This week, the California Attorney General announced a settlement involving allegations that Gatorade made misleading claims about the relative performance benefits of Gatorade and water in a mobile game that was targeted to teens.

Players controlled a cartoon version of Olympic Gold Medalist Usain Bolt, and ran a race to recover gold coins

stolen by pirates. When the Bolt avatar touched a Gatorade icon, it would run faster and the “fuel meter” increased. But when the avatar touched a water droplet, it would slow down and the “fuel meter” decreased. There were more overt claims, too. The instructions at the start of the game urged players to “Keep Your Performance Level High By Avoiding Water.”

According to the AG’s complaint, the express and implied claims that Gatorade will increase athletic performance, while water will decrease it, were false and misleading, in violation of California law. And in the press release, the AG went further stating that “making misleading statements aimed at our children is beyond unlawful, it’s morally wrong and a betrayal of trust.”

As part of the settlement, Gatorade will pay $300,000, part of which will be used to fund research or education on water consumption and the nutrition of children and teens. In addition, the settlement requires Gatorade to disclose endorser relationships in any social media posts and prohibits the company from advertising its products in media where children under 12 comprise more than 35 percent of the audience. The settlement also prohibits the company from negatively depicting water in any ad.

Companies need to be careful when suggesting that their products will improve performance or that competing products will hinder performance. For another case involving beverages and comparative performance claims, check out this post from 2013.