In a town not particularly well-known for its nonpartisanship or collegiality, we have always thought the FTC stood (and stands) out for its remarkable ability to typically operate in a consensus-like manner. However, a clear split appears to be emerging at the Commission over the application of the “competent and reliable” scientific evidence standard.
It’s no secret that the FTC has been imposing more specific definitions of “competent and reliable” scientific evidence via some of its orders in recent years. Typically this has meant a requirement for two well-conducted, placebo-controlled studies on the product or an essentially equivalent product for certain types of health claims for foods or dietary supplements (“RCTs”). The claims at issue are also usually specifically spelled out, for example, weight loss or reduced risk of cold or flu.
However, a recent settlement with GeneLink and foru International drew a dissent from Commissioner Ohlhausen and a “statement” by Commissioner Wright that indicate some continuing disagreement among the Commissioners over how far to go with this new definition. The advertisements in question involved dietary supplements that were specially matched to a customer’s DNA to provide individualized health benefits. The proposed consent order incorporates the now not so new definition of “competent and reliable” scientific evidence (e.g., 2 RCTs) for products that are customized to a person’s DNA and are intended for the “diagnosis, cure, mitigation, treatment or prevention of any disease.”
Commissioner Ohlhausen’s dissent focused on her belief that when it comes to health or disease-related claims for products that are otherwise safe (such as foods), consumers may be better off if the Commission imposed a more flexible substantiation requirement rather than imposing a 2 RCT standard. Her concern is perhaps best summed up in this statement: “If we demand too high a level of substantiation in pursuit of certainty, we risk losing the benefits to consumers of having access to information about emerging areas of science and the corresponding pressure on firms to compete on the health features of their products.” She also notes that her concern is magnified by the fact that in the POM Wonderful decision the Commission suggested that claims concerning the continuing healthy functioning of the body can be implied disease-related claims.
Commissioner Ohlhausen also took issue with the requirements within the 2 RCT standard that the studies must always be conducted by independent researchers and must be on the product itself or an essentially equivalent product. Both requirements, she argues, impose unnecessary costs and burdens on consumer products companies.
Chairwoman Ramirez and Commissioner Brill vigorously defended the settlement. They noted that the 2 RCT provision is limited to products that are advertised as having some form of genetic customization and that evidence from experts in this field supported this requirement. And, touching on another controversial issue, they also noted that the 2 RCT requirement was “fencing in” and not necessarily an indication that all other advertisers not under an FTC Order must also have 2 RCTs for such claims (although they cautioned that other advertisers should view this as a sign that “hard science” is required to support such claims). The Commission took a similar position in POM Wonderful, from which Commissioner Ohlhausen also dissented. While courts have traditionally permitted the FTC to fence companies in with respect to order coverage, concerns have been raised as to whether the First Amendment permits the Commission as part of its fencing-in authority to require companies to have a higher burden of proof before they can disseminate claims in the marketplace than similarly situated competitors not under an FTC order.
Finally, Commissioner Wright wrote a separate statement in which he noted the tradeoff between deterring deception and preserving the benefits to competition and consumers from truthful claims. He encouraged his fellow commissioners to “explore more fully whether the articulation and scope of injunctive relief in these and similar settlements strikes the right balance between deterring deceptive advertising and preserving for consumers the benefits of truthful claims.”
Many, if not all, of these issues may be addressed by the DC Circuit in POM Wonderful’s appeal of the Commission’s decision in that case. In the meantime, the debate rages on at the FTC. Here’s a video from the FTC’s cafeteria smuggled out by an anonymous whistleblower.