On Monday, the Federal Trade Commission (“FTC”) announced that it had settled claims against the marketer of two app-supported smartphone accessories allegedly advertised as having the ability to accurately measure a consumer’s blood alcohol content (“BAC”). The apps offered by Breathometer, Inc. (“Breathometer”), as well as its founder, were featured on the television show “Shark Tank.” As a result of his appearance on Shark Tank, Breathometer’s founder was able to obtain initial financing for his Breathometer app. Breathometer offered two versions of the app, an original and an upgraded “law-enforcement grade product.” According to the FTC, however, neither app had been “adequately tested for accuracy” by the company. After undertaking its investigation, the FTC commenced a false action against Breathometer and its founder in the United States District Court for the Northern District of California, which was then immediately settled.
Why did the FTC Find Breathometer’s Marketing Misleading?
Breathometer Settles False Advertising Claims with the FTC
According to the FTC’s complaint, not only were the apps inadequately tested, but Breathometer and its founder were aware that the upgraded version of the app “regularly understated BAC levels.” Nevertheless, Breathometer advertised the apps as having been “government-lab grade” tested.
Under the terms of the settlement, Breathometer and its founder are barred from making future accuracy claims for consumer breathalyzer products unless and until such claims are supported by “rigorous testing.” Breathometer must also: 1) notify all consumers who purchased either of the apps about its false advertising claims; and 2) pay full refunds to consumers who purchased either of the apps.
Despite changes at the top levels of the FTC, the regulatory agency still has a mandate to enforce federal advertising laws and regulations, which it is expected to continue to vigorously pursue. Just two weeks ago, we blogged about the FTC’s joint-action with the New York State Attorney General’s Office against marketers of a dietary supplement involving claims of false advertising. In this regulatory climate, it remains imperative that marketers consult with competent counsel to ensure that their respective advertising practices are compliant with federal and state laws and regulations.