Learn From How The FTC Approaches Your Competitors’ Advertising!

Earlier this week, the FTC approved a final Order settling charges against Beiersdorf, Inc. relating to marketing claims for its Nivea My Silhouette! skin cream product. The Decision and Order can be found on the FTC’s website along with a copy of the Complaint. What can be learned from this case?  First, don’t believe that just because your competitors’ products have not been questioned by the FTC, your products are immune from review.  Second, there can be serious financial repercussions for making questionable claims.  According to Section V of the Order, Beiersdorf is required to pay $900,000 to the FTC to settle this matter.  Third, in addition to being concerned about whether your more traditional types of marketing are compliant, you need to be careful about the types of keywords that you are purchasing to promote your products.  As noted in the Beiersdorf matter, the FTC complained about the purchase of terms, such as “stomach fat” and “thin waist.” Finally, while the matter may be over, Beiersdorf is now under Order with the FTC (the violation of which will trigger significant financial penalties) and has agreed to be monitored by the FTC for five years with regard to certain future claims.  While such monitoring provisions are not new, companies often forget about how invasive these provisions can be as it allows the FTC, “upon reasonable notice and request” to ask for, among other things, substantiation for the subject claims.  In other words, unlike in civil litigation, the matter is far from being over even though a settlement has been reached. Learn from how the FTC settled matters with others in your field and consider the significant disruptions, both financial and otherwise, that can result if your company makes unsupported or questionable claims.

Scott R. Bialecki

Scott Bialecki, a former FTC attorney and IP litigator, is the co-Chair of Sheridan Ross P.C.'s Litigation Group.