This Article Is 100% Natural (I Hope the FTC Agrees)10 May, 2016 By: Ivan J. Wasserman
Consumer demand for “natural” products is showing little sign of slowing, and marketers are eager to meet that demand. The problem, of course, is the question: just what is “natural”? Is something still “natural” after it has been processed? Is something “natural” if it hasn’t been processed, but the seeds from which it grew had been genetically modified? Of course, something one consumer thinks is “natural,” another consumer might think is Frankenfood that will eventually destroy us all.
So what is a marketer to do? Well, naturally you look to the Food and Drug Administration (FDA) – the entity that regulates claims for foods, dietary supplements, and cosmetics for a definition of “natural.” What? There isn’t one? Uh-oh.
Without a definition, marketers are left to decide on their own if a product is “natural.” Of course, without a definition, class-action attorneys can sue, arguing that consumers disagree with the company’s decision, and bought the product because it said it was “natural” but, in fact, contained ingredients that they do not think are “natural.” Naturally, those lawsuits have happened – a lot – during the past several years.
While class actions have proliferated, the Federal Trade Commission (FTC) has largely stayed away from the issue – until last month. For the first time, the FTC took enforcement actions against companies for “natural” claims. Interestingly, the products were not foods or dietary supplements, but rather were topical skin care products, sunscreens, and shampoos.
The FTC charged five companies with misleading consumers by claiming the products are “all natural” or “100-percent natural,” when in fact the products contained “synthetic” ingredients including: dimethicone, ethyhexylglycerin, phenoxyethanol, polyethylene, Polyquaternium-37, caprylyl glycol, Polyquaternium-7, and others.
Four of the companies agreed to settle with the FTC by signing consent orders, and the FTC issued a complaint against the fifth company. The consent orders with the four companies cover “100-percent natural” and “all natural” claims. However, the orders do not define what “natural” means.
The FDA and FTC both regulate claims made for foods, dietary supplements, and cosmetics. The FDA has primary jurisdiction over claims on product labels and in labeling, and the FTC has primary jurisdiction over claims made in advertising. Both agencies prohibit false or misleading claims, but neither currently has a formal definition of the term “natural.”
That may be changing for the FDA. After years of refusing to attempt to define the term, on November 12, the FDA announced that it was soliciting input from the public on the question of whether it should define the term “natural” and, if so, how? The comment period closes on May 10. Time will tell if the FDA defines the term. Importantly, as of now, the FDA is only discussing the term for foods (including dietary supplements). Cosmetics and other topical products are not part of it.
Since the FTC does not have a definition of the term “natural,” and did not include one in these recent orders, marketers are still without clear guidance on what products can be called “natural.” The ingredients that got these companies into trouble with the FTC seem to be clearly not “natural.” Can you claim a product is “natural” if has a very processed botanical ingredient? What about a GMO ingredient?
In the FTC’s press release, Jessica Rich, director of the FTC’s Bureau of Consumer Protection, warned that, “‘All natural’ or ‘100-percent natural’ means just that – no artificial ingredients or chemicals. Companies should take a lesson from these cases.”
Lesson learned: do not say a product is “100-Percent Natural” or “All Natural” when it clearly contains hard-to-pronounce chemicals. Understood. But what if it contains oil from corn? What if it contains GMO soy? What if it contains trace amounts of something? There are a lot of unanswered questions that naturally continue to make marketers very nervous.
Ivan Wasserman is a partner in the Washington, D.C., office of Manatt Phelps & Phillips LLP. He can be reached at firstname.lastname@example.org.