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FTC Approves Four Final Consent Orders Barring Companies from Making False All Natural Claims on Personal Care Products七月 18, 2016
On July 13, 2016, the Federal Trade Commission (FTC) announced that it had approved final consent orders against four companies that allegedly misrepresented their products as “All Natural” or “100% Natural,” despite the fact that the products contained synthetic ingredients. These actions mark the first time that the FTC has weighed in on “natural” claims made on personal care products. Notably, the FTC expressly declined to prohibit the term “natural” in an advertisement if a product contains some level of synthetic ingredients, explaining that it did not “have evidence that consumers necessarily interpret ‘natural’ to mean ‘all natural’ or no synthetic ingredients.
The FTC filed an administrative complaint against a fifth company, California Naturel, Inc., but in its initial status report, notified the Administrative Law Judge that it had reached settlement terms with the company’s counsel.
- Trans-India Products, Inc., doing business as ShiKai: The FTC alleged that the respondent marketed the “All Natural Hand and Body Lotion” and the “All Natural Moisturizing Shower Gel” directly and through third-party websites. According to the FTC, the respondent’s “all natural” representations were false or misleading because the products contained some or all of the following synthetic ingredients: Dimethicone, Ethylhexyl Glycerin, and Phenoxyethanol.
- Erickson Marketing Group, Inc., doing business as Rocky Mountain Sunscreen: The FTC alleged that the respondent advertised “Face Stick SPF 60 All Natural Sunscreen” and “Face Stick SPF 60 Kids All Natural Sunscreen” on its website. According to the FTC, the respondent’s “all natural” representations were false or misleading because the products contained the following synthetic ingredients: Dimethicone, Polyethylene, Butyloctyl Salicylate, and Neopentyl Glycol Diethylhexanoate.
- ABS Consumer Products, LLC doing business as Eden Bodyworks: The FTC alleged that the respondent made “all natural” claims directly and through a third-party website pertaining to its “Coconut Shea All Natural Curl Defining Cream,” “Coconut Shea All Natural Leave In Conditioner,” “Coconut Shea Styling Elixir,” “Jojoba Monoi Moisturizing Shampoo,” and “Jojoba Monoi Revitalizing Conditioner.” According to the FTC, the respondent’s “all natural” representations were false or misleading because the products contained a range of synthetic ingredients, including: Polyquaternium-7, Phenoxyethanol, and Caprylyl Glycol.
- Beyond Coastal, LLC: The FTC alleged that the respondent used its website to sell “Natural Sunscreen SPF 30.” According to the FTC, the respondent’s “100% natural” representation regarding this product was false or misleading because it contained the synthetic ingredients Dimethicone and Caprylyl Glycol.
- California Naturel, Inc.: The FTC alleged that the respondent used its website to sell “Sunscreen SPF 30.” According to the FTC, the respondent’s “all natural” representation regarding this product was false or misleading because it contained the synthetic ingredient Dimethicone.
The FTC unanimously approved the final consent orders, wherein the companies agreed not to misrepresent the following when advertising, promoting, or selling their products:
- Whether a product is all natural or 100% natural;
- The extent to which a product contains any natural or synthetic ingredient or component;
- The ingredients or composition of a product; or
- The environmental or health benefits of a product.
The final consent orders also require each of the companies to possess and rely upon “competent and reliable evidence” to substantiate the claims that they make about a product’s ingredients, environmental benefits, or health benefits, which is defined as “tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that have been conducted and evaluated in an objective manner by qualified persons, using procedures generally accepted in the profession to yield accurate and reliable results.” If the professionals in the relevant area would require “reliable scientific evidence,” the companies are no longer allowed to rely on “other evidence” but must instead offer evidence from one of the other four categories: tests, analyses, research, or studies.
The final consent orders have a 20-year enforcement period. They also impose recordkeeping requirements as well as reporting requirements regarding compliance.
Response to Comments
The FTC sought public comments prior to finalizing the consent orders. One commenter advocated that products should not be represented as “natural” if they contain any amount of synthetic ingredients, implying (said the FTC) that the consent agreements should prohibit the claim “natural” unless the product is “all natural” (i.e., contains no synthetic ingredients). The FTC declined to adopt this broader prohibition, explaining that it did not have evidence suggesting that consumers interpret “natural” and “all natural” interchangeably. However, according to the FTC, the requirement that advertising claims be true and not misleading means that if a reasonable consumer would interpret an advertisement touting a product as “natural” to mean that the product is “all natural,” the claim would violate the order. The FTC noted that the advertisement would be evaluated “as a whole.” This suggests that if a company advertised a product containing synthetic ingredients as “natural” and paired that term with other language or images implying that the product was 100% natural, it would violate the terms of the order.
The approval of the final consent orders follows the recent closure in May 2016 of the comment period on whether the U.S. Food and Drug Administration should define the term “natural” in food labels.
In these actions, the FTC focused mainly on the modifiers “100%” and “all” in “100% natural” and “all natural” rather than the “natural” alone. As most companies know by now, however, the term “natural” has been the subject of substantial consumer litigation. These enforcement actions underscore that the use of the term “natural” in advertising is not immune from FTC scrutiny.
This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Katrina Robson, an O'Melveny partner licensed to practice law in California and the District of Columbia, Hannah Chanoine, an O'Melveny counsel licensed to practice law in Massachusetts and New York, and Tristan Bufete, an O'Melveny associate licensed to practice law in California, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.
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