The bottom line, Cleland said, is that manufacturers and by extension retailers must be ready to back up any claim made on the efficacy of a product with competent and reliable scientific evidence.
On what Cleland called his “risk-o-meter” were:
- Highly exaggerated claims
- Claims for treatment of opiate addiction or withdrawal
- Claims relating to pain management or cognitive decline
- Weight loss claims
- Risk-free offers
- Negative options
- Affiliate marketing
- Product reviews
- Consumer endorsements
- Infomercials (TV or radio)
For health, safety, or efficacy claims, the FTC has generally required that advertisers possess ‘‘competent and reliable scientific evidence,’’ defined as ‘‘tests, analyses, research, or studies that have been conducted and evaluated in an objective manner by qualified persons and [that] are generally accepted in the profession to yield accurate and reliable results.
“ In general, for health benefit claims, particularly claims that a product can treat or prevent a disease or its symptoms, the substantiation required has been well-designed human clinical testing.”
The industry became concerned about substantiating advertised claims after FTC filed suit against the Bayer Corp in 2015 for advertising claims on its colon health dietary supplement products. The U.S. District Court of N.J. ruled to not hold Bayer Corp. in contempt after the FTC cited it for failing to conduct two randomized, placebo-controlled, clinical trials (RCTs). Imposing a rule of two RCTs, a pharmaceutical requirement, would create an incredible burden on the industry which is not regulated in the same way pharmaceuticals are because they do not make claims to cure or treat diseases, but structure/function claims which are limited in scope.
While the case ended in Bayer’s favor, the action taken against the company sent a chill through the industry and while having a strong eye on the U.S. Food and Drug Administration which regulated label claims, not feels it must also be careful of FTC. Cleland walked through a number of more recent cases, giving attendees insight into what is expected of them and how to approach advertising. This extends to media companies and even retailers who are sources of recommendation for consumers and therefore can be held responsible for undue claims.
In a summary judgment on Aug. 15, 2016, against Coorga Nutraceuticals, which claimed its Grey Defense could stop, reverse, and prevent natural graying of human hair, and is scientifically proven to do so, the courts accepted the opinion of the FTC expert that experts in the field would require at least one well-designed and double-blinded RCT.
Another summary judgment on Nov. 2, 2016, against NAB Advertising involved weight loss claims for a green coffee extract. The FTC’s expert opined that a competent and reliable study requires placebo control, double blinding, intent-to-treat analysis, drop-out tracking, human subjects of the same characteristics as the target audience, and the same ingredients and dose as the product making the efficacy claim. The court noted the Dietary Supplement Health and Education Act imposed no duty on the FTC.
In a separate presentation, Kathleen Dunnigan, senior staff attorney for the National Advertising Division of the Advertising Self Regulatory Council said social media influencers and bloggers must disclose if they receive product. Consumers who are paid to solicit an endorsement are required to make the disclosure, but not if they are paid afterward. Celebrities, meanwhile, must make a disclosure for out-of-context endorsements.
No endorsement would be required, however, for a celebrity wearing branded clothing.
On April 19, FTC issued more than 90 letters reminding influencers and marketers that influencers should clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media. Special care must be taken that this notice appear “above the fold” on Instagram and other social platforms where the entire message might not be viewable without clicking.
In addition, Dunnigan said, it’s OK to repost consumer opinions if all opinions are posted without editing. The advertiser is responsible for all messages reasonably conveyed by its social media page and must separate opinion from test results.
This information is of relevance to retailers since the marketing claims can extend to sellers as well as manufacturers.