The long running saga of the FTC versus POM Wonderful took a major turn today as the D.C. Circuit affirmed in part and reversed in part the FTC’s Order that POM had made deceptive claims about its pomegranate juice products.   In 2010, the FTC sued POM alleging it had made false and unsubstantiated claims about the ability of its product to prevent or ameliorate heart disease, prostate cancer and erectile dysfunction.  After an extended trial, the FTC’s Administrative Law Judge largely found for the FTC (not a huge surprise).  The FTC Commissioners largely affirmed that decision (another shocker).  However, Commissioner Ohlhausen, in what would turn out to be an ominous foreshadowing for the Commission as a whole (jump to the end of the blog if you can’t stand the suspense), and who wrote the Commission’s opinion,  disagreed with the majority’s view that two Randomly Controlled Clinical Trials (RCTs) should be required as part of the order. POM appealed to the DC Circuit challenging the factual and legal bases on which the FTC relied as well as the remedy imposed.  The DC Circuit affirmed on liability, but modified that part of the FTC’s order that required POM to have two RCTs to substantiate any disease claims going forward.  The revised order will require only one RCT for any disease claims.

The DC Circuit found that there was no basis for setting aside the FTC’s finding of what efficacy and establishment claims POM had made in its advertising, noting the careful record the ALJ had made and the thorough treatment the Commission had given the issues in its opinion.  The DC Circuit agreed with the FTC that the use of words such as “promising,” or “initial”  to describe certain studies referenced in POM’s advertising failed to adequately qualify the ad so that an establishment claim was not made. Regarding the level of substantiation necessary, the court noted the FTC’s special expertise in this area.  The court noted that its role was not to independently weigh the evidence but to determine whether there was substantial evidence to support the FTC’s findings.  The court decided there was.  The FTC had found that RCTs were necessary to substantiate the disease claims made.   The court found adequate evidence to support that finding noting that the controlled, random and double blind aspects of an RCT all serve important functions in evaluating the efficacy of a product or treatment. POM argued that applying the RCT standard to food products was too onerous and expensive.  The court agreed with the FTC that although there might be certain instances where it was not possible to conduct double-blind studies of food products, this was not such a situation.  Among other things, the court pointed to the fact that POM had done some RCTs on its products.  Regarding cost, the court displayed no sympathy for the marketer’s plight finding that if the claim was too expensive to substantiate then the claim should not be made.  Significantly, the court noted that marketers could make lesser health claims without an RCT including claims that accurately reflect the type and results of the science supporting a claim.Continue Reading The Saga of the Forbidden Fruit Part III

A free trial of a weight loss pill is the best of both worlds, right?  Not according to the FTC, which recently brought its first Restore Online Shoppers’ Confidence Act (ROSCA) case against a group of marketers who advertised exactly that.

Weight loss substantiation is old territory for the Commission.  ROSCA, however, is not.  The FTC’s first ROSCA case, filed in Nevada district court, alleges that health companies made unsubstantiated claims that their dietary supplements would lead to weight loss, muscle building, virility, and improved skin.  More significantly, however, are the allegations surrounding the marketers’ “free trial” and “buy-one-get-one free” offers.  According to the FTC, the companies collected customers’ debit and credit card information in order to enroll customers in a negative option (subscription) program.  While there is certainly nothing wrong with subscription programs on their face, the FTC alleges that the companies here inadequately disclosed the nature of the program – they never clearly told customers their accounts would be charged each month.  ROSCA prohibits marketers from charging customers in an Internet transaction unless the marketer has clearly disclosed all of the material terms of the transaction and obtained customers’ express informed consent. In this case, according to the FTC, the marketers did not provide the required disclosures for a negative-option program before accepting payment; failed to disclose material facts about their refund and cancellation policy, among other facts; and didn’t give customers a simple, effective way to stop the automatic charges.Continue Reading FTC Says Companies Have a Fat Chance of Getting Away With Deceptive Online Marketing in First ROSCA Case

It is almost football season and the FTC tries to stay seasonal; around this time in 2012, it announced a settlement with football mouthguard manufacturer Brain-Pad regarding unsubstantiated concussion prevention claims.  Subsequently, the FTC has sent warning letters to other manufacturers of sporting equipment regarding concussion prevention claims.  This year, however, the FTC has called a different play.  On August 21, the FTC announced that it had sent warning letters to five major retailers regarding the FTC’s concerns regarding concussion protection claims for athletic mouthguards made on the retailers’ websites.  These retailers appear to have been repeating claims that the manufacturers of the products made on their packaging. 
Continue Reading FTC’s Letters to Retailers Regarding Concussion-Related Products Has Us Scratching Our Heads

LOrealWho doesn’t want young-acting skin?  We’re not talking about the way skin acted in the zits-on-picture-day years, but rather the dewy glow of innocence – the Code of Youth.

L’Oréal USA, Inc. addressed our anti-aging desires in a popular line of ads for Lancôme Génifique and L’Oréal Paris Youth Code skincare products.  But this week the company settled with the FTC on deceptive advertising grounds.  According to the complaint, L’Oréal made false and unsubstantiated claims about Génifique and Youth Code, overstating the products’ anti-aging benefits which allegedly involved targeting users’ genes and stimulating the production of youth proteins.

Specifically, one of the ads at issue claimed that Génifique products were “clinically proven” to boost genes’ activity and stimulate the production of youth proteins that would cause “visibly younger skin in just 7 days,” and would provide results to specific percentages of users.

In a related vein, ads for L’Oréal Paris Youth Code heralded  the “new era of skincare: gene science” and told consumers that they could “crack the code to younger acting skin.”

Sign us up for that era. 
Continue Reading FTC Tells L’Oréal that Youth Code Is Not Cracked

FiveFingers running shoesBuilding buzz around your product is usually a good thing. But creating a product out of buzz not necessarily so. Vibram USA Inc., a company promoting their FiveFingers minimalist or barefoot running shoes, recently found this out the hard way thanks to some class action lawyers.

Barefoot running has long had its advocates, dating back to at least 1960 when Abebe Bikila, an Ethiopian runner, won the Olympic marathon running barefoot (turbo-powered shoes would be my footwear of choice). A recent popular book helped stoke the flames for minimalist shoes.  So perhaps it was only a matter of time before someone tried to commercialize the idea.  Of course, it’s hard to commercialize literally running barefoot so “minimalist shoes,” including a shoe with toes, that were the subject of this case, were designed as the next best thing.

Vibram in its marketing touted numerous health and injury-prevention benefits.  And the shoes were a commercial success.

However, the complaint in the case alleged several difficulties.  First, there were allegedly no studies on the shoes themselves.  Instead, Vibram allegedly largely relied upon anecdotal evidence and inferences as to how running barefoot might be beneficial. 
Continue Reading Running Shoe Manufacture, Vibram USA Inc., Finds Itself Bare of Substantiation