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Brand Protection & Advertising

Stay ADvised: 2024, Issue 10

Brand Protection & Advertising Law News
05.21.24
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In This Issue:

NAD Melts Away Fenty's Jelly Oil Endorsements, Finding Them Insufficiently Conspicuous

In a self-monitoring challenge to skincare brand Fenty and its marketing for its Melt AWF Jelly Oil Makeup-Melting Cleanser, NAD weighed in on the appropriateness of disclosures for certain social media endorsements as well as on the company's claims that the product "melts" makeup away.

NAD delved into product demonstrations posted variously on TikTok and Instagram by Crème Fatale, a drag artist and influencer who has endorsed Fenty Jelly Oil, and by "independent product reviewer" Sarah Novio.

NAD noted that (following its inquiry) Crème Fatale added a "Paid Partnership" disclosure above the video (using the IG disclosure tool), and that Crème Fatale further added #ad and #sponsored in the video descriptions during the proceedings (as did Fenty—albeit Fenty added #ad as the first element in the caption).

Nonetheless, NAD found that these disclosures by Crème Fatale were insufficient to alert consumers to the material connection between Fenty and the influencer contracted to create content, a connection "that would not reasonably be expected by the audience and would likely affect the weight…of the endorsements."

Given the video content, the use of "paid partnership" to alert viewers to the material connection wasn't enough to satisfy the FTC's clear and conspicuous requirement. NAD repeated the FTC's caution that "relying on social media built-in tools alone may not be enough and that they are more effective when used in conjunction with other clearer forms of disclosure"—here, an additional disclosure in the video itself given the visual medium employed. NAD further noted that the use by Crème Fatale of #ad and #sponsored in the caption of the post fell short because the disclosures appeared in the fourth line of the caption and could only be viewed if the consumer clicked on the "more" link. Because consumers could therefore easily miss them, these disclosures were not clear and conspicuous. 

Regarding Fenty's repost, NAD approved of the #ad placement but said inclusion of a video disclosure here too was necessary to satisfy the clear and conspicuous requirement.

Similarly, influencer and "independent product reviewer" Sarah Novio also posted about the Jelly Oil. Unlike Crème Fatale, she was not hired by Fenty but she had been provided free product and the company reposted her video. Ms. Novio included a "gifted" disclosure in her caption on TikTok but not on Instagram, and Fenty's repost did not include the disclosure.

Again, NAD found more was necessary—noting as it has before that providing an influencer with free product qualifies as a material connection that requires disclosure. NAD accepted Fenty's clarification that it had asked Ms. Novio to include a clear disclosure that she got the product for free, and said that it will repost the post only after she adds that disclosure.

NAD also examined express claims the company made about the efficacy of the product and the study backing up those claims. Other than a "clean" claim, which the company discontinued during the pendency of the proceedings, NAD found these monadic claims largely supported.

Fenty initially made the claim that "[f]rom longwear or waterproof makeup, sunscreen, dirt, oil + impurities, melt that… all AWF in one go 100%." Significantly, during NAD's review, Fenty modified the claim to remove both "all" and "100%." NAD reviewed the claim as modified, which relied on both in-lab supervised testing and at-home consumer use surveys that showed that 94% of 52 subjects strongly agreed that the product removes dirt, 98% strongly agreed that the product removes oil and 88% strongly agreed that the product removes impurities.

NAD found the objective (expert-graded) study and consumer-use surveys reliable—noting that although Fenty tested makeup removal only five minutes after application, makeup adherence only weakens with time making five minutes a consumer-relevant time point for testing even if not directly correlated to the way consumers would use the product. NAD also found the study and survey to be a good fit for the modified claim.

Fenty also claimed its "unique jelly texture gently delivers clean, nourished + conditioned skin without the stripping or drying." NAD found this claim substantiated by "corneometer" (moisture) measurement taken after cleansing an otherwise makeup-free face—accepting the advertiser's explanation that use on a "clean" face prevented confounding (and indeed superior) results that would be achieved if moisture were measured after cleaning a face full of makeup. The claim was further corroborated by the results of the consumer use study, with "92% of users strongly [agreeing that] the product conditions skin and leaves skin feeling nourished."

Finally, NAD analyzed a claim about the 52-person study that Fenty utilized in its advertising: "after 1 use 100% agree it gently cleanses skin leaving it clean and fresh, 98% agree it removes #HYDRAVIZOR SPF 30 Moisturizer and 98% agree skin feels deeply cleansed, nourished and supple." Here too Fenty made a significant modification during the proceeding—adding to the claim the prefix that "in a study of 52 people after 1 use, xx percent found, etc." As qualified by size and use, NAD found that the study supported the message conveyed that consumers are satisfied with this product and think it works for these specific attributes.

Key Takeaways

This case has a little bit of everything—cosmetic efficacy claims often require both objective and subjective evidence (to ensure the best chance of passing muster). Beware of any performance claim that promises absolute (100%) results. And when it comes to influencers and disclosures, NAD and FTC keep upping their wish list. More is definitely better—at least from a regulatory perspective.

 

Class Action Suit Pins False Reference Pricing on Home Depot

Picture this: your washer at home is on the fritz, and you decide it's time to buy a new machine. You head over to a leading home improvement retailer website and are excited to see that the Samsung Top-Load Washer is listed for $578, which according to the website is a 35% discount from the original price of $899. You buy the washer and feel good about the purchase, like you got a deal.

Except you find out later that this was hardly the deal you had understood it to be, as the washer had never been listed at the "original" price quoted on the website.

This is what plaintiff Jason Londrigan claims happened to him, and he and co-plaintiff Eric Berger have filed a class action lawsuit against Home Depot in Georgia federal court accusing the company of perpetrating a "false reference scheme on a massive scale."

The complaint alleges that the world's largest home improvement retailer has been falsely advertising a fictitious "original" price and offering products at a purportedly much lower price "under the guise of a sale." According to the complaint, Home Depot advertised items at discounted prices when they were actually available at the lower price for over three months and, in some cases, had never been offered at the advertised "original" price at all.

The complaint lays out the economic and legal theory underpinning false reference pricing lawsuits, explaining that the "artificial price disparity misleads consumers into believing that the product they are buying has a higher market value than the price offered, thereby inducing them into purchasing the product at what appears to be a 'bargain.'" The plaintiffs argue that customers will pay more based on a false impression of the products' value, thereby enabling retailers "to sell products above their true market price and value—to the detriment of consumers."

Home Depot's "consumer deception campaign" violates Georgia and federal law, say plaintiffs. The Georgia Fair Business Practices Act specifically prohibits false advertising related to the amount of or reason for price reductions and bars the making of "false or misleading statements about sale prices," including advertising an item at a sale price when it's been offered for sale at that price for a month. Additionally, the complaint states that the FTC's Guide Against Deceptive Pricing states that "where an artificial, inflated price was established for the purpose of enabling the subsequent offer of large reduction[,] the 'bargain' being advertised is a false one; the purchaser is not receiving the unusual value he expects."

The complaint alleges that plaintiffs purchased the products in reliance on Home Depot's misleading reference price and motivated by the "false belief" that they were getting a bargain. The remedies sought include class certification; actual, statutory, and punitive damages; and injunctive relief against Home Depot.

Key Takeaways

Deceptive pricing claims continue to gain class action steam and regulatory scrutiny. Although it is difficult to keep abreast of state-by-state legislation on point, it is possible to avoid claims by making sure that sales are not continuous, that products were offered for sale at the "original" or reference price for a reasonable period of time prior to the "sale," and—in a perfect world—that items were actually sold at that price.

 

Products May Be Sugary, But Claims Are Mere Puffery, Finds Judge Dismissing Dole False Ad Suit

It's not false advertising, it's mere puffery, found the court that dismissed a class action lawsuit accusing Dole Packaged Foods of falsely advertising that its sugar-filled fruit cups are healthy.

Plaintiffs alleged in California federal court that Dole falsely advertised a number of its "fruit" products, such as Fruit Bowls in Gel, Fruit Bowl Parfaits, and Canned Fruit in Heavy Syrup. According to the complaint, Dole misled consumers by giving the false impression that the products are healthy when they are full of sugar.

Dole claimed that consumers should "experience our healthy and delicious ingredients," that it "promise[s] [that these products will] provide everyone, everywhere with good nutrition!" and that the products "help[] support a healthy immune system." Plaintiffs also called out the claim that the product contains "Vitamin C" that can "support a healthy immune system."

According to plaintiffs, these claims are false because the products get anywhere from 29% to 96% of their calories from sugar, and "a vast body of reliable scientific evidence establishes that excessive consumption" of sugar is toxic and unhealthy.

But Judge Haywood S. Gilliam Jr. of the Northern District of California largely sided with Dole, not only finding that the claims were mere puffery but concluding that other claims were preempted as well, largely crippling the class action lawsuit that had sought to find Dole liable under causes of action including California's Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumers Legal Remedies Act (CLRA).

The court first found that the claims that Dole made—"a promise to provide everyone, everywhere with good nutrition" and that the product is "seal[ing] in goodness and nutrition"—are puffery, as no reasonable consumer would rely on these statements as they appear on the label. How do they appear? Beside a claim that reads: "we believe in sunshine for all" next to a rendering of the sun. The key was the placement of the claim beside the "sunshine" comment.

"Interpreting this sentence pairing as anything other than a statement of corporate aspiration would be unreasonable, as would a consumer's reliance on the phrase 'good nutrition' in isolation," wrote the court, basing this reasoning on the precedent that mere puffery is assessed in the context of the whole label.

The court also rejected plaintiffs' counterargument that the statements were misleading because they connoted health although the products are full of sugar. It concluded that the representations never actually "invoked healthiness" but rather "goodness and nutrition," which is an "extrapolation" and not the same thing, according to Judge Gilliam.

The court also agreed with Dole's argument that the Vitamin C claims—"Excellent source of antioxidant vitamin C to support a healthy immune system" and "Vitamin C is an antioxidant that helps support a healthy immune system"—were preempted by the Food, Drug, and Cosmetic Act (FDCA).

Key Takeaways

An interesting take on aspirational advertising, the court's finding of puffery was predicated on the placement of the statements at issue beside a fanciful wish of "sunshine for all." The court noted that had the statements appeared on their own the conclusion might have been different, which raises the question—can advertisers claim puffery as long as statements are accompanied by sunshine and puppies? The short answer: Unlikely.

 

NAD Bites Into Comparative Teeth Whitening Claims

Procter & Gamble (P&G) initiated a challenge at the National Advertising Division (NAD) to claims made by relatively new-to-the-scene teeth whitening competitor HiSmile.

P&G claimed that HiSmile's advertisements conveyed the message that traditional teeth whitening is painful and that the hydrogen peroxide used in those products—including in P&G's Crest Whitestrips—breaks down tooth enamel, impacts gums, and could damage teeth. According to the challenge, the advertising implied HiSmile's product, which employs phthalimidoperoxycaproic acid (PAP), is superior to and safer than Crest Whitestrips.

NAD analyzed the claims in two buckets—safety claims and comparative claims.

P&G argued that HiSmile made express claims about the safety of hydrogen peroxide, specifically that it is "painful" and that there are "nasty side effects" that damage teeth. It cited as precedent an earlier NAD decision, Oral Essentials, Inc. (Lumineux Whitening Strips), which examined similar claims.

HiSmile countered that its claims convey the reasonable message that peroxide products carry a "risk" of adverse side effects, such as sensitivity, pain, and damage to teeth, but that P&G incorrectly asked NAD to find that the challenged claims all amount to "harm." HiSmile also argued that NAD should not find the claims comparative to P&G since there was no explicit mention of P&G or Crest Whitestrips in the advertisements.

NAD first explained—as it has many times before—that based on wording and content a statement can convey comparative message even where the competitor is not explicitly named. It then determined that one reasonable consumer takeaway from the challenged claims about hydrogen peroxide teeth whitening is a comparison to P&G's products, particularly given Crest Whitestrips lead the at-home teeth whitening market.

Further, NAD noted that there is a distinction between claims that highlight a product's benefits versus claims that imply or state that other products are unsafe or pose dangers. It found that here, HiSmile's claims were not simply underscoring the claimed benefits of HiSmile's products, but in the absence of reliable support were also conveying a falsely disparaging message that peroxide teeth whiteners such as P&G's Crest Whitestrips are "painful" and may "damage" teeth and gums.

After reviewing the evidence, NAD concluded that HiSmile's claims about peroxide teeth whiteners were not supported, as the evidence only showed that these teeth whiteners could cause short-term sensitivity, but these side effects were "mild and transient." Given this evidence, NAD found that HiSmile's claims that peroxide-containing whitening products were painful or could damage gums and teeth were not sufficiently narrowly tailored and conveyed an unsubstantiated message. 

NAD concluded that the claim should be discontinued but noted that HiSmile could continue advertising that its products are "peroxide-free."

P&G also challenged comparative claims that HiSmile products are "just as effective" as products containing hydrogen peroxide, and that its PAP ingredient works "similarly" to hydrogen peroxide. HiSmile argued that this statement was merely aspirational and pointed to the fact that it appeared in the company's origin story as support for its argument.

NAD disagreed, reasoning that the claim's plain language conveyed the inherently comparative message that HiSmile's at-home whitening products were just as effective as peroxide teeth whiteners. This message was reinforced by additional language on the same webpage that HiSmile's products "ticked all the boxes." And here again, NAD found these claims comparative to P&G's products even though Crest Whitestrips were not referenced explicitly. Because HiSmile had not provided sufficient evidence to support its claim that PAP whiteners are just as effective as peroxide whiteners, NAD recommended that HiSmile discontinue its claims.

Key Takeaways

The case highlights core NAD principles and should act as a reminder to smaller companies that their claims may not fly under the claims-support radar.

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