In a final order, the Federal Trade Commission granted summary decision against California Naturel, Inc. for falsely advertising its sunscreen products as "all natural" when a synthetic ingredient constituted eight percent of the formula.

Despite the presence of dimethicone, the company promoted its "all natural" sunscreen with claims that it contained "only the purest, most luxurious and effective ingredients found in nature." The Commission issued an administrative complaint asserting violations of Sections 5 and 12 of the Federal Trade Commission Act and moved for summary decision.

California Naturel admitted that eight percent of its sunscreen product contained the synthetic ingredient, but argued that its advertising was not false or misleading. As of early 2016, the company added a "readily visible" disclosure statement on its website, notifying consumers about the presence of dimethicone. The disclaimer stated: "The FTC requires us to add the following: Dimethicone, a synthetic ingredient, is 8% of the sunscreen formula, the remaining 92% are natural products."

The three-member Commission first considered what claims the advertiser conveyed in its marketing. Finding the message "clear from a facial analysis," the FTC said it was undisputed that the sunscreen was marketed as "all natural" and rejected California Naturel's contention that the disclaimer transformed that message.

"The sunscreen itself continues to state it is 'all natural,'" Chairwoman Edith Ramirez wrote for the Commission. "And California Naturel continues to prominently display the 'all natural' language … on its website. Adding a disclaimer to the bottom of the webpage that is well removed from the proximity to the 'all natural' claims—and, in fact, not visible at all without scrolling down—does not change the net impression conveyed to consumers that the product is 'all natural.'"

As the disclaimer appeared "well below" the website's "Add to Cart" button, consumers were invited to purchase the product before they even saw the disclosure, in contravention of the agency's "Dot Com Disclosures" guidelines.

The chairwoman maintained that her analysis was particularly applicable to the advertiser's claims prior to September 2016 when it added the disclosure, but remained on point even after the disclaimer was added. Commissioner Maureen Ohlhausen dissented on this point, arguing that the question of whether the later-added disclosure adequately qualified the claim was a genuinely disputed material fact and not appropriate for summary decision. But the majority disagreed, writing that "declining to address the disclaimer's sufficiency could create the misimpression that the disclaimer cures the deception."

California Naturel also pointed to its list of ingredients, which included dimethicone, but the list "does nothing to dispel the net impression that the sunscreen is 'all natural,'" the FTC said. "All of the ingredients are in the same font and font size, and nothing on the face of the list identifies dimethicone as a synthetic ingredient."

Even though a consumer could click on the word "dimethicone" to identify the ingredient as a "silicone-based polymer," this was insufficient, the agency added. Case law has established "that it is reasonable for a consumer to rely on express claims, and thus that they should not be required to search for and dig out information that contradicts what an advertisement expressly and prominently conveys," Ramirez wrote.

The FTC also found that the claims were false and misleading (based on the advertiser's admission that the formula contained eight percent synthetic ingredient) and that the "all natural" claims were express and therefore presumptively material, notwithstanding the fact that no regulatory definition specifies the percentage of natural ingredients required to qualify a product as "natural"—a point made by the advertiser—that "misses the mark," the agency said. "California Natural 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 California Naturel's own admission, that is not true."

As a remedy, the Commission prohibited the advertiser from making the kinds of misrepresentations alleged in the complaint. Specifically, California Naturel is banned from misrepresenting: "(a) whether a product is all natural or 100% natural; (b) the extent to which a product contains any natural or synthetic ingredient; (c) the ingredients or composition of a product; and (d) the product's environmental or health benefits. To ensure that representations about ingredients are not misleading, California Naturel must have competent and reliable evidence supporting its claims about the content and ingredients of the product."

To read the final order and opinion in In the Matter of California Naturel, Inc., click here.

Why it matters: Advertisers are on notice that the FTC is taking a hard look at "all natural" claims. The case against California Naturel was one of five actions taken against the makers of personal care products over "100% natural" or "all natural" claims despite the presence of synthetic ingredients. The takeaway for advertisers? "'All natural' or '100 percent natural' means just that—no artificial ingredients or chemicals," Jessica Rich, Director of the FTC's Bureau of Consumer Protection, said in a statement. "Companies should take a lesson from these cases."