[Federal Register Volume 75, Number 140 (Thursday, July 22, 2010)]
[Notices]
[Pages 42752-42754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17838]


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FEDERAL TRADE COMMISSION

[File No. 092 3087]


Nestle' HealthCare Nutrition, Inc.; Analysis of Proposed Consent 
Order to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint and the terms of the consent order--embodied in the consent 
agreement--that would settle these allegations.

DATES: Comments must be received on or before August 16, 2010.

ADDRESSES: Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``Nestle, 
File No. 092 3087'' to facilitate the organization of comments. Please 
note that your comment--including your name and your state--will be 
placed on the public record of this proceeding, including on the 
publicly accessible FTC website, at (http://www.ftc.gov/os/publiccomments.shtm).
    Because comments will be made public, they should not include any 
sensitive personal information, such as an individual's Social Security 
Number; date of birth; driver';s license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. Comments also 
should not include any sensitive health information, such as medical 
records or other individually identifiable health information. In 
addition, comments should not include any ``[t]rade secret or any 
commercial or financial information which is obtained from any person 
and which is privileged or confidential. . . .,'' as provided in 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which 
confidential treatment is requested must be filed in paper form, must 
be clearly labeled ``Confidential,'' and must comply with FTC Rule 
4.9(c), 16 CFR 4.9(c).\1\
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    \1\ The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR 
4.9(c).
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    Because paper mail addressed to the FTC is subject to delay due to 
heightened security screening, please consider submitting your comments 
in electronic form. Comments filed in electronic form should be 
submitted by using the following weblink: (https://ftcpublic.commentworks.com/nestle) and following the instructions on 
the web-based form. To ensure that the Commission considers an 
electronic comment, you must file it on the web-based form at the 
weblink: (https://ftcpublic.commentworks.com/nestle). If this Notice 
appears at (http://www.regulations.gov/search/index.jsp), you may also 
file an electronic comment through that website. The Commission will 
consider all comments that regulations.gov forwards to it. You may also 
visit the FTC website at (http://www.ftc.gov/) to read the Notice and 
the news release describing it.
    A comment filed in paper form should include the ``Nestle, File No. 
092 3087'' reference both in the text and on the envelope, and should 
be mailed or delivered to the following address: Federal Trade 
Commission, Office of the Secretary, Room H-135 (Annex D), 600 
Pennsylvania Avenue, NW, Washington, DC 20580. The FTC is requesting 
that any comment filed in paper form be sent by courier or overnight 
service, if possible, because U.S. postal mail in the Washington area 
and at the Commission is subject to delay due to heightened security 
precautions.
    The Federal Trade Commission Act (``FTC Act'') and other laws the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding as appropriate. The Commission will 
consider all timely and responsive public comments that it receives, 
whether filed in paper or electronic form. Comments received will be 
available to the public on the FTC website, to the extent practicable, 
at (http://www.ftc.gov/os/publiccomments.shtm). As a matter of 
discretion, the Commission makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC website. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy, at (http://www.ftc.gov/ftc/privacy.shtm).

FOR FURTHER INFORMATION CONTACT: Karen Mandel (202-326-2491), Bureau of 
Consumer Protection, 600 Pennsylvania Avenue, NW, Washington, D.C. 
20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 the 
Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that 
the above-captioned consent agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of thirty (30) days. The following Analysis to Aid Public 
Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for July 14, 2010), on the World Wide Web, at (http://www.ftc.gov/os/actions.shtm). A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington, 
D.C. 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. All comments should be filed as 
prescribed in the ADDRESSES section above, and must be received on or 
before the date specified in the DATES section.

Analysis of Agreement Containing Consent Order to Aid Public Comment

    The Federal Trade Commission (``FTC'' or ``Commission'') has 
accepted, subject to final approval, an agreement containing a consent 
order from Nestle; HealthCare Nutrition, Inc. (``respondent''). The 
proposed consent order has been placed on the public record for thirty 
(30) days for receipt of comments by interested persons. Comments 
received during this period will become part of the public record.

[[Page 42753]]

After thirty (30) days, the Commission will again review the agreement 
and the comments received, and will decide whether it should withdraw 
from the agreement or make final the agreement's proposed order.
    This matter involves the advertising and promotion of BOOST Kid 
Essentials, a children's nutritional drink that also delivers 
probiotics via an attached straw. According to the FTC complaint, 
respondent represented, in various advertisements, that BOOST Kid 
Essentials prevents upper respiratory tract infections in children; 
strengthens the immune system, thereby providing protection against 
cold and flu viruses; and reduces absences from daycare or school due 
to illness. The complaint alleges that these claims are unsubstantiated 
and thus violate the FTC Act.
    The FTC complaint further charges that respondent represented that 
clinical studies prove that BOOST Kid Essentials reduces the general 
incidence of illness in children, including upper respiratory tract 
infections; reduces the duration of acute diarrhea in children up to 
age thirteen (the age group for which the product is marketed); and 
strengthens the immune system, thereby providing protection against 
cold and flu viruses. The complaint alleges that these claims are false 
and thus violate the FTC Act.
    The proposed consent order contains provisions designed to prevent 
respondent from engaging in similar acts or practices in the future. 
The order covers representations made in connection with the 
manufacturing, labeling, advertising, promotion, offering for sale, 
sale, or distribution of any covered product, in or affecting commerce. 
The order defines a covered product as BOOST Kid Essentials, any drink 
product containing probiotics, or any nutritionally complete drink, 
other than infant formula, medical foods, and any product not sold 
primarily through conventional retail channels.
    Part I of the consent order is designed to address the complaint 
allegations concerning respondent's allegedly unsubstantiated 
representations that its products prevent upper respiratory tract 
infections (URTIs). Part I prohibits respondent from making 
representations that a covered product prevents or reduces the risk of 
URTIs, including, but not limited to, cold or flu viruses, unless the 
representation is specifically permitted in labeling for such product 
by regulations promulgated by the Food and Drug Administration (FDA) 
pursuant to the Nutrition Labeling and Education Act of 1990 (NLEA). 
Under this provision, therefore, respondent cannot make a claim of URTI 
risk reduction unless the FDA has issued a regulation authorizing the 
claim based on a finding that there is significant scientific agreement 
among experts qualified by scientific training and experience to 
evaluate such claims, considering the totality of publicly available 
scientific evidence. As noted in the Commission's Enforcement Policy 
Statement on Food Advertising, ``[t]he Commission regards the 
`significant scientific agreement' standard, as set forth in the NLEA 
and FDA's regulations, to be the principal guide to what experts in the 
field of diet-disease relationships would consider reasonable 
substantiation for an unqualified health claim.'' Enforcement Policy 
Statement on Food Advertising (1994), available at (http://www.ftc.gov/bcp/policystmt/ad-food.shtm). Thus, although the Enforcement Policy 
Statement does not say that the only way a food advertiser can 
adequately substantiate a disease risk-reduction claim is through FDA 
authorization, the Commission has determined that requiring FDA pre-
approval before respondent makes a URTI risk-reduction claim for its 
covered products will facilitate compliance with the order and is 
reasonably related to the enforcement of this order.
    Respondent may decide to make an advertising claim characterizing 
limited scientific evidence supporting the relationship between a 
covered product and URTIs. However, if the net impression is that a 
covered product prevents or reduces the risk of URTIs, and not merely 
that there is limited scientific evidence supporting the claim, the 
advertisement would be covered under Part I. The Commission notes that 
its experience and research show that it is very difficult to 
adequately qualify a disease risk-reduction claim in advertising to 
indicate that the science supporting the claimed effect is limited. In 
other words, reasonable consumers may interpret an advertisement to 
mean that the product will prevent or reduce the risk of URTIs, even if 
respondent includes language indicating that the science supporting the 
effect is limited in some way. However, if respondent possesses 
reliable empirical testing demonstrating that the net impression of an 
advertisement making a qualified claim for a covered product does not 
convey that it will prevent or reduce the risk of URTIs, then that 
claim would be covered under the relevant subsequent parts of the 
order.
    Although Part I requires FDA approval before respondent can make 
claims that a covered product prevents or reduces the risk of URTIs, 
the Commission does not intend Part I to limit respondent to using the 
precise language specified in an FDA-approved health claim. To the 
contrary, if the FDA has approved a claim that a covered product can 
prevent or reduce the risk of URTIs, respondent may use a variety of 
words and images to communicate that claim in its advertising. 
Likewise, regardless of the particular words or images used, if the net 
impression of an advertisement is that a covered product prevents or 
reduces the risk of URTIs, then for the ad to comply with the order, 
the FDA must have authorized a health claim based on significant 
scientific agreement that such product provides such a benefit.
    Part II of the consent order prohibits respondent from making 
representations that a covered product reduces the duration of acute 
diarrhea in children up to the age of thirteen, or reduces absences 
from daycare or school due to illness, unless the representation is 
non-misleading and, at the time of making such representation, 
respondent possesses and relies upon competent and reliable scientific 
evidence that substantiates that the representation is true. For 
purposes of Part II, competent and reliable scientific evidence means 
at least two adequate and well-controlled human clinical studies of the 
product, or of an essentially equivalent product, conducted by 
different researchers, independently of each other, that conform to 
acceptable designs and protocols and whose results, when considered in 
light of the entire body of relevant and reliable scientific evidence, 
are sufficient to substantiate that the representation is true. For 
purposes of the order, essentially equivalent product means a product 
that contains the identical ingredients, except for inactive 
ingredients (e.g., inactive binders, flavors, preservatives, colors, 
fillers, excipients), in the same form and dosage, and with the same 
route of administration (e.g., orally, sublingually), as the covered 
product; provided that the covered product may contain additional 
ingredients if reliable scientific evidence generally accepted by 
experts in the field demonstrates that the amount and combination of 
additional ingredients is unlikely to impede or inhibit the 
effectiveness of the ingredients in the essentially equivalent product.
    Part III of the consent order prohibits respondent from making 
representations, other than representations covered under Parts I or 
II, about the health benefits, performance, or efficacy of any covered 
product, unless the representation is

[[Page 42754]]

non-misleading, and, at the time of making such representation, 
respondent possesses and relies upon competent and reliable scientific 
evidence that is sufficient in quality and quantity based on standards 
generally accepted in the relevant scientific fields, when considered 
in light of the entire body of relevant and reliable scientific 
evidence, to substantiate that the representation is true. For purposes 
of Part III, competent and reliable scientific evidence means tests, 
analyses, research, studies, or other evidence that have been conducted 
and evaluated in an objective manner by qualified persons, that are 
generally accepted in the profession to yield accurate and reliable 
results.
    Part IV of the consent order prohibits respondent from 
misrepresenting the existence, contents, validity, results, 
conclusions, or interpretations of any test, study, or research.
    Part V of the consent order provides that nothing in the order 
shall prohibit respondent from making any representation for any 
product that is specifically permitted in labeling for such product by 
regulations promulgated by the FDA pursuant to the NLEA.
    Parts VI, VII, VIII, and IX of the consent order require respondent 
to keep copies of relevant advertisements and materials substantiating 
claims made in the advertisements; to provide copies of the order to 
its personnel; to notify the Commission of changes in corporate 
structure that might affect compliance obligations under the order; and 
to file compliance reports with the Commission.
    Part X provides that the order will terminate after twenty (20) 
years, with certain exceptions.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify their 
terms in any way.
    By direction of the Commission.

Richard C. Donohue
Acting Secretary.
[FR Doc. 2010-17838 Filed 7-21-10: 8:45 am]
BILLING CODE 6750-01-S