The Federal Trade Commission (“FTC”) recently announced the settlement of a pending deceptive advertising action with Carrot Neurotechnology, Inc. (“Carrot”). According to the FTC, since 2012, Carrot “advertised, labeled, offered for sale, sold and distributed the Ultimeyes software application to consumers. . . . According to its website . . . Ultimeyes is ‘scientifically shown to improve vision.’” However, according to the FTC, that claim is simply not true. The FTC brought an action against Carrot for deceptive efficacy claims, false establishment claims and deceptive failure to disclose material connections.
What are the terms of the Carrot/FTC Settlement?
Carrot Settles Deceptive Advertising Claims with the FTC
Among the alleged misrepresentations made by Carrot, according to the complaint, are claims that “[o]ur research shows that robust improvements in vision are found after completing 32 sessions with some of the individuals noticing some improvements in less than 16 sessions.” Additionally, according to the FTC’s deceptive advertising complaint, Carrot claimed that “users that have participated in ULTIMEYES studies could read one or two lines better on the Snellen eye chart and experienced a 100% increase in contrast sensitivity.” Carrot also released video advertisements with testimonials provided by “Aaron Seitz, Associate Professor, Psychology.” However, Carrot failed to disclose that Mr. Seitz is the co-owner of Carrot.
Pursuant to the terms of the settlement, Carrot and its principals are prohibited from making representations that any of their products improve vision “unless the representation is non-misleading and, at the time of making such representation, [Carrot] possess[es] and rel[ies] upon competent and reliable scientific evidence to substantiate that the representation is true.” In addition, with respect to any human clinical tests or studies which Carrot may perform in the future, it must “secure and preserve all underlying or supporting data and documents generally accepted by experts in the field . . . .” Pursuant to the terms of the settlement, Carrot will also pay the FTC $150,000.00.
We recently blogged about an FTC settlement with Machinima, Inc. regarding the undisclosed use of paid testimonials in advertising. The FTC has stepped up its enforcement of advertising laws and regulations concerning the improper use of product claims and testimonials in marketing. In a statement concerning the Carrot settlement, the FTC noted that “[h]ealth-related apps can offer benefits to consumers, but the FTC will not hesitate to act when health-related claims are not based on sound science.”