Natural Products Insider

NOV-DEC 2018

INSIDER is the leading information source for marketers, manufacturers and formulators of dietary supplements, healthy foods and cosmeceuticals. Since 1997, INSIDER has been serving the needs of the global nutrition industry.

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46 INSIDER November/December 2018 Some companies are under the impression that if they obtain an endorsement from a consumer (a testimonial) or if they fi nd out a celebrity uses their products, they are free, without limitation, to use the endorsement or to discuss the celebrity in their advertising, marketing or social media. In fact, use of endorsements from both "ordinary people" and from celebrities has many restrictions, and if a company is not careful in following the rules, it may fi nd itself the target of an FTC investigation or the defendant in a lawsuit brought by the celebrity. FTC also may review the endorsements of bloggers and social media infl uencer campaigns. Indeed, FTC has found liability on the part of an endorser, so they, too, would be well-advised to understand what they are offering and the potential consequences. FTC regulates product a dvertising, including that which appears in social media. FTC has published several guides and other information concerning the use of endorsements, and companies, bloggers and infl uencers considering the use of or making endorsements would be wise to review the guides and consult with competent legal counsel. FTC has three general principles applicable to endorsements. First, endorsements must be truthful and nonmisleading. An endorsement must refl ect the endorser's actual experience and opinion. An endorsement, however, cannot make objective claims for a product that require evidence that the company does not possess. When a company uses an endorsement in advertising, that endorsement is a claim requiring substantiation, not substantiation itself. This is the case even if the claim is absolutely verifi ed as true for the specifi c endorser. For example, an endorser may write to a company stating that the product relieved menstrual cramps, but if the company does not have scientifi c data supporting the claim, then the endorsement cannot be used. In addition, FDA views endorsements as "evidence of intended use," so it would object to any dietary supplement product claim relating to disease or health conditions because that may cause a product intended to be marketed as a dietary supplement to be an unapproved drug. Second, when making or using endorsements claiming specifi c results, the results related by the endorser must be typical of what other people using the product should expect. If they are not, it may still be possible to use the endorsement if the results most people can expect when using the product are clearly disclosed. General disclosures, such as "results may vary" are no longer accepted by FTC. The commission now requires that specifi c informative disclaimers be used. For example, a person endorsing a weight loss dietary supplement may have verifi ably lost 50 pounds in a four-month period. If, however, the company can only substantiate that most people using the product lose 10 pounds in four months, the endorsement must be accompanied by a prominent statement along the lines of "most people who use our product together with diet and exercise may expect to lose 10 pounds in four months." Third, if the endorser has any connection that could affect how he or she were compensated for an endorsement—or how a person would view the endorsement— that connection or compensation must be disclosed. For example, if a person works for the company or is related to someone who works for the company, that must be disclosed. If the person received any compensation—even as little as a free sample—or is part of a marketing program run by the company, that, too, must be disclosed. Such disclosure may be as simple as, "XYZ Company gave me its product to try, and here is what I think." Companies may solicit endorsements from customers. If the customers have no reason to believe that they will be compensated (and they are not), then there would be no need for a disclosure. It should be disclosed if the customers have a reason to expect compensation for the endorsement. According to FTC, "If customers are told in advance that their comments might be used in advertising, they might expect to receive a payment for a positive review, and that could infl uence what they say, even if you tell them that you want their honest opinion. In fact, even if you tell your customers that you aren't going to pay them, but that they might be featured in your advertising, that opportunity might be seen as having a value, so the fact that they knew this when they gave the review should be disclosed." Consider the following examples, starting with bloggers and infl uencers. Some bloggers and typical consumers comment on products in their social media posts, but have no connection to the marketers of the products and do not receive compensation. They are simply advising their readers and friends about products that they like and recommend. These posts generally fall within the scope of First Amendment rights, and FTC should not have any issue with them. When it comes to bloggers and social media, FTC is primarily concerned about endorsements made on behalf of an advertiser where the blogger is compensated or otherwise connected to the marketer, and the compensation or Legal: Endorsements Making and Using Endorsements by Steven Shapiro When a company uses an endorsement in advertising, that endorsement is a claim requiring substantiation, not substantiation itself.

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