Stay ADvised: What's New This Week, June 17
- Truth In Advertising Says “Your Super” Is Running Afoul of FDA
- TINA Critiques FDA Regulation of Dietary Supplements
- FTC and FDA Warn E-Liquid Companies Against Posting Social Media Ads Without Health Warnings
- It’s Double the Lawsuit, Double the Enforcement as FTC Sues Two Companies Under the Consumer Review Fairness Act
- Ad Tech Companies Brought Into Compliance with Interest-Based Advertising Best Practices After Independent Inquiry
Truth In Advertising Says “Your Super” Is Running Afoul of FDA
Another day, another supplement company violating FDA rules, at least according to a recent investigation conducted by TruthInAdvertising.org (TINA). The nonprofit advertising watchdog recently called out health supplement company Your Super for claiming in its advertisements that its products treat and cure serious diseases. These types of claims are not permitted by law without FDA approval, TINA said.
Los Angeles-based Your Super sells products in trendy packaging with names like “Super Green,” “Forever Beautiful,” and “Power Matcha” and claims the products provide various health benefits for skin, hair and energy. The company has received recent favorable press coverage and a $5 million investment. Its website and press coverage touts how co-founder Kristel de Groot started making the powders to help her co-founder boyfriend Michael Kuech regain energy after an early cancer diagnosis.
TINA’s review of Your Super’s website found the company may be going too far by claiming that its products treat and cure serious diseases. Specifically, the company has advertised that its supplements can help cure cancer, depression, colitis and IBS, according to TINA. These types of claims are prohibited by the FDA without scientific support and agency approval.
Specifically, TINA cites Your Super’s “row upon row” of consumer testimonials on its website and social media accounts that run afoul of basic consumer protection laws. According to these testimonials, Your Super’s products have cured customers of all manner of serious maladies. For example, TINA notes a social media post that de Groot “liked” on Facebook of a woman claiming that Your Super cured her of Graves Disease and Hyperthyroidism: “My Graves Disease won’t leave me, they say. My Hyperthyroidism is here to stay, they say. My Depression is in me, they say? I say…KISS MY LILY WHITE and watch me kick this crap to the curb! Thank you, again, Your Super!”
TINA notes another social media post on Your Super’s customer testimonials page of a woman recommending Your Super as an alternative to chemotherapy for lung cancer.
TINA emphasized that the problem is not with repeating or including in company marketing materials customer reviews that make claims about the product, but that the claims have not been verified by the FDA, “Customers can say whatever they want about a product but if a company intends to use that review in its marketing materials, it must ensure that the review complies with the law. Any claims to treat, cure, alleviate the symptoms of, or prevent developing disease are simply not permitted by law without FDA approval, which as a supplement and not a drug subject to rigorous study and testing is something that Your Super does not have,” said TINA.
As a nonprofit that investigates the veracity of advertisements and is not affiliated with any government agency, TINA expends notable time and resources looking at supplement companies that make questionable – and in its eyes, illegal – claims about the efficacy of their products. This post from TINA underscores the importance of carefully reviewing and curating customer testimonials so as to not be viewed as “adopting claims that the company could not otherwise prove on its own.”
TINA Critiques FDA Regulation of Dietary Supplements
Not only has TINA been active in conducting its own investigations of dietary supplement companies, such as the one noted in the above story, but it has also chided the Food and Drug Administration (FDA) for failing to enforce or update its regulations in this category. And the FDA doesn’t disagree.
The FDA recently held a public meeting on the topic of “Responsible Innovation in Dietary Supplements,” to give stakeholders “an opportunity to present ideas for facilitating responsible innovation in the dietary supplement industry while preserving the FDA’s ability to protect the public from unsafe, misbranded, or otherwise unlawful dietary supplements.”
“The realities of today’s marketplace demand a renewed approach to regulation,” said Acting FDA Commissioner Ned Sharpless at the public hearing. “Now is the time to modernize our program to ensure better alignment with the realities of today’s dietary supplement market,” he added.
But TINA voiced concern that, rather than offering any immediate solutions or policy changes, the meeting only emphasized the problems with current regulation of health supplements. It showed many changes are needed to properly protect consumers from an industry that has grown tenfold since the passage of the 1994 Dietary Supplement Health and Education Act (DSHEA), the law that currently regulates supplements.
According to TINA, the source of the problem is that DSHEA gives the FDA little power to enforce the supplement industry. To that point, the consensus of speakers at the FDA meeting was that the DSHEA is “generally broken,” “not consistently great,” and “a paper tiger” that hardly gives the FDA sufficient enforcement tools to regulate what has become a $40 billion industry.TINA identified a few specific problems with the DSHEA. First, it does not give the FDA the authority to review supplements before they are offered for sale; instead, it must rely on supplement companies to self-report, which they often do not, according to TINA. Further, the FDA’s only mechanism to assess the safety of a supplement before it is brought to market, receipt of a New Dietary Ingredient Notification (NDIN), does not work because not all supplement companies are required to provide an NDIN, and those that are, often skirt the requirement by instead submitting a Generally Recognized as Safe (GRAS) notice that requires no FDA input on the supplement’s safety before it enters the marketplace.
But not everyone is keen on strengthened regulation of supplement companies, observed TINA. Some supplement industry leaders are worried that strengthened regulations will hinder innovation. Andrew Shao, the Council for Responsible Nutrition’s Interim Senior Vice President of Scientific and Regulatory Affairs, said companies often don’t file NDINs due to proprietary intellectual property theft concerns that may result from lacking data protection mechanisms.
TINA has focused a many of its investigations of health supplement companies, such as the one above. As the FDA takes steps to begin updating regulation of supplements, it seems almost everyone agrees with TINA that existing regulation should be strengthened to protect consumers. It remains to be seen how and to what extent the FDA will take such steps, and whether it will bring regulation of supplement manufacturers more in line with current regulation of drugs.
FTC and FDA Warn E-Liquid Companies Against Posting Social Media Ads Without Health Warnings
Product warnings come in all shapes and sizes. The most well-known arise under laws regulating tobacco products, which require ads and social media posts for covered goods to state: “WARNING: This product contains nicotine. Nicotine is an addictive chemical.” But these laws are not limited to traditional tobacco products like cigarettes and cigars, as the FTC and FDA recently reminded several companies that manufacture and sell e-liquid products such as e-cigarettes and e-cigarette refills that these laws apply to them as well. The “reminder” came in the form of four joint-authored letters from the agencies informing the companies they may be violating the Food, Drug & Cosmetic Act (FDC&A) and the Federal Trade Commission Act (FTC Act) by marketing products on social media without properly labeling them as containing nicotine and carrying potential health risks.
The letters were sent to Solace Technologies LLC (d/b/a Solace Vapor), Hype City Vapors LLC, Humble Juice Co. LLC, and Artist Liquids Laboratories LLC (d/b/a Artist Liquid Labs) following the agencies’ review of the companies’ social media postings. The FDA advised each company that their marketing on social media, including Instagram posts featuring influencers, lacked the necessary warnings. Specifically, the FDA warned the companies that they are misbranding their products in violation of the FDC&A by omitting mention of health risks associated with nicotine use. It emphasized that e-liquid manufacturers must include the above statement on all labeling and advertising for nicotine-containing products, including on social media advertisements.
The FTC urged the companies to ensure compliance with prohibitions against unfair or deceptive marketing by following certain guidelines, such as (1) disclosing health risks associated with the products, (2) identifying paid social media endorsements by influencers promoting their products by “clearly and consciously” specifying any paid endorsement relationship in the posts, and (3) reviewing their marketing and internal social media policies to ensure they include appropriate disclosures to avoid potential deception.“These letters are a reminder that companies that use social media influencers to promote their products must comply with all applicable advertising requirements,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “Moreover, ads must disclose material health or safety risks—in this case, the fact that nicotine is highly addictive.”
The warning letters require the companies to inform the agencies of action taken to remedy the concerns within 15 days following receipt of the correspondence.
As social media has changed the way advertisers seek to communicate with consumers, government agencies have stepped up their efforts to ensure a safer and better informed marketplace. As consumers have embraced e-cigarettes as a perceived “safer” alternative to traditional tobacco products, the manufacturers of these products have a duty to include appropriate warnings on and about their products, as the FTC and FDA letters have noted.
Ad Tech Companies Brought Into Compliance with Interest-Based Advertising Best Practices After Independent Inquiry
The Online Interest Based Advertising Accountability Program (Accountability Program), an independent organization that enforces responsible digital privacy principles promulgated by the Digital Advertising Alliance (DAA), recently announced actions against two companies that failed to follow DAA’s voluntary principles. In response, the Accountability Program administrators reported that these companies changed their data collection practices to comply with DAA principles.
Interest-based online advertising (IBA) refers to online advertisements targeted toward specific consumers based on their interests using data collected from their web surfing activities. In addition to its industry self-regulatory compliance role, the Accountability Program also educates consumers about digital privacy, online advertising, and instructions on how to opt out of data collection for IBA. It also independently enforces DAA principles for best privacy practices in digital advertising by responding to consumer complaints and initiating compliance reviews as necessary.
The Accountability Program recently launched inquiries into ad tech companies IQM Corporation and Kargo Global, Inc. following consumer complaints that they were not complying with DAA principles.In the case of IQM, the Accountability Program initiated an inquiry after consumers complained that the company, which supports political campaigns and voter intelligence, did not provide a mechanism to opt out of having their data collected for IBA. Following its investigation, the Accountability Program contacted the company about the complaints, prompting IQM to revise its privacy policies to comply with DAA principles. Among such changes was updating its privacy disclosures to clarify the scope of its IBA practices and adding instructions to help users opt out of IBA. The Accountability Program also contacted Kargo Global after consumers complained that its opt-out tools did not work, resulting in the company also amending its practices.
“Providing and maintaining easy-to-use opt-out tools are essential to honoring consumer privacy,” according to Jon Brescia, the Accountability Program’s Director of Adjudications and Technology. “Today’s cases illustrate that industry members like IQM and Kargo recognize this fact and take it seriously.”
Although self-policing organizations like the Accountability Program may not have the force of law of U.S. law enforcement agencies or Data Protection Authorities under the European General Data Protection Regulation, this matter illustrates potential consequences for companies that do not provide consumers with the ability to opt out of digital data collection for IBA. The companies implicated here cooperated quickly with the Accountability Program, including, in the case of Kargo Global, consulting with the organization to bring its systems into compliance. Digital advertisers should take note of and comply with DAA principles to ensure that consumers are provided with appropriate information about how their information is collected and used for IBA and the ability to opt out.
Plaintiff Files Class Action Lawsuit Against Redbox Alleging TCPA Violations
Redbox, the operator of the ubiquitous candy red rectangular video rental machines found in grocery stores, parking lots, and fast food restaurants was recently served with a putative consumer class action lawsuit in Illinois state court alleging it violated the Telephone Consumer Protection Act (TCPA) by spamming consumers with unsolicited text messages.
The TCPA prohibits using automated dialing equipment (which includes texting devices), for telemarketing purposes without appropriate consumer consent. In this action, the would-be class representative plaintiff alleges that Redbox Automated Retail LLC unlawfully marketed its movie rental services by sending mass text messages to consumers without obtaining their prior consent. According to the complaint, thousands of people across the U.S. that Redbox considered potential customers received unsolicited text messages promoting the company’s services. The complaint alleges that these spam text messages may cost consumers money, as wireless carriers typically charge recipients for incoming texts, either on a per text basis, or as part of a data plan.
The named plaintiff alleges he received two consecutive text messages marketing Redbox, the first offering a code to receive a free “DVD, Blu-ray or Game rental”, and the next instructing to “Reply Y to receive Redbox deals & news alerts at this #. Opt-in not required to rent/buy.” The texts contained a link to the Redbox website. The complaint asserts that by labeling the second text message as a “recurring autodialed marketing” message, Redbox has implicitly conceded that the text messages are automatic.
According to the complaint “[b]y effectuating these unauthorized text message calls (… “wireless spam”…), Defendant has violated consumers’ statutory and privacy rights and has caused consumers actual harm, not only because consumers were subjected to the aggravation and invasion of privacy that necessarily accompanies wireless spam, but also because consumers have to pay their cell phone providers for the receipt of such wireless spam.”
Plaintiff seeks to enjoin Redbox from all future “wireless spam activities” along with a minimum of $500 for each violation of the TCPA in statutory damages, plus costs and attorneys’ fees.
It is no exaggeration to say that hardly a week goes by without another new TCPA class action complaint being filed. This case is in its early stages, but the lesson for advertisers is nonetheless the same: Remember that the TCPA forbids not only autodialed and/or prerecorded phone calls without consent; it applies equally to mass text message campaigns as well, with additional rules for messages that are considered marketing.