Quoted

April 18th, 2023

FTC Alerts Nearly 700 Companies About Potential Penalties for Misleading Claims

Advertising Partner Jeffrey A. Greenbaum is quoted in the article, "FTC Alerts Nearly 700 Companies About Potential Penalties for Misleading Claims" published by The Wall Street Journal. The article discusses the recent FTC warnings sent to companies about the penalties they could face if they mislead consumers with substantiated product claims. The new warnings could apply to any marketers' statements about the performance of their products, and is part of a continuing effort to penalize brands that engage in deceptive marketing tactics. Jeff notes that a 2021 Supreme Court decision significantly limited the FTC's ability to seek financial damages for customers affected by such practices, but that the agency still has ways to take action. He is quoted saying, "The FTC can still penalize advertisers. While it only has the authority to seek $50,120 for any given violation, penalties could total millions or even hundreds of millions of dollars because of the way violations are counted. As a general matter, if 10 consumers see a deceptive ad, that’s 10 violations. These numbers can add up very quickly."

In conclusion, Jeff says, "The letter is likely to prompt many brands to review their marketing strategies even if they didn’t receive one directly. Companies on the list are at a disadvantage, however, because parties are only subject to penalties if they have already received such a notice."

Read the full article here.