According to the complaint, the defendants engaged in deceptive labeling practices by marketing the food as “natural” and containing “no artificial preservatives.” The ingredients at the center of the lawsuit are synthetic versions of vitamins B, C and K, as well as caramel color. Although not proven to be harmful, and present in animal and human foods, the ingredients are technically not “natural.”

The FDA regulates animal feed, including dog food. Although it has not defined the term “natural,” in human food labeling, the FDA considers “‘natural’ to mean that nothing artificial or synthetic (including all color additives regardless of source)” has been included or added to a food that “would not normally be expected to be in that food.” Further, according to an FTC publication, if companies market their products as “all natural” or “100% natural,” consumers have a right to believe they do not contain any artificial ingredients.

There has been much litigation in the last few years regarding use of the word “natural;” so much so that at the end of 2015, the FDA put out a call for comments on how to define the term. It received over 7000 responses! This probe by the FDA has had the effect of halting some, but not all, litigation. In fact, the judge presiding over a California class action lawsuit against Kraft Foods for using the term “natural cheese” to describe cheese containing artificial coloring, stated that FDA standards were not determinative of whether Kraft violated the relevant California laws; but rather, the issue is whether a reasonable consumer is likely to be deceived by the product’s packaging. The case is still pending.

These “natural” cases will be interesting to track, and it is not far-fetched to believe that if a definition is established by the FDA, the FTC and FDA may start barking up the trees of other companies engaged in similarly deceptive or misleading labeling practices.

Stay out of the dog house and treat yourself to a consultation with an attorney regarding product packaging.

Ohlhausen will be bringing a new focus to the FTC; specifically, an emphasis on pursuing claims based on actual consumer harm, not just whether a regulatory violation occurred. For example, on a recent $2.2M settlement with Vizio regarding the software in its T.V.s that tracked viewing activity of 11 million consumers without their knowledge, Ohlhausen agreed that although Vizio’s actions were deceptive, she seemed to oppose the notion that television viewing activity constitutes sensitive information. Ohlhausen also stated that the FTC needs to reexamine how it defines “substantial injury” to consumers and focus on the misuse of historically sensitive private consumer information, including health and financial information, information on children and social security numbers.

Not wasting anytime in this regard, Ohlhausen just announced that Jessica Rich, Director of the Bureau of Consumer Protection, is leaving the agency on February 17 and is being replaced by Thomas Pahl. During Rich’s tenure, the FTC brought numerous actions against businesses that resulted in billions of dollars being returned to consumers. These awards may soon be a thing of the past as Pahl, like Ohlhausen, supports deregulation.

While deceptive marketing practices will still be on the FTC’s radar, the good news for marketers is that Ohlhausen is not a proponent of how cavalierly investigations have been initiated; nor does she believe in the total disgorgement of profits of companies found to be in violation of (some) consumer protection laws.

Ohlhausen is just the interim chair, but it is rumored that Trump has a couple of like-minded candidates for the permanent position, including Sean Reyes, a former attorney general of Utah. Dietary supplements are the largest industry in Utah (worth over $7B annually). If selected, Reyes could be much welcome news for nutraceutical marketers. In fact, Utah Senator Orrin Hatch helped draft the 1994 Dietary Supplement Health and Education Act which regulates product claims, labeling, etc., and he is a strong supporter of the industry.

Regardless of who is chosen to permanently chair, recent moves should be encouraging to most product marketers and nutraceutical producers alike, though they may be less protective of consumer interests.

For questions or more information regarding the above content, email DLG@DigitalLawGroup.com

Some businesses involved in the “Pure Green Coffee” scheme have reached multimillion dollar settlements with the FTC after making false claims regarding the effectiveness of the product.  The defendants marketed the dietary supplement using fake news sites, footage from The Dr. Oz Show, supposed consumer endorsements, and “clinical proof” that dieters could quickly lose weight without diet and exercise.

Additionally, the FTC recently sent out warning letters to 20 unnamed sellers and marketers of weight loss supplements.  The letters warn that Commission staff has reviewed their weight-loss claims and that they could be misleading. They also detail what type of scientific evidence the FTC says is needed before making weight-loss claims and using consumer testimonials.  Despite the warning, if the products are making money, some of the letter recipients may ignore the warning.

While some companies can afford to lay it on thick when it comes to their product claims, others cannot risk an FTC investigation and potential monetary judgments against them.  If you are selling a nutraceutical, we recommend doing your research before you blur the line between clever and deceptive advertising.

Digital Law Group has experience in reviewing product claims as well as representing companies in governmental investigations.

Please Email us if you have any questions or concerns regarding the content above.

Although many companies make an effort to play by the rules, some have no reason to.  Selling for up to $80.00 each, Wacoal likely still came out on top financially; despite the fines.  However, this is not the case for all.  Some companies cannot afford the risk of walking the fine line between clever and deceptive advertising.  So what do you do?  We advise that you keep your potential enemy close – when in doubt, get an advisory opinion from the FTC.

The FTC provides opinions to companies and industry organizations on a vast array of issues, including product claims.  Although they are only “advisory,” and not binding on the FTC, the opinions provide insight as to whether your proposed practices or claims may lead to consumer complaints and an FTC investigation down the road.  The bottom line is, it could save you a lot of money in the end to ask for a little guidance in the beginning.

The FTC attorneys only consider the facts presented to them in your inquiry.  This means that it is critical to include all of the relevant rules and regulations, as well as all of the facts.  Digital Law Group can help you determine what issues to present to the FTC, draft your inquiry letter and evaluate the issued opinion.