We are close to live blogging from the annual NAD Advertising Law Conference and for those who could not join us, we wanted to share highlights from its opening — keynote speaker FTC Chairwoman Edith Ramirez. The FTC typically uses this conference to lay out its enforcement priorities relevant to national advertisers and gives us all a peek into the crystal ball for the coming year. So here’s what we heard.
Chairwoman Ramirez said that the new normal for serious health claims will be two randomized controlled trials (or RCTs) from experts qualified in the particular field to support these types of advertising claims. Sometimes, she said, the FTC will specify in its orders how many RCTs are required and other times it will leave the issue open. (Note that in the POM case now on appeal before the DC Circuit the FTC has suggested that at least in POM’s case the 2 RCT requirement is “fencing in.”) Moreover, Chairwoman Ramirez said that, not only must advertising claims be backed by sound science, but sound science must be backed by sound data—thereby expanding what is required of advertisers with respect to data retention. She said that the FTC’s focus on the need for sound data has been impacted by their discovery in several recent matters that the data relied upon was either erroneous or even potentially fabricated. She noted several recent orders (including iHealth, link below) that have data retention requirements. Raw data, instructions for the study, protocols, and information for each of the study participants will all be fair game and Chairwoman Ramirez said that advertisers should not be surprised when FTC staff asks for this type of documentation when conducting an investigation into advertising claims.
Chairwoman Ramirez also focused on one particular type of health claim, noting that many adults are dealing with cognitive concerns with respect to both aging parents and young children and so are particularly vulnerable to misleading claims. Advertising claims that touch on consumer’s hopes (like enhancing a child’s ability to learn, for example—citing Your Baby Can Read) or fears (like aging, weight loss, etc.—citing, for example, iHealth) will certainly receive scrutiny from the FTC.
Chairwoman Ramirez also stated that inadequate disclosures will be another focus of the FTC this year. Chairwoman Ramirez reiterated the standard for advertising disclosures — that they must be clear, unambiguous and standout. In other words, consumers should not have to look for the disclosure.
Chairwoman Ramirez then commented on the FTC’s press release last week on warning letters that the Commission has sent out on disclosures, named “Operation Full Disclosure.” During Operation Full Disclosure, the FTC reviewed more than 1,000 advertisements and sent warning letters to 60 companies including 20 of the largest advertisers in the United States. The warning letters raised concerns about disclosures in various television and print advertisements. For more details on this see our blog here.
Other Areas of Interest
In addition to the above, Chairwoman Ramirez announced two other areas where the FTC will be looking for enforcement actions this year. The first is advertising that uses celebrity hype to push products. The cited example was products that have jumped on the Dr. Oz bandwagon. Chairwoman Ramirez said that two cases have been brought against companies for creating fake news websites and flogs that touted the fact that Dr. Oz featured the green coffee bean on his show. Chairwoman Ramirez again reminded the audience that good science and good data must support advertising claims.
The second additional focus is native advertising. Chairwoman Ramirez stated that native advertising has the potential to mislead consumers because consumers believe that the information comes from an unbiased source. Chairwoman Ramirez highlighted the Blurred Lines: Advertising or Content? workshop that took place earlier this year and said that the FTC is still working through the comments received at the conference. Chairwoman Ramirez said that the FTC is hoping to provide further guidance on native advertising within the next year.
Finally, because this is afterall a conference on self-regulation the Chairwoman took a few moments to tout the benefits of self-regulatory programs and noted that since the NAD conference last year the FTC had received 14 referrals from various self-regulatory bodies and took each of those referrals seriously.