claims before including them in future marketing materials. ... ADVERTISING, MARKETING & PROMOTIONS. For one ... it
FEBRUARY 2013
ADVERTISING, MARKETING & PROMOTIONS
>> ALERT WHY THE FTC WAS NOT WONDERFUL TO POM The Federal Trade Commission (FTC) has found that claims made by POM Wonderful LLC (POM) about its pomegranate juice products in 36 distinct ads and promotional materials were false and misleading based on the absence of proper substantiation for the claims, which the FTC concluded meant well-designed, well-conducted, double-blind, randomized controlled clinical trials (RCTs). BACKGROUND In September 2010, the FTC issued an administrative complaint alleging that POM had disseminated advertising and promotional materials claiming that consumption of its pomegranate juice products could help treat, prevent, or reduce the risk of heart disease, prostate cancer, or erectile dysfunction (ED) without having a reasonable basis to make those claims. The FTC complaint also alleged that POM had disseminated certain advertising and promotional materials representing that claims were supported by clinical proof when, in fact, POM did not have any clinical proof. An administrative law judge (ALJ) found against POM with respect to 19 of 43 challenged advertisements and promotional materials, and subsequently both parties appealed the ALJ decision to the FTC’s Commissioners.
FTC’S OPINION In its Final Order, the FTC denied POM’s appeal and went further than the ALJ, finding POM liable on the
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THE BOTTOM LINE POM may very well seek further judicial review of the Final Order. However, the FTC’s strongly worded decision has implications not only for POM, but for all advertisers making express or implied health benefit or disease prevention claims about their products. Advertisers should carefully review the substantiation they have for these claims before including them in future marketing materials.
basis of 36 advertisements containing false and misleading claims. While the FTC found that POM’s health and disease benefit claims required support from RCTs, it did not opine on the issue of whether all these claims must be supported by at least two RCTs as had been suggested in the original administrative complaint, observing that POM did not have even one. The FTC did issue, however, “fencing-in relief” for POM that provided that, going forward, any disease-related efficacy claims or establishment claims (i.e., claims that there was clinical proof of efficacy claims) made about POM’s challenged products or in connection with POM’s sale of any food, drug, or dietary supplement had to be supported by at least two RCTs.
CLAIMS MADE WERE MATERIAL The FTC first found that POM had disseminated advertising or promotional material making efficacy claims regarding disease treatment, prevention, and risk reduction. It reasoned that in the context of POM’s challenged advertisements, reasonable consumers would read claims to “prevent” or “reduce the risk of” heart disease, prostate cancer, or ED as conveying the claim that consuming the products substantially reduced the likelihood that the consumer would contract the disease or condition. The FTC ruled that it was not necessary that the consumer believe that the products would absolutely prevent the onset of these conditions. >> continues on next page
FEBRUARY 2013
ADVERTISING, MARKETING & PROMOTIONS >> ALERT For one example, the FTC pointed to an ad that it found conveyed to “at least a significant minority of reasonable consumers” that drinking eight ounces of POM juice daily prevented heart disease. It said that it made this finding based on the “net impression” of the advertisement, including the statements that drinking eight ounces of POM juice a day could “help prevent ... heart disease” and “[t]he sooner you drink it, the longer you will enjoy it.” In addition, the FTC found that in certain ads, POM represented that health and disease benefit claims were supported by clinical studies and proof. For example, the FTC noted that the representation in the text of an ad that drinking “eight ounces a day can reduce plaque by up to 30%!” – which was in the same size font as the rest of the ad text – “would lead at least a significant minority of reasonable consumers” to interpret the ad to convey that there was clinical proof of the heart disease claims. Importantly, because the FTC ruled that the common-sense, “net impression” of the words and images
of the ads conveyed to at least a significant minority of reasonable consumers that there was clinical proof for the disease treatment, prevention, or risk reduction claims at issue, no “extrinsic evidence” was required to demonstrate what consumers believed.
CLAIMS WERE FALSE OR DECEPTIVE The FTC found that POM’s establishment claims were false in that POM did not have the level of substantiation that the ads claimed (i.e., “clinical proof”), which the FTC determined to mean RCTs based on what experts in the relevant fields would require to establish a causal relationship. Moreover, the FTC ruled that POM’s efficacy health and disease benefit claims lacked a “reasonable basis,” which it found to mean substantiation by RCTs, and therefore the claims were deceptive.
THE ORDER After finding that POM’s challenged claims were material and were false and misleading, and after rejecting
POM’s First Amendment argument that “prior substantiation” is not needed if the claims are nevertheless true, the FTC issued an order that barred POM from making any claim that a food, drug, or dietary supplement was “effective in the diagnosis, cure, mitigation, treatment, or prevention of any disease,” including heart disease, prostate cancer, and ED, unless the claim was supported by two RCTs. The FTC’s order also prohibited misrepresentations by POM regarding any test, study, or research, and required it to have competent and reliable scientific evidence to support claims about the “health benefits, performance, or efficacy” of any food, drug, or dietary supplement.
FOR MORE INFORMATION Ronald R. Urbach Chairman 212.468.4824
[email protected] Matthew E. Smith Associate 212.468.4804
[email protected] or the D&G attorney with whom you have regular contact.
Davis & Gilbert LLP T: 212.468.4800 1740 Broadway, New York, NY 10019 www.dglaw.com © 2013 Davis & Gilbert LLP
