On Wednesday, the Federal Trade Commission (“FTC”) announced its settlement with four separate companies, each alleged to have falsely advertised its respective products as “all-natural.” The products, including sunscreen, shampoo, and body lotion, are all alleged to have contained some synthetic ingredients despite the companies’ claims that such products are “all-natural.”
What are the Settlement Terms for Falsely Advertising Products as “All-Natural?”
FTC Settles False “All-Natural” Claim Investigations
Pursuant to the terms of the settlement agreements, each of the companies is prohibited from making any claims regarding the “natural” ingredients of their respective products “unless the representation is non-misleading, including that, at the time such representation is made the [company] possesses and relies upon competent and reliable evidence . . . .” Fortunately for the companies, none are required to pay any damages or penalties.
We recently blogged that the FTC has been cracking down on false advertising campaigns across the country. Although the subject four companies avoided paying damages to the federal government, the penalties typically sought in such actions, whether initiated by the FTC or state regulators, can be quite severe. Because of this risk, it is important for marketers to engage competent counsel prior to commencing any advertising campaign, particularly those involving all-natural claims.