The U.S. Federal Trade Commission (FTC) has issued warning letters to 28 unnamed companies that allegedly represent themselves as participants in the Asia-Pacific Economic Cooperative (APEC) Cross Border Privacy Rules system despite failing to meet the requirements underlying that claim. According to FTC, certification is granted based on the following data privacy principles: (i) preventing harm, (ii) notice, (iii) collection limitation, (iv) use choice, (v) integrity, (vi) security safeguards, (vii) access and correction, and (viii) accountability. The FTC warning letters instructed the companies to remove the APEC certification claims from their websites and notify the agency of completion or provide documentation supporting the claims. See FTC Press Release, July 14, 2016. Issue 611
Category Archives Federal Trade Commission
The U.S. Supreme Court has denied certiorari in a Federal Trade Commission (FTC) lawsuit against POM Wonderful LLC and Roll Global LLC alleging the companies made false or misleading health claims about their pomegranate-derived products. POM Wonderful LLC v. FTC, No. 15-525 (U.S., certiorari denied May 2, 2016). The U.S. Court of Appeals for the District of Columbia previously upheld a Commission decision finding POM misled consumers by claiming its products treat, prevent or reduce the risk of heart disease and prostate cancer, with some claims purported to be supported by clinical studies. “I am pleased that the POM Wonderful case has been brought to a successful conclusion,” FTC Chair Edith Ramirez said in a May 2, 2016, press release. “The outcome of this case makes clear that companies like POM making serious health claims about food and nutritional supplement products must have rigorous scientific evidence to back them up.…
The Council of Better Business Bureaus (CBBB) and the National Confectioners Association have announced the Children’s Confection Advertising Initiative (CCAI), “a new self-regulatory initiative that promotes responsible advertising to children.” Modeled after the Children’s Food and Beverage Advertising Initiative (CFBAI), which includes six major confectioners, CCAI asks participating companies not to advertise to children younger than age 12 or in schools from pre-kindergarten through sixth grade. Six candy companies have already pledged to abide by CCAI advertising rules. As Federal Trade Commission (FTC) Chair Edith Ramirez remarked, “This new initiative is a welcome addition to the CBBB’s existing Children’s Food and Beverage Advertising Initiative and represents the type of self-regulatory solution the FTC has long advocated. The commitment by six confectionery companies to refrain from advertising in elementary schools and in media targeted at children is a positive step. I also hope that this new partnership with the National Confectioners…
Two app developers have agreed to pay a combined $360,000 to settle Federal Trade Commission (FTC) charges that they allegedly violated the Children's Online Privacy Protection Act (COPPA) by producing and selling games allowing third-party advertisers to collect personal information from children. The games, which include My Cake Shop, My Pizza Shop, Ice Cream Jump and Happy Pudding Jump, appeared to target children younger than age 14, but the app developers apparently failed to inform advertisers of that fact, which would have required them to comply with FTC and COPPA regulations. "It's vital that companies understand the rules of the road when it comes to handling children's personal information online," FTC Bureau of Consumer Protection Director Jessica Rich said in a December 17, 2015, press release. "These cases make it clear that we're closely watching this space to ensure children's privacy online is being protected." Issue 588
The National Advertising Division (NAD), an investigative unit of the U.S. advertising industry’s system of self-regulation, has referred to the U.S. Food and Drug Administration (FDA) and Federal Trade Commission (FTC) an ad campaign for Danisa “Traditional Butter Cookies,” which are manufactured by the Mayora Group in Indonesia and distributed by Takari International, Inc. NAD evaluated the campaign in April 2015 after Campbell Soup Co. challenged several aspects of the product’s marketing, including the claim that the cookies are “produced and packed in Denmark” and “baked following the original recipe from Denmark,” as well as the use of Scandinavian imagery. Further, Campbell argued that FDA requires any product labeled as “Butter Cookies” to use only butter as a shortening ingredient, but multiple independent studies have shown the presence of a non-butter fat ingredient in the Danisa product. Takari International argued it could not be liable for packaging claims or discrepancies…
The Wisconsin-based Cornucopia Institute has asked the Federal Trade Commission (FTC) to investigate labeling associated with Whole Foods Market, Inc.’s Responsibly Grown fresh produce rating system for potential consumer fraud and mislabeling. According to a June 23, 2015, letter to the director of FTC’s Bureau of Consumer Protection, Cornucopia is “concerned that Whole Foods has not met the standards set forth in its recently developed ‘Responsibly Grown’ produce rating system in violation of its stated guidelines, thus grossly misrepresenting the production practices utilized in growing some of the produce it offers for sale to its customers.” Cornucopia suggests that “expedited communication” with Whole Foods resulting in a consent agreement under which signage and labeling related to the rating program are immediately removed “might best serve the public rather than investing taxpayer resources in a time-consuming comprehensive investigation that might result in monetary fines or other penalties.” Issue 570
In a recent journal article, a Babson College marketing law professor discusses legal disputes over the labeling of food as “natural,” noting drawbacks of using courts as public policy developers on the issue. Ross D. Petty, “‘Natural’ Claims in Food Advertising: Policy Implications of Filling the Regulatory Void with Consumer Class Action Lawsuits,” Journal of Public Policy & Marketing, Spring 2015. Petty provides a history of the debate and litigation over use of the terms “natural” and “unprocessed” on food labels, beginning with U.S. Federal Trade Commission (FTC) actions against Sugar in The Raw® and Hawaiian Punch® in the 1970s. The article also details efforts by the U.S. Food and Drug Administration (FDA) and Department of Agriculture (USDA) to define “natural,” “synthetic,” “healthy” and “good source.” Petty highlights industry self-regulation, such as the processes established by the National Advertising Division of the Council of Better Business Bureaus, as a venue for…
The Federal Trade Commission (FTC) has approved a final consent order barring an automobile shipment broker from touting its “highly ranked ratings” without disclosing that consumers were offered a $50 discount to write favorable reviews. According to the agency, the complaint against AmeriFreight is the first time FTC “has charged a company with misrepresenting online reviews by failing to disclose that it gave cash discounts to customers to post the reviews.” See FTC Press Release, February 27, 2015. FTC apparently flagged AmeriFreight’s website and advertising materials for claiming that the company had “more highly ranked ratings and reviews than any other company in the automotive transportation business.” Consumers were apparently offered $50 discounts in exchange for good reviews, with the opportunity to win $100 if their review was selected for a monthly prize. In addition, the agency claimed that the respondents (i) “contacted consumers after their cars had been shipped to…
A coalition of consumer groups led by the Center for Digital Democracy, Campaign for a Commercial-Free Childhood (CCFC) and Center for Science in the Public Interest have filed a complaint with the Federal Trade Commission (FTC), alleging that Google’s YouTube Kids application mixes “advertising and programming in ways that deceive young children, who, unlike adults, lack the cognitive ability to distinguish between the two.” According to the April 7, 2015, press release, the groups also claim that the app promotes several “branded channels” for fast-food and toy companies, as well as “user-generated segments” “that feature toys, candy and other products without disclosing the business relationships that many of the producers of these videos have with the manufacturers of the products, a likely violation of the FTC’s Endorsement Guidelines.” Filed on behalf of these consumer groups by Georgetown Law’s Institute for Public Representation, the complaint asks FTC to investigate whether the…
The Federal Trade Commission (FTC) has filed an administrative complaint arguing that a proposed merger of US Foods and Sysco would violate antitrust laws, resulting in higher prices and diminished service for the companies’ customers. In re Sysco Corp., No. 9364 (FTC, filed February 19, 2015). The complaint asserts that a merger of Sysco and US Foods, the largest broadline foodservice distributors in the United States, would account for 75 percent of the national market for broadline distribution services. The sale of 11 US Foods distribution centers to another distributor would not counteract the significant competitive harm caused by the merger, FTC argues. “This proposed merger would eliminate significant competition in the marketplace and create a dominant national broadline foodservice distributor,” Debbie Feinstein, the director of FTC’s Bureau of Competition, said in February 19, 2015, press release. “Consumers across the country, and the businesses that serve them, benefit from the…
