Hunton Retail Law Resource

This past week, several consumer actions made headlines that affect the retail industry.

Ohlhausen Named Acting Chairman of FTC

Maureen K. Ohlhausen has been designated Acting Chairman of the Federal Trade Commission. Acting Chairman Ohlhausen joined the FTC as a Commissioner in 2012, after serving in various capacities at the agency from 1997 – 2008.

FTC Settles Charges against Blood Alcohol Content App

The FTC settled claims it brought against the makers of smartphone accessories which purported to accurately measure users’ blood alcohol content (“BAC”).

According to the complaint, Breathometer, Inc., and its CEO Charles Michael Yin really blew it when they claimed that the Original and Breeze Breathometer devices could accurately measure users’ BAC by connecting the devices to smartphones and using a free app.

Product advertising and packaging indicated the devices were registered with the FDA and equated this registration with product efficacy. Breathometer also stated that its products had “law enforcement grade accuracy.” The FTC alleged that these statements were deceptive.

Under the terms of the settlement, the defendants must offer consumer refunds and are enjoined from making false or misleading representations about the efficacy of breathalyzer devices, the health benefits of such devices or the scientific support for any device claims. Defendants also are required to preserve the data underlying any clinical studies they conduct.

Then-Commissioner (now Acting Chairman) Ohlhausen filed a concurring statement stressing that although the settlement requires Breathometer’s future breathalyzer accuracy claims to be substantiated using a subset of the Department of Transportation’s Model Specifications for Devices to Measure Breath Alcohol, this requirement does not create an industry-wide substantiation standard.

Blue Diamond Accused of Deceptive Almond Milk Claims

A consumer has filed suit in Los Angeles County against Blue Diamond Growers, alleging that the company deceptively marketed its Almond Breeze products by misrepresenting the nutritional value of almond milk, implying that it is at least as nutritious as dairy milk. The complaint alleges that almond milk is not as nutritious as dairy milk and that Almond Breeze should more properly be labeled as “imitation milk.”

Class Action Alleges L’Oreal and Subsidiary Falsely Labelled Hair Care Products

L’Oreal and its subsidiary Matrix Essentials have been accused in lawsuits of falsely advertising the Keratindose or Pro-Keratin line of hair products. The complaint alleges that none of Matrix’s Keratindose products actually contain keratin, despite numerous representations about the qualities and formulations of the products.

Cheese Companies Get $1 Million in Fines, 3 Years Probation for Selling Adulterated Product

Two cheese companies have pled guilty to charges that they mislabeled, packaged and sold adulterated cheese. A Pennsylvania federal judge has given Universal Cheese & Drying, Inc., and International Packing, LLC, 36 months of probation and ordered each to pay a fine of $500,000.

In October 2015, the companies were charged with mislabeling imitation Parmesan and Romano cheese as “real,” despite including wood pulp. Company executive Michelle Myrter pled guilty to a misdemeanor charge of violating the Federal Food and Drug and Cosmetic Act in February 2016.

Procter & Gamble to Appeal NAD Finding Regarding Diaper Claims

After a complaint by competitor Kimberly-Clark, the NAD has recommended that Procter & Gamble modify or discontinue certain claims related to its “Easy Up” training pants. Kimberly-Clark challenged claims that Easy Ups “do[n’t] leak like ordinary training pants* (*vs. leading value brand, based on size 2T-3T),” are “the best way to potty-train” and are “the easiest way to underwear.” The NAD also examined whether P&G’s ads implied that Easy Ups do not leak “unlike all the other ‘ordinary’ brands,” and whether Easy Ups make potty-training easier than other training pants.

According to the NAD, P&G failed to provide any evidence to support its claims that Easy Ups are the “best way to potty-train” and that they are “the easiest way to underwear.” As a result, the NAD recommended that P&G modify its advertising to avoid making these unsubstantiated claims. The NAD also recommended that P&G clarify its leakage claims to make the comparison to value brands more obvious, and to explain that Easy Ups merely leak less than other training pants.

Despite agreeing to revise its “best way to underwear” and “doesn’t leak” claims, P&G says it will appeal the recommendation regarding “the easiest way to underwear” to the National Advertising Review Board, arguing that it is mere puffery.

NAD Inquiry Leads to Revisions of Celebrity Endorsements on Social Media

After an investigation by the NAD, FitTea LLC has revised celebrity endorsements to better communicate the promotional nature of its social media posts. The NAD investigated FitTea during the course of its routine ongoing monitoring program, focusing on paid postings by various members of the Kardashian family. FitTea responded to the NAD inquiry by altering the celebrity endorsements to comply with the FTC endorsement guidelines.