On June 30, 2014, the Federal Trade Commission (“FTC”) issued a press release announcing that it had entered into a settlement with cosmetic manufacturer L’Oreal USA (“L’Oreal”). Following an investigation and prior to entering into the settlement, the FTC was prepared to file a complaint alleging that L’Oreal had deceptively advertised that certain of its products provided “anti-aging” benefits to consumers. These claims were unsubstantiated by L’Oreal and, the FTC alleged, based on flawed consumer satisfaction surveys. Although there is no monetary penalty, L’Oreal will be bound by the terms of its settlement with the FTC for the next twenty (20) years.
L’Oreal’s Alleged Deceptive Advertising
The FTC’s complaint against L’Oreal alleged that between February 2009 and April 2013, L’Oreal advertised that its Lancome Genifique products were “clinically proven” to produce “perfectly luminous” skin by boosting gene activity in consumers. L’Oreal made similar claims in connection with the advertising of another one of its products. However, the clinical “proof” L’Oreal relied on to make such claims was produced from questionnaires that it had sent to 34 consumers with, as the FTC alleged, ambiguous questions designed to elicit misleading responses. The FTC alleged that L’Oreal’s advertising of these two particular products was deceptive, misleading and false, and that “[i]n fact, scientific studies do not prove the representations” made by L’Oreal in its advertising.
L’Oreal has agreed that it will no longer make any advertising claims that its products boost gene activity to make skin look or act younger, or that its products respond faster to aggressors like stress, fatigue and aging, “unless the company has competent and reliable scientific evidence substantiating such claims.” L’Oreal has also agreed to cease making advertising claims about its products that misrepresent the results of any test or study.
The settlement agreement is subject to public comment until July 30, 2014. Thereafter, the FTC will decide whether to give the settlement agreement final approval.
As we have previously noted, the FTC has been aggressively monitoring and targeting the marketing practices of United States manufacturers, resulting in some substantial monetary judgments. (See FTC Settles Deceptive Advertising Lawsuit with Mobile Marketer for $4 Million, FTC Awarded Full Amount of Net Sales in False Advertising Lawsuit). The FTC has been especially watchful of deceptive advertising used to promote consumer heath related products (See FTC Aggressively Targeting Health Supplement Advertising, Marketers of Weight-Loss Products Targeted by FTC).