Promoting the marginal value of consumer products can sometimes pose issues for brands when navigating deceptive advertising claims. While the practice of puffing is widely used by brands to induce a favorable emotional response to a new product, there is a clear line that should not be crossed. Particularly, when a brand touts features or characteristics of a product that provide some sort of quantifiable benefit, the asserted claims always need to be substantiated in order to avoid running afoul of FTC Act and various state unfair and deceptive trade practice laws.
According to the Federal Trade Commission’s complaint filed in late October, Gerber, a division of Nestle Nutrition, had allegedly failed to substantiate health claims related to its Good Start Gentle infant formula. Specifically, since 2011, Gerber promoted its product with claims that their formula prevents or reduces the risk of hereditary induced allergies in infants. Gerber promoted this claim in its various advertisements, including a sticker on product packaging stating the formula was the “1st and only routine formula to reduce the risk of developing allergies.”
Further, the FTC alleges that Gerber’s ads had inappropriately asserted that the formula had been endorsed by or received approval from the US Food and Drug Administration. Specifically, some ads prominently displayed a gold badge stating that the formula was the “1st and Only [formula that] meets [the] FDA Qualified Health Claim.” The FTC contends that while the FDA did provide Gerber with narrowly tailored permission to claim the formula reduced one type of allergy, atopic dermatitis, it did so under the caveat that Gerber also qualify the statement that there was little scientific evidence for the relationship. Nonetheless, Gerber’s advertisements failed to include this qualification.
So what could have Gerber done if there was insufficient scientific data to support the claims they were making regarding their product? Sound advertising compliance practices warrant that all packaging and advertising copy should be reviewed by marketing counsel prior to publication. While the facts alleged by the FTC seem like textbook violations of what would have been flagged by any decent marketing lawyer early on, its likely that Gerber fell victim to the not-so-uncommon situation where the marketing department intentionally or mistakenly circumvented its company’s legal review process.
Without lamenting too much on Gerber’s predicament, here are some lessons that companies can learn so as to ensure that they won’t meet a similar fate:
1. Create a company culture where the legal team and the marketing department are treated as a partnership, each with their own valuable contribution to the enterprise. Marketers are revered as the stewards of creative messaging for companies to drive sales while the lawyers are responsible to protect the company’s balance sheet and good will from actions that overstep gray area of ethical business practices.
2. Marketing lawyers need to learn to be flexible and understand the business needs of the client. The first response from a marketing lawyer should not be “no,” but rather, how can we achieve the same business results while mitigating some of the risk factors implicated in the marketing department’s strategy.
3. The review process should be fluid and not too cumbersome so that the marketing lawyers’ review is not delaying the campaign launch. An effective process provides the marketing department guidelines to self manage themselves up to a point. This provides the marketers with some autonomy to tailor the copy to meet certain compliance requirements prior to legal review and increase the chances it will pass scrutiny. If the legal review process reflects a free for all, however, chances are that the legal counsel will be inundated with requests to review materials that don’t meet even the most basic requirements, in which case, they will likely either summarily reject the submission or have it sit in backlog for weeks.
4. The marketing lawyers should be accountable for a reasonable turn-around of 2-5 business days, depending on the volume of submissions and staffing capacity. This also means that the marketing department needs to be accountable to submit materials early so as not to impose an unreasonable time crunch on the legal team.
5. In rare cases, there should be a fast-track process for true emergency reviews that get ahead of the line. There should be triggers that would warrant a submission getting fast track treatment. The number of these fast tracks should be limited so as to not invite abuse.
David Michail is a marketing, new media and technology attorney in Southern California.