Stay ADvised: What's New This Week, January 31
In This Issue:
- FTC Orders Marketers to Stop Falsely Advertising Fake COVID Cures Like It's 2020
- Don't Mess With Texas: AG Paxton Sues Google Over Allegedly Misleading Pixel 4 Endorsements
- Garbage Bags: Sad or Glad? A Cautionary Tale of Collaboration at NAD
FTC Orders Marketers to Stop Falsely Advertising Fake COVID Cures Like It's 2020
Authorized treatments and several vaccines for COVID-19 may be available on the market, but that isn't stopping unscrupulous marketers from riding the Omicron wave (and Delta before that and likely whatever variant comes next) to peddle fake therapies and false cures for the virus.
Now, nearing the start of year three of this pandemic, the Federal Trade Commission (FTC) reminded marketers that it is still paying attention. The agency announced that over the course of 2021 it sent numerous marketers cease and desist letters with the same message: stop the deceptive COVID claims or be prepared to pay.
The letters warn the alleged offenders that they could be on the hook for significant monetary penalties of up to $43,792 per violation under the COVID-19 Consumer Protection Act, which Congress passed in December 2020 to prohibit deceptive advertising of COVID-19-related claims. The FTC announced it sent the letters to over 20 marketers whose ads appeared mostly on social media and also notified the platforms hosting the false claims.
These marketers' deceptive health claims violate the FTC Act because they advertise that their products can "prevent, treat or cure human disease" without competent and reliable scientific evidence and without substantiating the claims at the time they are made, said the FTC. The fact that some marketers included a disclaimer that they weren't claiming to treat or prevent COVID-19 did not sway the FTC from its position.
The claims themselves are all over the map in substance and subject matter. There's water filtered with COVID-19 fighting "electromagnetic signals," ozone and vitamin therapies, "immunotherapy treatments," nasal irrigation, osteopathic treatments, injections, supplements, drugs—including the infamous Ivermectin—and so on and so forth.
Each of the FTC's letters includes multiple examples of the allegedly violative promotions for the advertisers to review. The Commission also sent cease and desist letters to four multilevel marketers over similar types of claims that they sell products capable of treating COVID-19. One letter warned an MLM about earnings claims related to COVID-19 that promoted the company as a means to earn income in the wake of wages lost due to the pandemic.
Way back in 2020—in what feels like forever ago in pandemic years—the FTC saw a surge in deceptive advertising of false COVID-19 treatments and cures. Those deceptions haven't let up.
The Commission wants scammers to know that it hasn't let up either: "Our efforts to stamp out those claims will continue in 2022, and any marketers not heeding our demands can expect to face consequences, including civil penalties," said Samuel Levine, Director of the FTC's Bureau of Consumer Protection.
Don't Mess With Texas: AG Paxton Sues Google Over Allegedly Misleading Pixel 4 Endorsements
The message is clear: fake testimonials will not fly in Texas. Texas Attorney General Ken Paxton has filed a lawsuit alleging that Google misled consumers about its Pixel 4 phone by soliciting fabricated testimonials out of iHeartMedia's Texas DJs.
Per AG Paxton's complaint, the facts are as follows: Google sought to advertise its latest (then soon-to-be-released) Pixel 4 cellphone on the radio in the Dallas/Fort Worth and Houston markets. It hired iHeartMedia to record and broadcast advertisements for the phone featuring testimonials from local radio personalities personally endorsing the product.
The trouble is that Google insisted that the local radio hosts personally endorse the product, even though they'd never used it, according to the allegations. The result, says AG Paxton, is that Google advertised false testimonials.
AG Paxton alleges that Google insisted the radio personalities use its deceptive script. When the iHeartMedia requested that Google send sample Pixel 4 phones to the radio personalities so they could base their testimonials on actual use, AG Paxton avers that Google refused iHeartMedia's attempts to "authenticate" the requested endorsements. According to the complaint, Google cited the unavailability of the phones on the market and loss of advertising airtime should Google ship phones to the local radio personalities.
The Texas ad campaign occurred in late 2019, but AG Paxton alleges that Google repeated the pattern of behavior in early January 2020 in other non-Texas markets. By continuing to broadcast advertisements with "false endorsements and deceptive information," AG Paxton argues, Google is "manipulating the marketplace." He alleges violations of the Texas Deceptive Trade Practices Consumer Protection Act (DTPA) based on Google's alleged false, misleading, and deceptive acts and practices.
The lawsuit claims that Google's deceptive advertisements caused confusion and misunderstanding under the DTPA, and that the company failed to disclose information with the intent to induce consumers into transactions they wouldn't have entered into had they known that the radio personalities had never used the Pixel 4 as represented in the ads. The complaint also takes it one step further, alleging that Google's "continued pattern of behavior demonstrates the blatant disregard Google possesses for true and accurate advertising in the marketing and sale of its products."
The state of Texas seeks an injunction permanently enjoining Google from making deceptive statements that don't reflect the actual opinions of the endorsers and from broadcasting deceptive advertisements.
By pursuing Google over claims of deceptive endorsement, AG Paxton is in theory targeting a practice that is currently much on the minds of regulators and attorneys general. In fact, the first point on the FTC's just-released Guide for Soliciting and Paying for Online Reviews is "don't ask for reviews from people who haven't used or experienced the product or service."
On the flip side, something to consider is AG Paxton's track record of pursuing technology companies the state views as unfriendly to its point of view (it's currently suing Google on another matter, and it has sued Twitter for violations of the same law).
Garbage Bags: Sad or Glad? A Cautionary Tale of Collaboration at NAD
After challenging sandwich and frozen food storage bags at the National Advertising Division (NAD) in a case that resulted in NAD recommending that Ziploc modify a few of its claims, Reynolds Consumer Products is back at it again, challenging claims made by Glad Products Company about its garbage bags co-branded with Clorox.
The challenge concerns claims made by Glad about its "ForceFlex Plus with Clorox Tall Kitchen Drawstring Bags" and "Quick-Tie Tall Kitchen CloroxPro Trash Bags," a collaboration in the refuse-collecting space between Glad and Clorox. The challenged express claims included "It's all clean with Clorox" and "Clorox Eliminates Food & Bacterial Odors." The implied claims are that Glad bags are coated in Clorox and provide antibacterial protection.
The main question before NAD concerned whether Glad's advertisements for these products clearly communicated the specific contribution each brand made to the products given the range of benefits consumers associate with Clorox. NAD considered whether Glad's advertisements, including touting the products' new odor eliminating technology, conveyed unsupported cleaning or disinfecting messages.
NAD determined that Glad's claims in its product packaging did not convey cleaning or disinfecting messages. The ForceFlex Plus with Clorox package featured the Clorox logo in close proximity to the "Eliminates Food & Bacterial Odors" claim and the "Lemon Fresh Bleach Scent" claim.
Reynolds argued that the "prominent" display of the Clorox logo conveyed a message that the bags contain a bleaching or disinfecting agent. But NAD found the package clearly tied the Clorox logo to the odor-eliminating benefit it provides, and that the reference to bleach was obviously part of the product scent and not a function.
For the Quick-Tie bags, NAD similarly concluded the consumers would not be confused, pointing to the fact that the logo used on the Quick-Tie bags was for CloroxPro, a brand district from Clorox.
However, NAD determined that claims on Glad's website that its Clorox co-branded trash bags "keep your home feeling clean and healthy" should be discontinued. NAD concluded that use of the word "healthy" in these advertisements could lead consumers to believe the bags provide a health benefit (e.g., a disinfecting agent), which they do not. Further, use of the word "clean" in this context could convey the message that the Clorox product used in the bags cleans – "not simply that consumers use trash bags to clean." This is also unsupported. NAD was particularly concerned about these messages given the importance to consumers of disinfecting and cleaning claims in light of COVID-19.
NAD also recommended that Glad discontinue a cleaning commercial that depicted a messy kitchen scene ending with a series of "clean" claims—"It's all Clean, with Clorox" followed by "It's all Glad with Clorox" ending with "It's all Clean, it's all Glad." The commercial superimposed the claim "eliminates food & bacterial odor" over the messy kitchen scene, but NAD determined that the reasonable consumer would take away an unsupported cleaning and disinfecting message. A brief, small-font disclosure that "this product is bleach-free" did not suffice to cure the message that the bags provided a disinfecting benefit, said NAD.
Advertisers who co-brand products should ensure that the advertising makes each brand's specific role in the product clear. This is particularly important when the brand is well-known for something that is not part of the advertised product.
And remember, it is the entire context of the advertisement, not just the individual claims, that NAD will use to determine what messages are conveyed.