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December 15th, 2016
FTC Finds “All Natural” Claim Violated FTC Act
The FTC has issued a Final Order against California Naturel, Inc., a seller and marketer of personal care products, finding that the company's "all natural" claims were false and misleading in violation of the FTC Act. This Order is the latest in a line of recent FTC cases relating to misleading "all natural" or "100% natural" advertising claims. Here are the lessons for brands and their agencies.
In its complaint, the FTC alleged that California Naturel falsely advertised its Sunscreen SPF 30 product as an "all natural" sunscreen, when admittedly eight percent of its sunscreen formula was a synthetic ingredient called dimethicone. The sunscreen itself contained the description "All Natural" and the company's website stated, among other things, that it "uses only the purest, most luxurious and effective ingredients found in nature." After the FTC began its investigation, California Naturel added the following disclaimer on the bottom of the sunscreen webpage: "The FTC requires us to add the following: 'Dimethicone, a synthetic ingredient, is 8% of the sunscreen formula, the remaining 92% are natural products.'"
Disclaimer was insufficient
California Naturel argued that the disclaimer and other portions of its website adequately disclosed that the sunscreen contains the synthetic ingredient. However, the FTC found that the disclaimer "did not change the net impression conveyed to consumers that the product is 'all natural.'" According to the FTC, the disclaimer was too far away from the "all natural" claims - in fact, it was not visible at all without scrolling down and was well below the website's "Add to Cart" button, so that consumers were invited to purchase the product before they saw the disclaimer. Furthermore, consumers had to scroll down the list of ingredients, which were all presented in the same style and font, in order to link to a separate webpage identifying dimethicone as a "silicone-based polymer." Thus, consumers were required to search for information that contradicted what the advertisement "expressly and prominently" conveyed. Moreover, California Naturel continued to market its sunscreen as an "all natural" product and did not otherwise change the representations challenged in the complaint, which conveyed to reasonable consumers that every ingredient in the product was "found in nature." As a result, the FTC concluded that California Naturel's "all natural" claims were false and misleading and in violation of Section 5 and 12 of the FTC Act.
According to the Order, California Naturel must now avoid misrepresenting: 1) that their product(s) are "all natural" or "100% natural"; 2) the extent to which their product(s) contain natural or synthetic components; 3) the ingredients or composition of any of their products; and 4) the environmental or health benefits of any of their products. The company must substantiate any such representations with competent and reliable evidence. The Order also imposes record-keeping, notification and reporting requirements and will remain in effect for 20 years.
The terms of this Order are consistent with the FTC's guidance in recent settlements, as we discussed here, and indicate that the FTC is particularly focused on "natural" claims. As a result, marketers should exercise caution in making "natural," "all-natural" or "100% natural" claims about the content and ingredients of their products, and remember that any such claims must be backed by clear evidence that supports these claims. Disclaimers, as always, should be clear and conspicuous. Moreover, it is critical that all material terms and conditions relating to a product's performance and qualities be presented to the consumer prior to purchase.
If you have any questions about "natural" claims, or about any other advertising law issues, please contact Terri Seligman at (212) 826 5580 or firstname.lastname@example.org, or any other member of the Frankfurt Kurnit Advertising, Marketing & Public Relations Group.
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