to the violations found to exist, and [] sufficiently clear and precise to guide Respondents’ future advertising practices.”  As such, any FDA pre-approval requirement “would constitute unnecessary overreaching.”

As we have noted in previous posts (see here and here), the FTC’s efforts to require stronger substantiation for health claims have met some resistance by courts.  There may yet be further developments in this case as the Judge’s Initial Decision is subject to review by the full Federal Trade Commission on its own motion, or by motion of any party.

- Mac Conforti and Matthew Shultz

Skechers Pays Up for its Shape-Ups

Under a settlement agreement announced with the FTC and 44 state attorneys generals, Skechers has agreed to pay $40 million to resolve allegations that it made unfounded claims regarding the health and fitness benefits of its Shape-Up and Tone-Up shoes. Last fall, when the FTC announced a similar settlement with Reebok, maker of EasyTone and RunTone toning shoes, it warned national advertisers to “exercise some responsibility” in their message. Now, David Vladck, director of the agency’s consumer protection bureau, wants advertisers to know they must “shape up [their] substantiation or tone down [their] claims,” lest misled consumers give their wallets a workout with false hopes of an effortlessly transformed derriere. 

Citing a number of Skechers’ high profile ads, including one featuring Kim Kardashian that ran during the 2011 Super Bowl, the agency’s complaint against Skechers alleged that the market leader of the billion dollar toning shoe industry claimed its products would increase consumers’ weight loss and muscle tone and strength, and improve posture, but lacked adequate substantiation to back up these statements.  Perhaps the most salacious of allegations, that Skechers supported its claims, in part, with the results of an “independent clinical study,” conducted by the spouse of a Skechers marketing executive. The study had “numerous defects” – for instance, Shape-Ups wearers who gained weight during the study were incorrectly reported as having lost weight, and some of the study participants were employed by the executive’s spouse. Skechers is also alleged to have cherry-picked results from other studies and, in regards to its Tone-Up shoes, made claims that the shoes were “designed to help burn more calories,” without conducting any product-specific studies. 

Skechers has denied any wrongdoing, stating it settled the suit to avoid the costs and distraction of “defending multiple lawsuits in multiple courts across the country.” The settlement requires the company to refrain from making any claims regarding the health benefits of its toning shoes unless they are supported by competent and reliable scientific evidence, a requirement that varies under the agreement by claim type.  Weight loss claims must be supported by “at least two adequate and well controlled human clinical studies,” whereas strengthening claims require one such study, which must run for at least six weeks. The settlement defines “adequate and well controlled” studies as those that are randomized, blinded to the “maximum extent practicable,” and, if testing for weight-loss or fat reduction, controlled for “dietary intake.” All other health or fitness claims, including those of calorie burn or muscle tone, must be based on “tests, analyses, research or studies that have been conducted and evaluated in an objective manner by qualified persons.” 

With this suit, and several other recent settlements, the FTC has made clear that it is watching advertisers’ health and fitness-related claims, and is keen to ensure that such claims are properly supported. It is also clear -- as we have observed before -- that the agency is still intent on raising the bar as to what qualifies as competent and reliable scientific evidence by incorporating stringent requirements for the satisfaction of this standard into its settlement agreements. Advertisers in the health and fitness industries should be wary that claims of health or wellness benefits lacking strong support may have more than minor consequences.

- Joanna Persio, Angel Garganta, Trent Norris

How Many Reasonable Consumers Does it Take to Change a Light Bulb?

In a recent decision on cross-motions for summary judgment, a California federal court ruled on FTC allegations that Lights of America, Inc. (LOA) deceptively marketed its LED lamps in violation of section 5(a) of the FTC Act.  The decision was a partial win for each party, with the Court granting summary judgment to FTC on one count and to LOA on a second and part of a third.

The FTC alleged that LOA falsely claimed that its LED lamps would “replace” incandescent bulbs of a given wattage; overstated the lamps’ output in lumens; and exaggerated the lifetime of the lamps.  On the first count, the Court ruled for the Commission, rejecting a variety of LOA arguments.  LOA argued, for instance, that a reasonable consumer would understand that packaging claims such as “replaces 45 watts” meant only that the LED lamps would fit into the same sockets as a conventional bulb.  It also argued that undocumented observations by LOA’s Vice President of Sales and Marketing, as well as by Wal-Mart employees who looked at prototype products, were enough to substantiate claims of equivalent wattage.  The Court also ruled that subsequent brightness testing, even if it proved the claims true, could not serve as a defense because the tests were done after the claims were made.  Under section 5, it is a deceptive practice not to have substantiation for a claim before it is made.

The Court summarily ruled for LOA on the second count, which alleged that LOA made false or unsubstantiated statement regarding the lamps’ light output in lumens, on the grounds that LOA based these claims on documented independent testing, the reliability of which FTC did not dispute. 

On the third count, which concerned LOA’s claims that the LED lamps had a lifetime of 15,000 hours or more, the Court held that there were genuine issues of material fact — namely, whether LOA had adequate substantiation for these claims.  LOA alleged that the manufacturer of the individual LEDs used in the lamps told LOA that the estimated life of the LEDs was 30,000 hours, but there was also evidence that LOA knew that testing revealed a rapid decline in brightness after less than 1,000 hours.  Moreover, the Court held, there was a question of fact whether the incorporation of the individual LEDs into the final LED lamp product may have compromised the LED lifetime.  Finally, the meaning of “lifetime” in this context — specifically, whether the life of an LED expires when it loses half of its brightness, or when it goes out completely — was disputed.  However, the Court granted summary judgment for LOA on its claims that “you’ll never change your light bulbs again,” reasoning that this was obvious puffery, and consumers would not rely on it. 

LOA also faces a series of consumer class actions in California arising from similar facts (see here and here). 

- Katherine Ross

 

FTC Loses Again on Substantiation Issue

The FTC’s efforts to enforce consent judgments were set back again, this time by a federal district court ruling in the Southern District of Florida.  The FTC again lost on the question of whether the advertiser possessed competent and reliable scientific evidence supporting its claims.

The court rejected what it apparently saw as an overly aggressive enforcement position regarding a 2006 consent judgment with Garden of Life, Inc. and its owner.  That consent judgment prohibited disease claims unless such claims were substantiated by competent and reliable scientific evidence and prohibited the misrepresentation of any test or study.  The FTC alleged that Garden of Life (i) falsely claimed that three products did not contain soy allergens; (ii) made unsubstantiated claims about the benefits of its Ocean Kids products; (iii) made unsubstantiated claims about the superiority of two products compared to competing products; and (iv) falsely claimed that the superiority claims were supported by human clinical studies.

In support of its no soy allergens claim, Garden of Life received an allergen statement from its supplier that the raw materials used did not contain soy, confirmation from one of the supplier’s executives that allergenic ingredients were not used, and a statement from the supplier that its fermentation process consumes or destroys any residual soy.  Although the FTC’s testing found soy in the affected products, it did not provide any evidence that the soy came from the supplier’s products.  Furthermore, the product at issue was voluntarily recalled prior to the FTC’s complaint, undercutting the FTC’s claims of harm.  Based on these facts, the court held that the FTC failed to prove by clear and convincing evidence that Garden of Life lacked competent and reliable scientific evidence substantiating the no soy allergens claim.

Garden of Life made various claims about the ability of its Ocean Kids soft gels to boost or support mental and cognitive functions, mood and behavior, and eye development.  The FTC’s expert opined that these claims were not substantiated by competent and reliable scientific evidence.  Garden of Life’s expert opined that they were.  With no detailed discussion of either expert’s opinion, the court refused to find that Garden of Life violated the consent judgment based on a disagreement between experts.

The court held that the prohibition on unsubstantiated claims concerning “absolute or comparative health benefits, efficacy, [or] performance” did not cover comparisons to competing products, but only claims about the product’s health benefits or health improvements compared to not using the product.  Even if the order did cover comparisons to competing products, the court concluded that the FTC “took several statements out of context and manipulated them in an attempt to substantiate its allegation that [Garden of Life] made unsubstantiated comparisons of the Grow Bone System to other products.”

Finally, the court rejected the FTC’s allegation that Garden of Life misrepresented “‘the results and validity of clinical studies of AlgeaCal when marketing RAW Calcium and the Grow Bone System.’”  The court concluded that under the consent judgment Garden of Life was not required to conduct studies of RAW Calcium and the Grow Bone System.  Furthermore, in a strict reading of the consent judgment, the court stated that it did not require that the studies “be reliable or performed in a certain manner” -- instead, all the consent judgment requires is that the statements about the studies (e.g., that study participants consumed the ingredients in the Grow Bone System) be literally true, which they were.  Perhaps influencing these conclusions, the court went on to note that Garden of Life’s expert had opined that the RAW Calcium and the Grow Bone System claims were supported by competent and reliable scientific evidence.

The Garden of Life decision is another example of a trend we have documented here over the past couple of years:  a court disagreeing with the FTC about the quantity and quality of evidence required to satisfy the competent and reliable scientific evidence standard.  These decisions have prompted the FTC to incorporate into consent orders more specific and stringent standards for what constitutes competent and reliable scientific evidence for certain claims, such as the requirements regarding two adequate and well-controlled human clinical studies and essentially equivalent products in the Iovate and Nestle cases.  What remains to be seen is whether courts will construe the new substantiation provisions in the way that the FTC intends.  Given recent history, that is hardly a sure thing.

- Matthew Shultz, Trent Norris, & Angel Garganta

FTC to Car Dealerships: Misleading Ads Must Be “Gone in 60 Seconds”

“We will pay off your balance no matter how much you owe” is a slogan that was used by a car dealership for years until the Federal Trade Commission, last week, reached settlement agreements with five car dealerships prohibiting this type of advertising regarding paying off loans on consumers’ trade-in cars and other advertising related to financing terms.  The FTC alleged that the advertising was false and misleading, in violation of the FTC Act, the Truth in Lending Act, Regulation Z, and the Consumer Leasing Act and Regulation M by implying that when the consumer trades in a used car to purchase another car, the consumer will have no remaining obligation for any amount on the used car.  However, according to the FTC, when a used car had a loan balance that exceeded the car’s value, called negative equity, the car dealerships involved in the settlement did not pay off the balance of the loan but rather included the amount of the negative equity in the loan for the new vehicle.  For example, according to the FTC’s Consumer Alert Publication on this topic, consumers who had a loan payoff of $18,000 on a car worth $15,000 would then have the negative equity amount of $3,000 added to the loan for the new car by the car dealerships, thus increasing the amount of monthly payments for the new car or down payments.

The five dealerships, from various cities in the U.S., have entered into proposed consent agreements with the FTC (here, here, here, and here). The consent agreements prohibit them from advertising that they will pay the remaining balance on a trade-in if the consumer is still responsible for the negative equity value and from misrepresenting other facts related to leasing or financing a vehicle.  These consent agreements reflect a broader FTC initiative to identify and address consumer fraud and deceptive practices targeting people who are financially distressed, which included a series of roundtable events last year soliciting information on potential consumer protection actions concerning the sale, financing, or lease of motor vehicles.  As the FTC’s website states, “Having access to a motor vehicle is essential for many consumers to fulfill their daily obligations.  It imposes a substantial expense, however, and accordingly most consumers seek to lease or finance the purchase of a new or used car.  As the nation's consumer protection agency, the Commission is committed to protecting consumers in connection with these financial transactions.”  As we have written in the past, it is important that advertising is clear and gives full information to consumers, otherwise -- as these five recent consent agreements show -- the FTC may well act fast and furiously.

- Deborah Birnbaum & Angel Garganta

Closing the Window on Deceptive Claims

Last week, the Federal Trade Commission (FTC) touted settlements with five replacement window sellers over energy efficiency and heating and cooling cost savings claims as “part of a broad FTC effort to ensure that environmental marketing is truthful and based on solid scientific evidence.”  This is further evidence that even though the revised Green Guides have yet to be finalized, green claims are still an FTC enforcement priority because of their popularity with advertisers.

The consent orders prohibit the sellers from making any claims that consumers will achieve a specific (or up to a specific) energy or costs savings unless the seller “possesses and relies upon competent and reliable scientific evidence to substantiate that all or almost all consumers are likely to receive the maximum represented savings or reduction.”  The analyses accompanying the proposed orders explain that the “all or substantially all” standard represents “fencing-in” relief--relief that reaches beyond the conduct complained of to related conduct, which may not violate the FTC Act, to help ensure compliance with the order.  The FTC typically tries to include fencing-in relief in its consent orders.

The “all or substantially all” standard in the consent orders applies to claims that consumers will achieve savings “up to” a specified amount.  Some of the analyses accompanying the proposed orders explain that in the context of the sellers’ advertisements, “up to” did not effectively qualify the claims about what energy or cost savings consumers should expect, and that the proposed orders should not be read as a statement as to how the FTC will interpret “up to” claims for other products or services.  In other words, the FTC apparently concluded that the sellers’ advertisements represented that consumers should expect to receive the maximum specified savings.  For example, one seller ran a newspaper ad claiming “Up to 40% FUEL SAVINGS” and another ad claiming “40% Fuel Savings.”  Other marketing materials also claimed a 40% savings without the “up to” qualification.

The proposed consent orders also highlight that specificity counts when making environmental claims. The Green Guides advise that specific environmental claims are easier to substantiate and are less likely to be deceptive.  The Green Guides also caution that the basis of a comparative environmental claim needs to be clear in order to avoid confusion about what comparison is being made.  As discussed in the analyses accompanying the proposed orders, a house’s energy efficiency depends on several factors, including its geographic location, its insulation, as well as the existing windows.  Because each consumer’s circumstances are different, it could be difficult to substantiate general claims about energy or cost savings.  Thus, the consent orders allow claims of specific energy or cost savings under specified circumstances if those circumstances are clearly and prominently disclosed in close proximity to the claim.

- Matthew Shultz

UK ASA Tripping About Travel Review Website

The UK’s advertising regulator, the Advertising Standards Authority (ASA), has told travel review website TripAdvisor LLC to stop making claims that its content is honest, real and trusted amidst findings that the site may host fake reviews. The website claims that it “offers trusted advice from real travelers…More than 50 million honest travel reviews and opinions from real travelers around the world” and “Reviews you can trust”. However, several complainants challenged whether those claims can be substantiated. TripAdvisor responded to the complaints by saying that while they could not guarantee that reviews were 100% free from fraudulent content, they use fraud detection systems to identify and minimise non-genuine content; therefore the practical impact of small numbers of fraudulent reviews slipping through the net is negligible. TripAdvisor also explained that it requires reviewers to give a declaration that their review is genuine and honest and makes clear that fake reviews are both illegal and prohibited by their T&Cs.

Assessing the claims, the ASA acknowledged that TripAdvisor takes steps to monitor suspicious content and asks reviewers to declare that their review is genuine. However it found that reviews could be placed on the site without verification and that non-genuine content could appear on the site undetected. On that basis, it concluded that the claims which implied consumers could be assured that TripAdvisor reviews were honest and trusted were misleading.

Claims made by advertisers and marketers must be capable of substantiation and must not mislead consumers. While TripAdvisor had taken steps to monitor and catch fake content, it had not done enough to make out its claims that travellers’ reviews are genuine and honest.

- Richard Dickinson and Gemma Davies

After Bump in the Road, FTC Puts the Brakes on Gas Mileage Device

Although the FTC has yet to finalize the revised Green Guides over a year since the comment period ended without final action, green claims, particularly ones that stretch credulity, are still an enforcement priority.  The FTC recently settled with the marketers of the “Hydro-Assist Fuel Cell.”  The settlement brings to a close an almost three-year long litigation in the District of New Jersey over the veracity of the marketers’ claims, including that the device would “Turn Any Vehicle into a Hybrid.”  In its January 2009 complaint and TRO brief, the FTC alleged that the marketers--Dennis Lee, Dutchman Enterprises LLC, and United Community Services of America Inc. (d/b/a UCSA Dealers Group LLC)--misrepresented that the device could improve fuel economy.  The marketers claimed that the device could improve fuel mileage by 50% to 261% through a combination of mixing hydrogen produced by electrolysis with the car’s gasoline and pre-treating the gasoline so that it burned more completely.  The FTC argued that the marketers’ claims violate the laws of thermodynamics--the device has to consume more energy than it can produce. 

The court granted the TRO and set a date for a preliminary injunction hearing.  After the first preliminary injunction hearing in February 2009, the magistrate judge issued a report recommending that the preliminary injunction be denied.  The magistrate judge concluded that the FTC failed to establish that there was probable cause that the FTC Act had been violated for the following reasons:  (1) the FTC didn’t rebut the marketers’ proffered scientific evidence with specificity; (2) while the FTC’s expert was an expert in physics, he was not an expert in automotive engines; (3) the FTC’s expert had not examined or tested the device; and (4) the FTC’s expert acknowledged that adding hydrogen to gasoline could increase fuel efficiency and that a similar device being developed at MIT had potential.

In a lucky twist of fate for the FTC, the recording of the first preliminary hearing was inaudible, preventing a true transcript of the proceeding, and the court ordered a new hearing. Taking advantage of the do-over, the FTC submitted supplemental expert reports and briefing to address the magistrate judge’s concerns while maintaining that the magistrate judge had improperly interpreted the FTC’s burden.  The parties eventually entered into a stipulated preliminary injunction and ultimately a settlement agreement.

The settlement includes a $2,738,950 monetary judgment, all but $230,356 of which will be suspended upon the transfer of the assets of certain bank accounts to the FTC for consumer redress. The settlement order prohibits the defendants from marketing any product purporting to generate energy, reduce energy consumption, or improve energy efficiency. Defendants are permitted to sell their remaining stock of “Hydro-Assist Fuel Cells” as long as they don’t represent that the device generates energy, reduces energy consumption, or improves fuel efficiency and they prohibit by contract their dealers from making such claims.  Defendants are obligated to monitor their dealer’s advertising and report violations to the FTC.  With respect to other products, defendants are prohibited from making any false or misleading representations and from making representations without competent and reliable evidence.  Defendants are further prohibited from using customer information obtained in connection with the marketing and sale of the “Hydro-Assist Fuel Cell” device. 

We suspect it unlikely that the FTC will pursue vigorously cases related to claims that are new subjects of the proposed revised Green Guides until this new guidance is final.  After that time, we expect to see a flurry of enforcement activity.  In the meantime, take a hard look at any green claims and make sure they are substantiated and properly explained so consumers understand the breadth and limits to the environmental benefits your product offers.  If it looks too good to be true, know the FTC may well come knocking. 

- Matt Shultz

UK Invasion of NAD: Challenge to Photo Enhanced Cover Girl Ad

I think we can agree that photo shopping in print ads does not help boost the self esteem of women of all ages.  But is it misleading? 

The National Advertising Division brought a monitoring case against P&G's Cover Girl mascara ads featuring Taylor Swift. (This is a challenge to ad substantiation not brought by the typical competitor challenger, but by the NAD itself as part of its own review of advertising.). The ad claimed the mascara would provide 2x more volume (than bare lashes) and was 20% lighter (than the most expensive mascara). The NAD's beef was not with these claims, but with the batting eye photo of the lovely young country cross over star. NAD requested substantiation for implied claims that consumers who use the product will get lashes like those depicted in the photo and that the lashes in the photo were achieved solely by using the mascara. It is well established that claims can be modified with appropriate, clear and conspicuous disclaimers. Product demonstrations on the other hand, have been challenged as far back as Rapid Shave and Campbell’s Soup when the demonstration has been enhanced. However, in this case, P&G presumably accurately stated the product’s benefits - 2x more volume and 20% lighter. If so, does it matter then that P&G also may have enhanced what those benefits looked like on a particular individual, in this case the lovely Ms. Swift?  And should it matter that they also fessed up to it in the form of a disclosure below the photo that "lashes enhanced post production"?  We’ll never know for sure because P&G, rather than plead its case, notified the NAD that it was discontinuing the ad and claims.  However, NAD’s “decision” certainly suggests that they would have taken issue with the post production “enhancements.”

This case follows closely on the heels of a recent UK decision involving Julia Roberts in a foundation ad in which the ASA was concerned that consumers may not appreciate that the model was touched up.  The ASA case is arguably distinguishable as the photograph possibly played a much larger role in conveying the claims, but clearly now in light of both decisions photographic “enhancements” even with disclaimers are likely risky.  What is perhaps more worrisome is the NAD’s suggestion that there may have been an implied claim that women using the product will look like Ms. Swift, or at least her lashes.  If the photograph had shown Ms. Swift’s lashes at 2x their volume, as claimed, should P&G have also been tagged with the additional claim that women’s lashes will look like Ms. Swift’s rather than simply being twice whatever their initial volume may have been?  After all, a Ferrari and a Ford Taurus may both run better on high test gasoline, but they’re not starting from an equal playing field.  The NAD’s decision emphasizes the “enhancement” rather than the “results” issue so perhaps that question will be more clearly answered another day. 

In any event, as regular readers of this blog know I sometimes am guilty of oversharing, but here goes again -- I sadly bid farewell to my thick twenty-something lashes long ago, so I suspect even an unretouched Taylor would have dramatically thicker lashes with her Cover Girl mascara than I would using the same product.  I do not feel deceived, and I think at least for now I will keep my day job rather than hope for a lucrative Cover Girl career, particularly since any “post production enhancements” now seem out of the question.

- Amy Mudge

 

EU Bureaucrats Have Been Drinking Something, Not Water

The EU earlier this month banned companies that sell water from making claims that water “hydrates.”  Penalties for making such an outrageous claim can range up to two years in prison. What’s going on here you might wonder?  Is it not only the Euro that has become destabilized but also EU bureaucrats?  Apparently the thinking behind this decision is that there are certain medical conditions that can lead to dehydration. So although water can help hydrate someone who’s just engaged in vigorous physical activity or has been out in the hot sun all day, it’s not a “cure” for any disease that causes dehydration and shouldn’t be marketed as such. The EU was asked to consider this issue following an application by two German Professors, who were concerned to ensure that hydration claims wouldn’t be interpreted as meaning that water intake can reduce the risk of developing a human disease.

From the US perspective, it seems that the EU has lost sight of the basic principles that claims must be interpreted through the eyes of a reasonable consumer and in the context of an advertisement as a whole. If a company creates an advertisement showing a beach volleyball player drinking water during a break, surely no reasonable consumer will believe that the product is being marketed as a “cure” for diabetes or diarrhea or any other medical condition that causes excessive thirst or dehydration.  The claim that water helps you “hydrate” to a reasonable consumer is more likely a good reminder that they need to drink an adequate amount of fluids each day and that water can be an important and healthy choice.  Nor is there anything misleading, as some have suggested, about claiming your product helps with something if there are other products that help as well. If the EU truly intends to go down this path it has its work cut out for it. Is the slogan that Snickers is "the snack that satisfies" next -- it won’t satisfy if you’re suffering from a medical condition that causes hunger or malnutrition.  Let water be water and let’s move on to more important things.

- Randy Shaheen

UK ASA: So, You Say Got Connections?

The UK’s advertising regulator, the Advertising Standards Authority (ASA), has banned an advert run by the company Rising Models for the “VIP Model Club” on grounds that it is misleading and the claims unsubstantiated.

The advert, which was published on Rising Models’ own website, stated that the company had “connections with the most ELITE modelling agencies in the country” and invited readers to join “FOR A CHANCE TO SIGN WITH A MAJOR MODELLING AGENCY”. The ASA received one complaint which challenged whether the claim that the company had  “connections with the most ELITE modelling agencies” could be substantiated. In response, Rising Models said that they were not a modelling agency and did not claim to offer work opportunities; they merely had a list of eight contacts which they did not claim to know personally. They also pointed to their “Terms of Use” which they argued demonstrated that they were not a modelling agency. Upholding the complaint, the ASA concluded that the claims implied that some readers could find work opportunities by subscribing to the VIP Model Club, and it considered that readers would understand the claims to mean that Rising Models had working relationships with the UK’s leading modelling agencies. Although Rising Models provided eight e-mail addresses and names that seemed to refer to modelling agencies, that evidence was insufficient to demonstrate that the agencies had recent business connections with Rising Models, or indeed that they were considered, by industry standards, to be the “most elite”.

Moral:  In all instances, ensure that claims are clear and that they can be properly substantiated.

- Richard Dickinson