The FTC announced a final settlement with the marketer of Four Loko Malt beverage on Tuesday. Four Loko allegedly falsely claimed that a 23.5 ounce can contained alcohol equivalent to drinking two 12 ounce beers when in fact it’s more like 4 or 5 beers, or enough alcohol to intoxicate an elephant.
The final order was modified in several respects as a result of the over 250 comments the FTC received. Now not all FTC settlements receive comments. Settlements filed in federal court do not have a comment period (except from the judge, of course) while administrative orders do have a public comment period (thanks to provisions in the Administrative Procedures Act which one of us would have paid more attention to in law school if we’d known that Professor Stephen Breyer would become Justice Breyer).
The final order incorporated two changes. First, all relevant beverages containing two servings of alcohol must include disclosures rather than just those containing two and a half serving. Second, the order now requires a back of can “Alcohol Facts” panel. Commentators, however, were less successful in persuading the FTC to ban the product or otherwise restrict its alcohol content for which the FTC said it lacked the necessary jurisdiction.
The FTC also embraced the commenters, sending out a letter explaining why it accepted or rejected various comments, and thanking commenters noting that their input was helpful to the agency’s analysis.
The success of these comments in having an order modified and the welcome mat that the Commission has laid out for commenters (including the ability to file comments online) may lead to more and more comments on future proposed administrative orders, leaving companies settling with the FTC with one more thing to worry about.