FTC, POM Wonderful Battle Continues5 Feb, 2013 By: Gregory J. Sater
The Federal Trade Commission (FTC) has issued a final opinion and order affirming in large part the previous ruling by an administrative law judge after trial, that POM Wonderful LLC and other related parties violated the FTC Act by making false or misleading claims to promote their pomegranate products, POM Wonderful Juice, POMx Pills and POMx Liquid.
POM Wonderful and the other named parties now have the right to petition for review of this decision by the U.S. Circuit Court of Appeals.
The Commission’s order prohibits the parties from making any advertising claim in the future that any food, drug or dietary supplement is effective in diagnosing, curing, mitigating, treating or preventing any disease including heart disease, prostate cancer and erectile dysfunction unless they can substantiate such advertising claims by having two randomized, well-controlled, human clinical studies. (Although the Commission’s vote was unanimous, 5-0, one of the commissioners filed a concurring statement stating that she would have insisted only upon one clinical study.)
POM argued that a two-clinical study standard would be a retroactive application of a new legal standard by the FTC, and that this would violate POM’s constitutional due process rights. The Commission rejected this argument, however, stating that the level of substantiation required by the FTC Act in a particular case is always a fact-based determination to be made on a case-by-case basis. In this specific case, in deciding what the substantiation standard should be, the FTC relied on advice from scientific experts in the field. Thus, in the agency’s view, the pre-existing legal standard has not changed at all – it simply is going to depend on the particular case, as it always has.
There is insufficient room here to summarize the entire 53-page decision, but some of the elements that DRMA Voice readers might find of interest include the following:
- That in determining what claims have been conveyed by a challenged ad, the FTC is entitled to rely on its own analysis. The FTC does not need to conduct a professional survey of consumers’ perceptions of the ad, so long as the advertising claims, including implied claims, are “reasonably clear” from the face of the ad.
- That, in this instance, the FTC concluded that POM did convey efficacy claims about its products’ ability to treat or reduce the risk of certain diseases – even though POM’s ads had not expressly contained such claims – because such claims were conveyed indirectly through references to blood pressure, plaque, blood flow, heart disease, PSA-doubling time, prostate cancer, erectile functioning and other medical language and imagery which contributed to the overall “net impression” of the POM advertising campaign.
- That, in the FTC’s opinion, POM conveyed that clinical study proof existed for the alleged disease prevention, treatment or risk reduction claims and that POM thereby made establishment claims – even though the POM advertisements had used tentative-sounding adjectives such as “preliminary,” “promising” or “encouraging” – to describe the nature of the scientific testing that existed. The FTC came to this conclusion due to statements in some of the ads that discussed the millions of dollars that had been spent on the medical research which “reinforce[d] the impression that the research supporting [the] product claims is established and not merely preliminary.”
- That the same was true with regard to POM having used words such as “may” or “can.” The FTC did not view those words as eliminating the basic product efficacy message that POM was conveying to the public.
- That the company’s COO, whom the FTC found to be responsible for managing the operations of its marketing team, would be held individually responsible and subject to the order the same as POM, as a result of the Commission’s finding that he had participated in or had the authority to control the advertising.
Gregory J. Sater is a partner in Venable LLP‘s Advertising, Marketing and New Media Group. He can be reached via E-mail at email@example.com.