U.S. Rep. Edward Markey (D-Mass.) has written a November 30, 2012, letter to Federal Trade Commission (FTC) Chair Jon Leibowitz asking the agency to investigate advertising claims made by energy-drink manufacturers. Alarmed by recent media reports allegedly linking products such as 5-Hour Energy® to consumer deaths, Markey notes that many energy drinks “are sold as dietary supplements” that do not fall under Food and Drug Administration (FDA) rules for caffeine content or labeling, and do not require FDA approval before going on the market. “As you know, the FTC has in the past successfully investigated and took action against claims made by alcohol-containing energy drinks found to be engaging in unsafe, deceptive marketing claims,” writes Markey, who has also asked FTC to describe its coordination with FDA and other federal agencies. “I believe an investigation into energy drinks that do not contain alcohol and are often targeted at children may…
Category Archives Federal Trade Commission
According to a November 5, 2012, New York Times article, technology and media companies have joined trade groups and marketing associations in opposing the Federal Trade Commission’s (FTC’s) efforts to update provisions implemented under the Children’s Online Privacy Protection Act (COPPA). As regulators look to expand the types of data-collection activities covered by COPPA, companies such as Facebook, Google and Twitter have reportedly pushed back against these proposals as unduly onerous and likely to stifle all web-based services created for children. Industry analysts have purportedly noted that once FTC requires parental consent for companies to use customer code numbers to track children, the agency “might someday require… similar consent for a practice that represents the backbone of digital marketing and advertising—using such code numbers to track the online activities of adults.” Furthermore, social media platforms have apparently taken issue with a plan to hold third parties liable “if they know…
University of Wyoming College of Law Professor Mary Dee Pridgen has updated a treatise titled Consumer Protection and the Law to reflect recent developments in Federal Trade Commission (FTC) enforcement of its 1995 policy statement on food advertising. As she notes, although FTC and the Food and Drug Administration (FDA) have overlapping authority to police food advertising claims, they have generally divided their duties with FDA concentrating on food labels and FTC addressing advertising claims. FTC indicates in the policy statement that it will give advertisers “a bit more leeway in advertising than the FDA allows on labels,” but if an advertising claim complies with FDA labeling regulations, it will “generally be safe from FTC scrutiny.” Pridgen discusses FTC enforcement actions since the mid-1990s, involving Stouffer Foods, Häagen-Dazs, the Isaly Klondike Co., Mrs. Fields Cookies, Dannon, Gerber, and Kellogg, as well as companies that sell dietary supplements. She concludes, “In…
The Federal Trade Commission (FTC) has issued a staff report outlining best practices for the use of facial-recognition technology in online social networks, mobile apps, digital signs, and other products and services. According to an October 22, 2012, FTC press release, facial recognition technology has “a number of potential uses, such as determining an individual’s age range and gender in order to deliver targeted advertising; assessing viewers’ emotions to see if they are engaged in a video game or a movie; or matching faces and identifying anonymous individuals in images.” But the agency has also expressed concern that these advances could contravene consumers’ expectations of privacy because they hold “the prospect of identifying anonymous individuals in public, and because the data collected may be susceptible to security breaches and hacking.” FTC is urging companies that use facial-recognition technology to (i) “design their services with consumer privacy in mind”; (ii) “develop reasonable…
A federal court in the District of Columbia has dismissed the declaratory judgment action that POM Wonderful filed against the Federal Trade Commission (FTC) shortly before the Commission brought an enforcement action against the pomegranate product producer. POM Wonderful LLC v. FTC, No. 10-1539 (D.D.C., decided September 30, 2012). More information about the complaint and FTC’s motion to dismiss appears in Issues 364 and 373 of this Update. According to the court, “[t]he balance of relevant factors counsels against exercising jurisdiction over this action.” Among other matters, the court found that (i) the declaratory judgment action would not fully resolve the parties’ claims because they would “still have to litigate whether POM’s health claims about its products were false, misleading, and unsubstantiated in violation of the FTC Act”; (ii) “other overlapping proceedings are pending” and POM can raise arguments in those proceedings that it has raised in the declaratory judgment…
The Federal Trade Commission (FTC) has revised its Green Guides to “help marketers avoid making misleading environmental claims.” According to FTC, the revisions reflect “hundreds of consumer and industry comments” and include changes to existing Guides “as well as new sections on the use of carbon offsets, ‘green’ certifications and seals, and renewable energy and renewable materials claims.” In particular, the updated guidance advises against “broad, unqualified claims that a product is ‘environmentally friendly’ or ‘eco-friendly’” because such claims are “nearly impossible to substantiate.” FTC has also warned marketers about the use of unqualified degradable claims for solid waste products and items destined for landfills, incinerators or recycling facilities, and clarified its guidelines for compostable, ozone, recyclable, recycled content, and source reduction claims. In addition, the Green Guides now offer new sections covering issues not anticipated in previous editions, such as (i) certifications and seals of approval, (ii) carbon offsets,…
The U.S. Federal Trade Commission (FTC) conducted a day-long workshop, October 2, 2012, “to examine competition and consumer protection issues in the pet medications industry.” Currently pending before the House Subcommittee on Health, a bill (H.R. 1406) introduced in April 2011 by Representative Jim Matheson (D-Utah) would require FTC to issue rules mandating pet medication prescription portability, which could fundamentally change the way such products are sold in the United States. FTC seeks stakeholder input on issues that would affect a $7 billion per year industry and has extended the public comment period to November 1. An early step in FTC’s investigation, the workshop provided a forum for widely divergent views as veterinary professional advocates and representatives of the animal health industry addressed current practices limiting the distribution of pet medications and the potential impact of a change that would allow consumers to purchase the drugs from a full range…
The Federal Trade Commission (FTC) has reopened the comment period for its October 2, 2012, workshop on competition and consumer protection issues in the pet medications industry. The commission is “seeking the views of consumers, veterinarians, pharmacists, manufacturers, business representatives, economists, lawyers, academics, and other interested parties” submitted by November 1, 2012. FTC’s workshop agenda includes discussions on how pet medications are distributed to consumers and “how these distribution practices affect consumer choice and price competition.” See FTC News Release, September 19, 2012.
A coalition of advocacy organizations has filed five complaints with the Federal Trade Commission (FTC) against companies including McDonald’s Corp., General Mills, Inc. and Doctor’s Associates, Inc., calling for an investigation into Websites they purportedly use to promote food and TV programs to children. According to the coalition, the food-related websites— HappyMeal.com, ReesesPuffs.com, TrixWorld.com, and SubwayKids. com—violate the Children’s Online Privacy Protection Act (COPPA) by encouraging children to provide their friends’ email addresses and create videos promoting branded products to send to their friends. According to the coalition, “tell-a friend,” or “viral marketing,” is profitable given the effectiveness of word-of-mouth advertising and the opportunity to create “lifetime customers.” The coalition is also requesting that FTC update existing COPPA regulations “to include data collection and storage of photographs online from children, as well as placement of cookies used for types of behavioral advertising.” Claiming that “several of the child-directed websites we…
A federal court in New Jersey has, for a second time, requested supplemental briefing before approving a stipulated final order for permanent injunction and other equitable relief in the Federal Trade Commission’s (FTC’s) action against a company that allegedly marketed açai-berry weight-loss products with “fake” news reports and deceptive claims. FTC v. Circa Direct LLC, No. 11-2172 (D.N.J., order filed June 13, 2012). Among other matters, the court seeks FTC’s views on whether the agency has shown it was likely to succeed on the merits “without an admission of liability by the Defendants and with no evidentiary submissions before the Court.” The court also requests additional briefing on whether it “may consider the lack of an admission by the defendants in its public interest analysis under the [FTC Act].” When the parties submitted their first supplemental briefs, FTC Commissioner J. Thomas Rosch submitted a letter indicating that, in his view,…
