The California Food, Drug, and Medical Device Task Force announced a settlement this week with Goop, the lifestyle brand founded by Gwyneth Paltrow, which we’ve written about here and here. The complaint alleges that Goop made false and misleading representations regarding the effects or attributes of three products—the Jade Egg, Rose Quartz Egg, and
The FTC recently finalized updates to its Guides for the Jewelry, Precious Metals, and Pewter Industries, which provide the FTC’s interpretation of the jewelry marketing rules found in 16 C.F.R. §23. The FTC hosted a roundtable in 2013, which we wrote about here, and considered stakeholder comments prior to finalizing the new Guides. The updated Guides address a number of topics, including the surface application of precious metals, below-threshold previous metal alloys, gemstone products, and “cultured” diamonds.
Some highlights of the changes include advising that jewelry marketers may:
- Qualify if a coated product only has a service layer of a precious metal;
- Advertise a product’s precious metal coating to assure reasonable durability;
- Disclose the purity of coatings made with precious metal alloys;
- Qualify a product’s gold karat fineness or a parts per thousand (PPT) designation for silver products that have less than 925 PPT;
- Use alternative words and phrases for man-made stones (where it shares the same properties as the named stone) if they clearly and conspicuously convey that the product is not a mined stone.
Having now turned the page to the back half of 2018, we took a look at how the FTC’s “Made in USA” enforcement is stacking up to prior years. As we previously posted, the FTC made known its intent to prioritize “Made in USA” enforcement in remarks delivered at last fall’s NAD Conference. Year to date, the FTC has settled two cases (Bollman Hat Company and Nectar Brand LLC) and has issued 15 closing letters regarding “Made in USA” claims.
By comparison, there were two settlements and 22 closing letters in 2017. If the current pace continues, the number of closing letters may exceed prior years.
What can we learn from these cases?
- Qualified Claims Must Still Be Substantiated: Most closing letters involve unqualified “Made in USA” claims. However, qualified claims and those involving terms open to interpretation can still be the subject of scrutiny and must still be properly substantiated. Nectar Brands allegedly claimed in promotional materials that its mattresses were “Designed and Assembled in USA,” but the FTC’s complaint alleges that the mattresses were wholly imported from China, with no assembly taking place in the United States. “Crafted in America” was also among the claims that saw enforcement as was “Built in USA.”
- Watch For Disclosure Issues: In addition to labeling wholly imported products as “Made in USA,” the FTC alleged that Bollman Hat Company and its subsidiary licensed the “American Made Matters” seal to any company that claimed it had a United States-based manufacturing factory or one product with a U.S.-origin label, and met several membership requirements, including self-certifying that at least 50% of the cost of at least one of their products was incurred in the United States, with final assembly or transformation in the U.S., and payment of an annual licensing fee of $99. The settlement requires the respondents to engage an independent auditor regarding use of the seal or to clearly and conspicuously disclose that products and services may display the seal based on self-certification.
A federal jury in Illinois recently awarded Dyson, Inc. over $16 million in damages after finding that SharkNinja falsely advertised that its Rotator Powered Lift-Away vacuum was better than Dyson’s best-performing vacuum, the DC65. SharkNinja ran ads that claimed that independent testing showed that the Rotator Powered Lift Away vacuum was proven to have “more …
Those of us who spend our days at the intersection of law and advertising of health products generally accept that the prescription drug world is a universe unto itself, overseen by the FDA pursuant to the Prescription Drug Marketing Act. As prescription drug companies have increased their direct-to-consumer outreach through social media, native advertising, and health information platforms, questions have arisen as to the role that the NAD might play in regulating these advertisements. For those who are unfamiliar, the NAD is the National Advertising Division of the Better Business Bureau. It is an industry self-regulatory body that is charged with hearing and rendering decisions in advertising disputes, typically among competitors. It is commonly used amongst advertisers of consumer-directed products and services. It is not commonly used amongst prescription drug advertisers and, until recently, many likely assumed that NAD did not have jurisdiction to hear prescription drug advertising challenges.
A relatively recent NAD decision makes clear that that body believes that it has jurisdiction over prescription product advertising, however. Late last year, the NAD evaluated advertising by Synergy Pharmaceuticals for its Trulance product, which is prescribed for chronic idiopathic constipation. Allergan, maker of a competing product, challenged the advertising on the basis that it included false implied superiority claims, expressly false superiority claims, and undisclosed native advertising in the form of a waiting room pamphlet that allegedly was positioned as independent and impartial patient education material. …
Earlier this month, the Securities and Exchange Commission (SEC) issued a warning to celebrities and social influencers who use social media to encourage consumers to invest and/or purchase stocks. Recent celebrity endorsements for investment in Initial Coin Offerings (ICOs) were highlighted as examples in the SEC’s warning. In the future, if celebrities and social influencers…
Social media influencers help drive consumer engagement with the brands they love. Better reviews, more “likes,” and thousands of re-tweets can all add up to a bigger bottom line and greater insight into what sells and what doesn’t. When the line between advertising and objective content isn’t made clear, though, it can also prompt legal…
In a keynote address at the National Advertising Division conference earlier this month, Mary Engle, Associate Director in the Advertising Practices Division of the FTC, included “Made in USA” as among the agency’s current enforcement priorities. The FTC’s interest in U.S. origin claims is nothing new, but these claims have garnered considerable regulatory attention in…
On June 28, the FTC and National Highway Traffic Safety Administration (NHTSA) brought together a variety of stakeholders including regulators, automakers, software companies, and consumer groups to discuss connected cars, including current innovations and challenges in the field of data privacy. Acting FTC Chairwoman Maureen Ohlhausen opened the day by asserting that regulators will need…
As part of the FTC’s ongoing review of the needs, costs, and benefits of regulations, the agency recently announced it is reviewing the following rules:
- The Picture Tube Rule requires manufacturers to base screen size measurements on the horizontal measure of the viewable area, unless the alternative method of measurement is clearly disclosed. This rule