Putting Brands in Their Place

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

In one of the earliest cases under his watch, Kellogg’s got into trouble for heralding its Frosted Mini-Wheats as “clinically shown to improve kids attentiveness by nearly 20 percent,” even as the company’s own clinical study showed far more modest results. Less than a year later, the FTC added on to the complaint for Rice Krispies, asserting that the breakfast cereal “now helps support your child’s immunity.”

“Clearly the government has made consumers more concerned about health and a lot of products are making health and fitness claims. They’re reacting to consumers’ interests, and the FTC is responding to the marketplace,” says Jeff Greenbaum, a managing partner at Frankfurt Kurnit Klein & Selz.

Brands have opened themselves up to scrutiny adding vitamins and supplements to their products. “Food companies are distressingly marketing themselves as something other than food—some are turning food into drugs,” says Steve Gardner, head litigator at the Center for Science in the Public Interest. “It’s excessively done and it’s on the increase.”

But holding companies accountable for health claims has not been easy. For many years, the FTC’s requirement for “reliable and scientific evidence” was vague and flexible. The proof that a claim was “reliable and scientific” relied pretty much on experts simply agreeing it was, and brands and the FTC would trot out their respective specialists. The results tended to be fuzzy, with mixed results for the FTC. “I’m a litigator. I don’t want to fight over the same real estate twice,” Vladeck says. ”The only way you can enforce an order is if it’s crystal clear.”

Seeking that clarity, the FTC began to spell out exactly how it interpreted “reliable and scientific evidence” in two landmark settlements. In 2010, Nestlé HCN agreed to stop promoting Boost, a probiotic children’s drink, as “clinically shown to help strengthen the immune system,” reducing the risk of colds, flu and other ailments unless the Food and Drug Administration approved the claim. Nestlé would also be required to support such health claims with at least two well-designed human clinical studies.

The same year, the FTC also lowered the boom on Iovate Health Sciences USA, whose ads featured people in white lab coats being passed off as doctors, declaring that the company’s dietary supplements Cold MD and Germ MD treated or prevented colds and flu and that Allergy MD treated or prevented allergies and hay fever. Meanwhile, the company claimed its weight-loss products, Accelis and nanoSLIM, could help consumers “Lose 32 lbs FAST” or a few pounds per week.

Nestlé and Iovate settled, though the ad community was shocked after the FTC required both companies to back future health claims about preventing or curing illness with two clinical trials and FDA pre-approval. Adding punch to the settlement, Iovate agreed to a $5.5 million payment for consumer refunds.

“That shook us in the industry,” says former FTC attorney Marc Roth, now a partner at Manatt, Phelps & Phillips. “Before, you needed competent and reliable scientific evidence. Now the agency seemed to be saying you needed two clinical trials. That’s a game changer.”

Next, the FTC applied clearer guidance to two food companies. In a campaign featuring actress Jamie Lee Curtis, Dannon was called out for claims that the yogurt Activia “eaten every day is clinically proven to help regulate your digestive system in two weeks.” In settling, the yogurt maker agreed to pay $21 million to 39 state attorneys general who coordinated on the case.

Meanwhile, POM Wonderful, a privately held company with deep pockets, has fought back. The company has vigorously defended its assertion that, as the FTC puts it, “Wonderful 100% Pomegranate Juice and POMx supplements [POM products] would treat, prevent, or reduce the risk of heart disease, prostate cancer and erectile dysfunction.”

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