Putting Brands in Their Place

FTC's David Vladeck leads the charge in the feds' crackdown on deceptive ads

Advertisers can’t say they weren’t warned.

Three years ago, right after joining the Federal Trade Commission as director of the Bureau of Consumer Protection, David Vladeck stood before the ad industry’s self-regulatory group at its annual conference to lay down an aggressive agenda.

Bucking the bureau’s traditional practice of focusing almost solely on fraudsters and hucksters intent on scamming consumers, Vladeck vowed to crack down on deceptive advertising by the nation’s largest brands. “National advertising is, once again, a high priority for BCP,” he told the Advertising Self-Regulatory Council (ASRC). Vladeck’s road map promised closer examination of health claims and clarification of what constitutes adequate scientific backing, promising that future FTC settlements would contain more precise language and reimburse consumers taken in by false promises.

Since that time, the BCP has, in fact, built up an aggressive record of taking on top brands including Nestlé, Dannon, Reebok and Skechers for touting unproven health or fitness benefits.

“There’s no reason that advertisers with trusted brands that consumers rely on should get a pass,” Vladeck maintains, adding, “We haven’t slackened in our anti-fraud efforts. But we figured what’s sauce for the goose is sauce for the gander.”

The result has been impressive settlements with food and dietary supplement merchandisers creating stricter standards for all advertising. In the most recent cases, the FTC obtained full refunds for consumers, extracting historic settlements of $25 million from Reebok and $40 million from Skechers for ads for sneakers promising miraculous toning and weight-loss properties.

This is territory Vladeck understands well. Before his appointment by FTC chairman Jon Leibowitz, he spent seven years as the director of Georgetown University’s Center on Health Regulation and Governance at the O’Neill Institute for National and Global Health Law. But it was his three decades as a lawyer for the Public Citizen Litigation Group that shaped his aggressive, take-no-prisoners style, arguing more than 60 cases before both federal and state courts.

Amy Mudge, an attorney with the Venable law firm who has represented FTC targets including Kellogg’s, Ab Circle Pro and Dannon, believes that Vladeck’s background in litigation rather than management has shaped his fearlessness. “He has spent his career trying difficult cases,” says Mudge. “The FTC isn’t limiting itself to cases they know they can win—they’re bringing test cases that the bureau believes are in the public interest, even if they are difficult to win.”

Though Vladeck did not attend last month’s annual meeting of the ASRC, his presence was clearly felt there. “More advertisers are worried about the FTC and they should be,” C. Lee Peeler, CEO of the ASRC, which operates under the Council of Better Business Bureaus, said at the gathering.

At the top of the FTC’s agenda are overhyped health claims, which have become as popular a marketing tactic as sex in recent years. “You can’t walk up and down a grocery aisle or watch TV and not see these claims,” Vladeck says. “And because of the trust consumers place in brands like [Kellogg’s] Rice Krispies—that promised your kid won’t get the flu—consumers are going to act on them.”

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