We reported a few weeks ago about a new warning from FDA related to the safety of certain teething-related, non-prescription homeopathic drug products, and in that post we mentioned that both FDA and the Federal Trade Commission (FTC) held public workshops in 2015 to gather information about this uniquely-regulated class of consumer products.  Today, FTC released an Enforcement Policy Statement on Marketing Claims for OTC Homeopathic Drugs  (available here); a Staff Report on the discussions held during the September 2015 workshop (available here); and an FTC blog post summarizing these actions.

For readers who are not familiar with homeopathy, the practice dates back to the 1700s and posits that disease symptoms can be treated by tiny doses of substances that produce similar symptoms if given in larger doses to healthy people (“like cures like”).  Accordingly, modern-day homeopathic remedies that we find ubiquitously in drug stores today are highly diluted formulations, which some people consider to be no more effective than placebo.  The FTC Staff Report provides an excellent overview of how this OTC industry has grown over the past 50 years and the viewpoints presented by both supporters and skeptics of homeopathy.

 The upshot to the new FTC Enforcement Policy is this:
 “No convincing reasons have been advanced either in the comments or the workshop as to why efficacy and safety claims for OTC homeopathic drugs should not be held to the same truth-in-advertising standards as other products claiming health benefits.”

Continue Reading FTC Issues Long-Awaited Enforcement Policy on OTC Homeopathic Drugs

The potential pitfalls of native advertising were on display this month at the Federal Trade Commission (FTC). The agency reported that national retailer Lord & Taylor settled with it on charges that the company improperly paid for native advertisements. Lord & Taylor allegedly did not disclose that an article in the online publication Nylon, as well as a Nylon Instagram post, were paid promotions for one of the company’s clothing collections. In addition, the company allegedly gave fashion “influencers” dresses and then paid them to post photos wearing them on social media. The company’s contracts with the influencers obligated them to use the “@lordandtaylor” Instagram user designation and hashtag “#DesignLab” in the captions of their photos. The FTC charged that Lord & Taylor did not require the influencers to disclose that they were compensated by the company (none did).

The FTC unanimously voted to issue a complaint and approve a proposed consent agreement. The agreement:

Continue Reading National Retailer Settles FTC Native Advertising Complaint

FTC Full Disclosure AdvertisementsIn this blog we often discuss products being subjected to a lawsuit based on allegations that a label is false or misleading under California’s consumer protection laws.  The Federal Trade Commission is similarly concerned with the prevention of false and misleading claims, but its focus is also on the product’s advertising, not just its labeling.

Recently, FTC sent warning letters to more than 60 companies – including 20 of the 100 largest advertisers in the country – saying that the companies failed to make adequate disclosures.  The initiative, called Operation Full Disclosure, was brought after the agency reviewed national television and print advertisements.

The inadequate disclosures fell into different categories – from not adequately disclosing the conditions for obtaining a stated price (such as an automatic billing feature or the need to buy an additional product or service), to claiming that a product was unique or superior but not disclosing the narrow definition applied or the basis of the comparison.  Other ads made absolute statements but did not adequately disclose exceptions or limitations, did not adequately disclose issues related to the safety or legality of a product or service, or did not disclose material alterations to a product demonstration.

If you received such a letter, or if you want to review your advertising to make sure it is in compliance with FTC’s standards, you can follow its performance standard of “Clear and Conspicuous” disclosures.  That is, a disclosure is clear and conspicuous if consumers notice it, read it, and understand it.  Instead of dictating the specifics of font size, etc., FTC advises companies to focus on “The 4 Ps”:

Continue Reading Operation Full Disclosure! FTC’s Frontal Assault on Ads