On December 5, 2016, the Federal Trade Commission (“FTC” or “Commission”) issued an opinion finding that California Naturel, Inc. (“CNI”) had violated the FTC Act by falsely marketing its sunscreen products as “all natural,” despite the presence of a synthetic substance. CNI sought to avoid summary judgment by arguing that after the FTC had commenced the underlying investigation, CNI added disclaimers to its webpage which cured any alleged deceptive representations. However, the FTC noted that the disclaimers were posted on the bottom of the webpage, well below the product ingredients list, and even below the “Add to Cart” button. As a result, the FTC found the disclaimers to be insufficient to defeat a claim of misrepresentation.
Why did the FTC Find CNI’s All-Natural Claims Misleading?
All-Natural Marketer Violated the FTC Act
CNI marketed its sunscreen as “All Natural.” Although CNI’s sunscreen product did contain natural ingredients, 8% of the sunscreen was composed of a synthetic substance. In finding that CNI violated the FTC Act, the Commission observed:
[CNI] also argues that there is no regulatory definition that specifies the percentage of natural ingredients required in order to describe a product as “natural.” While true, this argument misses the mark. [CNI] does not merely claim that its product is “natural”; it expressly asserts that its sunscreen is “all natural” and that it “uses only the purest, most luxurious and effective ingredients found in nature.” By [CNI’s] own admission, that is not true.
In holding that CNI violated the FTC Act, the FTC issued an order prohibiting CNI from misrepresenting the ingredients of its products as “all natural” in the future where such products contain synthetic substances. In addition, the Commission warned CNI that it must always have competent and reliable evidence to support any claims that its products are “natural” or beneficial to health.
FTC scrutiny of “all-natural” product claims has intensified. We recently blogged about four separate settlements that the FTC reached with other “all-natural” marketers. In this regulatory climate, it is imperative that all natural marketers review their marketing and information collection practices with experienced and competent counsel.