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FTC requirements |
Excerpt From Federal Trade Commission Policy Statement Concerning Advertising Claims.
The Federal Trade Commission (FTC) has issued a statement that articulates its policy regarding the legal requirement pursuant to Section 5 of the FTC Act. This policy requires that advertisers and ad agencies have a responsible basis for their objective claims before their initial dissemination. The following is an excerpt.
The Reasonable Basis Requirement:
First, we re-affirm our commitment to the underlying legal requirement of advertising substantiation - that advertiser's and ad agencies have a responsible basis for advertising claims before they are disseminated.
Standards For Prior Substantiation:
Many ads contain, express or imply statements regarding the amount of support the advertiser has for the product claim. When the substantiation claim is express (e.g., "tests prove", "doctors recommend", and "studies show"), the Commission expects the firm to have at least the advertised level of substantiation. Of course, an ad may imply more substantiation than it expressly claims or may imply to consumers that the firm has a certain type of support. In such cases, the advertisers must present the amount and type of substantiation the ad actually communicates to the consumers.
Absent an express or implied reference to a certain level of support and absent other evidence indicating what consumer expectations would be, the Commission assumes that consumers expect a "reasonable basis" for claims.
Procedures For Obtaining Substantiation:
The Commission has determined that in the future it will rely on nonpublic requests for substantiation directed to individual companies via an informal access letter or, if necessary, formal civil investigative demand.
Relevance Of Post Claim Evidence In Substantiation Cases:
The Reasonable Basis Doctrine requires that firms have substantiation before disseminating a claim. The Commission emphasizes that as a matter of law, firms lacking a reasonable basis before an ad is disseminated violate Section 5 of the FTC Act and are subject to prosecution. Advertisers will not be allowed to create entirely new substantiation simply because their prior substantiation was inadequate.
Self Regulation Groups And Government Agencies:
The Commission will not necessarily defer to an arbitration by a self regulation group. An imprimatur from a self regulation group will not automatically shield a group from Commission prosecution.
Note: Confer with Legal Council in all matters concerning meeting FTC product claims guidelines
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