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Is Your Advertising and Marketing Substantiated?

By: Ted Banks

Every company wants to advertise that its products are better than the competition, providing benefits that will convince consumers to buy. Food companies almost always want to promote their products as having health benefits. Sometimes companies will seize upon some slender thread of evidence to make grand claims for the benefits of its products. But without substantiation, those claims may go too far and result in legal liability for the company.

This appears to be what happened to POM Wonderful.   It claimed that its products, based on pomegranates, could fight heart disease, prostate cancer and erectile dysfunction. But the FTC was suspicious, and found that these claims were not adequately backed by research. POM did not like that result, and appealed to a federal appeals court, where it was rebuffed again. The court ruled that it saw no basis to set aside the findings of the FTC that the ads were deceptive and misleading. POM Wonderful LLC v. FTC, No. 13-1060, (D.C. Cir. Jan. 29, 2015).

Pomegranates, according to POM, were an “antioxidant superpower,” able to protect against heart and prostate problems, while also providing some of the same benefits as Viagra. According to the FTC, these claims were evidence that POM “routinely distorted the scientific record and omitted the negative results” of its studies, and that “POM had not substantiated any of its disease claims with positive results from even one well-controlled clinical trial.”

POM’s response to these allegations was interesting. It argued that its claims were only “potentially misleading” and that the FTC was required to give 1st Amendment protection to ads that did not actually mislead any consumers, and were based on accurate and verifiable information.

But the FTC found POM’s claims to be deceptive, and required the company not to make any claim that its products were effective in treating, curing or preventing any disease “unless the claim is supported by two randomized, well-controlled, human clinical trials.”

The Court of Appeals panel affirmed the FTC’s findings, but did rule that the requirement of two clinical trials was excessive and would impose excessive costs. In its view, a single, large, well-designed clinical trial would be sufficient to substantiate claims.

The case follows traditional advertising law that requires specific product claims to be substantiated. This should be a basic part of your advertising compliance program. It is one thing for a company to make very general, “puffing” claims about a product (“tastes great”), but where specific claims are made (“preferred by consumers 2-1 over the competition”), there should be pre-existing substantiation for the claim before the ad is run. There is particularly close scrutiny where the claim relates to treating, preventing or curing a disease, which gets into the realm of drug regulation by the FDA.

The 1st amendment does provide some protection for commercial speech, but, notwithstanding POM’s arguments to the Court of Appeals, there is no free speech protection for deceptive statements.

If you are a consumer, be skeptical of claims that sound too good to be true – because they probably are not. If you are an advertiser, be prepared to stand behind any claims you make for your product.

If you or anyone in your company has questions regarding Compliance, Regulations or Substantiated Advertising and Marketing please contact Compliance & Competition Consultants today at 847-431-8207.