[Federal Register Volume 79, Number 10 (Wednesday, January 15, 2014)]
[Notices]
[Pages 2668-2674]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-00560]


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FEDERAL TRADE COMMISSION

[File No. 122 3115]


L'Occitane, Inc.; Analysis of Proposed Consent Order To Aid 
Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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[[Page 2669]]

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 of 
Proposed Consent Order 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 February 6, 2014.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/loccitaneconsent online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``L'Occitane, Inc.--
Consent Agreement; File No. 122 3115'' on your comment and file your 
comment online at https://ftcpublic.commentworks.com/ftc/fidelitynationalconsent https://ftcpublic.commentworks.com/ftc/loccitaneconsent by following the instructions on the web-based form. 
If you prefer to file your comment on paper, mail or deliver your 
comment to the following address: Federal Trade Commission, Office of 
the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW., 
Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Matthew D. Gold, Federal Trade 
Commission Western Region, (415-848-5100), 901 Market Street, Suite 570 
San Francisco, CA 94103.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing 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 January 7, 2014), 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, DC 20580, either in person or by calling (202) 326-2222.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before February 6, 
2014. Write ``L'Occitane, Inc.--Consent Agreement; File No. 122 3115'' 
on your comment. Your comment--including your name and your state--will 
be placed on the public record of this proceeding, including, to the 
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the 
Commission tries to remove individuals' home contact information from 
comments before placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone'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. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which . . . is privileged or confidential,'' as discussed in Section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/loccitaneconsent by following the instructions on the web-based 
form. If this Notice appears at http://www.regulations.gov/#!home, you 
also may file a comment through that Web site.
    If you file your comment on paper, write ``L'Occitane, Inc.--
Consent Agreement; File No. 122 3115'' on your comment and on the 
envelope, and mail or deliver it to the following address: Federal 
Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 
Pennsylvania Avenue NW., Washington, DC 20580. If possible, submit your 
paper comment to the Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that 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 on or before February 6, 2014. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``FTC'' or ``Commission'') has 
accepted, subject to final approval, an Agreement Containing Consent 
Order from L'Occitane, 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. 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 
and take appropriate action or make final the agreement's proposed 
order.
    This matter involves the advertising, marketing, and sale of 
``Almond Beautiful Shape'' and ``Almond Shaping Delight'' 
(collectively, ``the almond products'') by respondent. Respondent has 
marketed the almond products to consumers through its retail stores and 
Web site, and through third-party retail outlets.
    The almond products are skin creams that contain almond extracts 
and other ingredients. According to the FTC complaint, respondent 
promoted the almond products as able to slim and reshape the body.
    Specifically, the FTC complaint alleges that respondent 
represented, in various advertisements, that topical use of Almond 
Beautiful Shape trims 1.3

[[Page 2670]]

inches from the user's thighs in just four weeks; topical use of Almond 
Beautiful Shape significantly slims the user's thighs and buttocks; 
topical use of Almond Beautiful Shape significantly reduces cellulite; 
and topical use of Almond Shaping Delight significantly slims the body 
in just four weeks. The complaint alleges that these claims are 
unsubstantiated and thus violate the FTC Act. The complaint also 
alleges that respondent represented, in various advertisements, that 
scientific tests prove that topical use of Almond Beautiful Shape trims 
1.3 inches from the user's thighs in just four weeks; scientific tests 
prove that topical use of Almond Beautiful Shape significantly reduces 
cellulite; and scientific tests prove that Almond Shaping Delight 
significantly slims the body in just four weeks. 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. 
Specifically, Part I prohibits respondent from claiming that the almond 
products or any other topically applied product causes substantial 
weight or fat loss or a substantial reduction in body size. Part I of 
the order is designed to fence in respondent by ensuring that extreme, 
scientifically unfeasible claims will not be made in the future.
    Part II addresses the slimming claims at issue in this matter. It 
covers any representation, other than representations covered under 
Part I, that a drug or cosmetic causes weight or fat loss or a 
reduction in body size. Part II prohibits respondent from making such 
representations 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, the proposed order 
defines ``competent and reliable scientific evidence'' as at least two 
randomized, double-blind, placebo-controlled human clinical studies 
that are conducted by independent, qualified researchers and 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.
    Part III of the proposed order prohibits respondent from making any 
representation, other than representations covered under Parts I or II, 
that use of a drug or cosmetic reduces or eliminates cellulite or 
affects body fat or weight, 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 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, 
the proposed order defines ``competent and reliable scientific 
evidence'' as tests, analyses, research, or studies that have been 
conducted and evaluated in an objective manner by qualified persons, 
and that are generally accepted in the profession to yield accurate and 
reliable results.
    Part IV of the proposed order addresses the allegedly false claims 
that scientific tests prove that topical use of Almond Beautiful Shape 
trims 1.3 inches from the user's thighs in just four weeks; scientific 
tests prove that topical use of Almond Beautiful Shape significantly 
reduces cellulite; and scientific tests prove that Almond Shaping 
Delight significantly slims the body in just four weeks. Part IV 
prohibits respondent, when advertising any product, from 
misrepresenting the existence, contents, validity, results, 
conclusions, or interpretations of any test, study, or research, or 
misrepresenting that the benefits of the product are scientifically 
proven.
    Part V of the proposed order states that the order does not 
prohibit respondent from making representations for any drug that are 
permitted in labeling for that drug under any tentative or final 
standard promulgated by the Food and Drug Administration (``FDA''), or 
under any new drug application approved by the FDA. This part of the 
proposed order also states that the order does not prohibit respondent 
from making representations for any product that are specifically 
permitted in labeling for that product by regulations issued by the FDA 
under the Nutrition Labeling and Education Act of 1990.
    Part VII of the proposed order requires respondent to pay four 
hundred and fifty thousand dollars ($450,000) to the Commission to be 
used for equitable relief, including restitution, and any attendant 
expenses for the administration of such equitable relief. To facilitate 
the payment of redress, Part VI of the proposed order requires 
L'Occitane to provide to the Commission a searchable electronic file 
containing the name and contact information of all consumers who 
purchased the almond products from March 19, 2012 through the date of 
entry of the order.
    Parts VIII, IX, X, and XI of the proposed 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 XII 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.
Donald S. Clark,
Secretary.

Statement of Chairwoman Edith Ramirez and Commissioner Julie Brill

    We write to explain our support for the remedy imposed against 
respondents GeneLink, Inc. and foru International Corporation, which we 
believe to be amply supported by the relevant facts. In this, as in all 
of the Commission's advertising actions alleging deceptive health 
claims, the Commission has called for, as proposed relief, a level of 
substantiation that is grounded in concrete scientific evidence and 
reasonably tailored to ensure that the conduct giving rise to the 
violation ceases and does not recur, among other important remedial 
goals. In our view, the remedy adopted here accomplishes just that, 
without imposing undue costs on marketers or consumers more generally.
    Respondents market and sell genetically customized nutritional 
supplements and topical skin products. As described in the complaint, 
this enforcement action stems from claims made by respondents in 
promotional materials and through testimonials that their products 
compensate for consumers' ``genetic disadvantages'' and cure or treat 
serious conditions such as diabetes, heart disease, and arthritis. In a 
newsletter, for example, respondents represented their products had 
cured ``a serious diabetic and cardiac patient,'' and an affiliate's 
Web site stated that the products produced ``improvements in everything 
from blood pressure to eczema to hormonal issues to arthritis.'' \1\ 
The Commission alleges that

[[Page 2671]]

respondents lacked adequate substantiation for these claims and that 
they falsely represented that the products' benefits were 
scientifically proven.
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    \1\ Compl. Exs. G and H.
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    Disease treatment claims such as these require a rigorous level of 
substantiation. Based on evidence from genetics and nutritional 
genomics experts, the Commission has reason to believe that well-
controlled human clinical trials (referred to here as ``randomized 
controlled trials'' or ``RCTs'') are needed to substantiate 
respondents' claims and that the studies relied on by respondents to 
back up their claims fall far short of this evidence. Because 
respondents lacked even one valid RCT for their products, it was 
unnecessary for the Commission to decide, for purposes of assessing 
liability, the precise number of RCTs needed to substantiate their 
claims.
    In fashioning an appropriate remedy, however, we are requiring that 
respondents have at least two RCTs before making disease prevention, 
treatment, and diagnosis claims. We have the discretion to issue orders 
containing ``fencing-in'' provisions--``provisions . . . that are 
broader than the conduct that is declared unlawful.'' Telebrands Corp. 
v. FTC, 457 F.3d 354, 357 n.5 (4th Cir. 2006) (citation and internal 
quotation marks omitted). Here, we believe that the two-RCT mandate is 
appropriate and reasonably crafted to prevent the recurrence of 
respondents' alleged unlawful conduct. This requirement conforms to 
well-recognized scientific principles favoring replication of study 
results to establish a causal relationship between exposure to a 
substance and a health outcome. See, e.g., Thompson Med. Co., 104 
F.T.C. 648, 720-21, 825 (1984) (requiring two RCTs to support claims of 
arthritis pain relief and thereby affirming determination that 
``[r]eplication is necessary because there is a potential for 
systematic bias and random error in any clinical trial''), aff'd, 791 
F.2d 189 (D.C. Cir. 1986).\2\ It also provides clear rules for 
respondents, facilitating the setting of future research and marketing 
agendas, and preserves law enforcement resources by minimizing future 
argument over the quantity and quality of substantiation needed for the 
most serious health claims about respondents' products. Moreover, the 
deceptive claims alleged in the complaint are the type of significant 
violations of law for which fencing-in relief is more than justified as 
an additional safeguard against potential recidivism. See, e.g., id. at 
834 (ruling that deceptive health claims about topical analgesic for 
arthritis pain warranted fencing-in, and noting that the seriousness of 
the violations was ``affected by the fact that consumers could not 
readily judge the truth or falsity of the claims'').
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    \2\ See also Geoffrey Marczyk et al., Essentials of Research 
Design and Methodology 15-16 (2005) (``The importance of replication 
in research cannot be overstated. Replication serves several 
integral purposes, including establishing the reliability (i.e., 
consistency) of the research study's findings and determining . . . 
whether the results of the original study are generalizable to other 
groups of research participants.'').
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    While not taking issue with respondents' liability as alleged in 
the Commission's complaint, Commissioner Ohlhausen objects to the 
Commission's decision to require, as a remedial matter, that 
respondents have at least two RCTs before representing that their 
genetic products can cure, treat, diagnose, or prevent a disease. In 
addition to arguing that the two-RCT requirement is ``unduly high,'' 
Commissioner Ohlhausen expresses concern that these and other recent 
Commission orders may lead advertisers in general to believe that they 
too must invariably have two RCTs to substantiate health and disease 
claims for a variety of products, leading them to forgo otherwise 
adequately substantiated claims and depriving consumers of potentially 
useful information.\3\ We respectfully disagree.
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    \3\ Statement of Commissioner Maureen K. Ohlhausen, Dissenting 
in Part and Concurring in Part [hereinafter Ohlhausen Statement] at 
1. In her Statement, Commissioner Ohlhausen also references various 
weight-loss related enforcement actions announced today by the 
Commission, including FTC v. Sensa Products, LLC. Her objections, 
however, center on the remedy imposed in this matter.
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    There is nothing in our action today that amounts to the imposition 
of a ``de facto two-RCT standard on health- and disease-related 
claims.'' \4\ In this and other recent enforcement actions, the 
Commission has consistently adhered to its longstanding view that the 
proper level of substantiation for establishing liability is a case-
specific factual determination as to what constitutes competent and 
reliable scientific evidence for the advertising claims at issue.\5\ 
The same fact-specific approach has guided the Commission's remedial 
standards. Recent Commission consent orders concerning different types 
of health claims have variously required two RCTs,\6\ one RCT,\7\ or 
more generally defined ``competent and reliable scientific evidence.'' 
\8\ Against this backdrop, we are not persuaded that by requiring two 
RCTs as a remedial matter here, the Commission will create a 
misperception among advertisers about the substantiation standards that 
govern liability for deceptive advertising.\9\ However, to the extent 
other marketers look to our orders for signals as to the type of 
backing required for disease treatment claims, we prefer that they 
understand that serious claims like those made by respondents must have 
hard science behind them.
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    \4\ Ohlhausen Statement at 3.
    \5\ See, e.g., Bristol Meyers Co., 102 F.T.C. 21, 332-38 (1983), 
aff'd, 738 F.2d 554 (2d Cir. 1984); FTC, Dietary Supplements: An 
Advertising Guide for Industry 10 (Apr. 2001) [hereinafter Dietary 
Supplements Advertising Guide] (``When no specific claim about the 
level of support is made, the evidence needed depends on the nature 
of the claim. A guiding principle for determining the amount and 
type of evidence that will be sufficient is what experts in the 
relevant area of study would generally consider to be adequate.'').
    \6\ See, e.g., FTC v. Skechers U.S.A., Inc., No. 1:12-cv-01214-
JG (N.D. Ohio July 12, 2012) (prohibiting, as a remedial matter, 
weight loss claims without two RCTs); FTC v. Labra, No. 11 C 2485 
(N.D. Ill. Jan. 11, 2012) (same); FTC v. Iovate Health Scis. USA, 
Inc., No. 10-cv-587 (W.D.N.Y. July 29, 2010) (same); Nestl[eacute] 
Healthcare Nutrition, Inc., 151 F.T.C. 1 (2011) (requiring two RCTs 
for claims that any probiotic drink or certain nutritionally 
complete drinks reduce the duration of acute diarrhea in children or 
absences from daycare or school due to illness).
    \7\ See, e.g., FTC v. Skechers U.S.A., Inc., No. 1:12-cv-01214-
JG (N.D. Ohio July 12, 2012) (prohibiting muscle strengthening 
claims for any footwear product without one RCT); FTC v. Reebok 
Int'l Ltd., No. 1:11-cv-02046-DCN (N.D. Ohio Sept. 29, 2011) (same).
    \8\ See, e.g., NBTY, Inc., 151 F.T.C. 201 (2011) (requiring 
marketer of vitamins to possess ``competent and reliable scientific 
evidence'' for any claim about the health benefits, performance, or 
efficacy of any product).
    \9\ Moreover, as Commissioner Ohlhausen notes, Ohlhausen 
Statement at 2 n.7, there may be some instances in which the medical 
community would not require RCTs to demonstrate that a substance 
treats, prevents, or reduces the risk of a disease. See, e.g., 
Dietary Supplements Advertising Guide, supra note 5, at 11 
(explaining that an appropriately qualified claim based on 
epidemiological evidence would be permitted where ``[a] clinical 
intervention trial would be very difficult and costly to conduct,'' 
``experts in the field generally consider epidemiological evidence 
to be adequate'' and there is no ``stronger body of contrary 
evidence''). But, contrary to Commissioner Ohlhausen's contention, 
the link between folic acid and neural tube birth defects was 
substantiated using a combination of RCTs and observational 
epidemiological evidence, as indicated by the articles she cites. 
See, e.g., Walter C. Willett, Folic Acid and Neural Tube Defect: 
Can't We Come to Closure?, 82 Am. J. Pub. Health 666, 667 (1992).
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    We also disagree that the proposed remedy will deny consumers 
access to useful information about new areas of science. The value of 
information naturally depends on its accuracy.\10\ As

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the DC Circuit has emphasized, ``misleading advertising does not serve, 
and, in fact, disserves, th[e] interest'' of ``consumers and society . 
. . in the free flow of commercial information.'' FTC v. Brown & 
Williamson Tobacco Corp., 778 F.2d 35, 43 (D.C. Cir. 1985) (citation 
and internal quotation marks omitted). If respondents wish to rely on 
emerging science, they can qualify their claims accordingly. Properly 
qualified claims are lawful and permissible under our proposed orders. 
See Proposed Consent Orders, Part III.
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    \10\ In some instances, ``emerging'' scientific evidence has 
been subsequently contradicted by further research, leading to 
consumer confusion and potential physical and financial harm. See, 
e.g., Eric A. Klein et al., Vitamin E and the Risk of Prostate 
Cancer, The Selenium and Vitamin E Cancer Prevention Trial (SELECT), 
306 J. Am. Med. Ass'n 1549, 1551 (2011) (reporting that a 2008 
randomized, placebo-controlled prospective clinical trial of over 
35,000 men contradicted ``considerable preclinical and 
epidemiological evidence that selenium and vitamin E may reduce 
prostate cancer risk,'' and that follow-up observational data from 
2011 showed a statistically significant increase in prostate cancer 
in the vitamin E group over placebo).
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    The fact that the ingredients in respondents' products are safe 
also does not alter our conclusion. Consumers who rely on respondents' 
claims may forgo important diet and lifestyle changes that are known to 
reduce the risk of diabetes, heart disease, or arthritis. Or they may 
forgo treatments that, unlike respondents' products, have been 
demonstrated to be effective. In addition, respondents charge a 
premium, over $100 per month, for their customized products. Consumers, 
therefore, may be deceived both to their medical and economic detriment 
when a safe product provides an ineffective treatment. See FTC v. QT, 
Inc., 512 F.3d 858, 863 (7th Cir. 2008) (safe but deceptively 
advertised treatment ``will lead some consumers to avoid treatments 
that cost less and do more; the lies will lead others to pay too much 
for [treatment] or otherwise interfere with the matching of remedies to 
medical conditions''); Pfizer Inc., 81 F.T.C. 23, 62 (1972) (``A 
consumer should not be compelled to enter into an economic gamble to 
determine whether a product will or will not perform as 
represented.''). Unsubstantiated disease claims also harm honest 
competitors that expend considerable resources on studies or analyses 
of the existing science and conform their advertising claims 
accordingly. Allowing companies to rely on ``emerging'' evidence to 
support disease claims merely because the products in question are safe 
would risk a ``race to the bottom''--the proliferation of progressively 
more egregious disease claims, which would harm both legitimate 
competitors and consumers in the process.
    Finally, Commissioner Ohlhausen argues that requiring the RCTs to 
be conducted by different researchers working independently of each 
other imposes undue burdens in the absence of evidence that a defendant 
has fabricated or interfered with a study or its results.\11\ This 
requirement is an important safeguard that lessens the likelihood that 
researcher bias will affect the outcome of a study and helps ensure 
that the results are replicable.\12\
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    \11\ Ohlhausen Statement at 2-3.
    \12\ Commissioner Ohlhausen also objects to the Part I 
requirement that testing be conducted on the product about which the 
advertising claim is made or an ``essentially equivalent product,'' 
arguing that the order should authorize ``claims regarding 
individual ingredients in combined products as long as claims for 
each ingredient are properly substantiated and there are no known 
interactions.'' Ohlhausen Statement at 3. In fact, the orders permit 
that very thing. If there is reliable evidence that the additional 
ingredients will not interact with the tested product in a way that 
impacts efficacy, the orders do not require testing of the combined 
product. See Proposed Consent Orders at 3 (defining ``Essentially 
Equivalent Product'' to permit additional ingredients, beyond those 
in the tested product, if ``reliable scientific evidence generally 
accepted by experts in the field demonstrates that the amount and 
combination of additional ingredients [in the respondent's product] 
is unlikely to impede or inhibit the effectiveness of the 
ingredients in the [tested product]'').
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    In short, we believe the relief obtained by the Commission in this 
settlement is warranted and strikes the right balance between the need 
for accuracy in health-related advertising claims and the burden placed 
on respondents.

Statement of Commissioner Maureen K. Ohlhausen Dissenting In Part and 
Concurring In Part

    I strongly support the Commission's enforcement efforts against 
false and misleading advertisements and therefore have voted in favor 
of the consent agreements with Sensa Products, LLC; HCG Diet Direct, 
LLC; L'Occitane, Inc.; and LeanSpa, LLC, despite having some concerns 
about the scope of the relief in several of these weight-loss related 
matters. I voted against the consent agreements in the matter of 
GeneLink, Inc. and foru International Corporation, however, because 
they impose an unduly high standard of at least two randomized 
controlled trials (or RCTs) to substantiate any disease-related claims, 
not just weight-loss claims. Adopting a one-size-fits-all approach to 
substantiation by imposing such rigorous and possibly costly 
requirements for such a broad category of health- and disease-related 
claims \1\ may, in many instances, prevent useful information from 
reaching consumers in the marketplace and ultimately make consumers 
worse off.\2\
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    \1\ This provision may apply quite broadly in practice given the 
Commission majority's conclusion in our POM Wonderful decision that 
many of the claims involving the continued healthy functioning of 
the body also conveyed implied disease-related claims. See POM 
Wonderful, LLC, No. 9344, 2013 WL 268926 (F.T.C. Jan. 16, 2013).
    \2\ To be clear, however, I am not advocating in favor of 
permitting ``unsubstantiated disease claims,'' as suggested in the 
statement of Chairwoman Ramirez and Commissioner Brill. Rather, I am 
suggesting that consumers would on balance be better off if we 
clarified that our requirements permit a variety of health- or 
disease-related claims about safe products, such as foods or 
vitamins, to be substantiated by competent and reliable scientific 
evidence that might not comprise two RCTs.
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    The Commission has traditionally applied the Pfizer \3\ factors to 
determine the appropriate level of substantiation required for a 
specific advertising claim. These factors examine the nature of the 
claim and the type of product it covers, the consequences of a false 
claim, the benefits of a truthful claim, the cost of developing the 
required substantiation for the claim, and the amount of substantiation 
experts in the field believe is reasonable for such a claim.\4\ One of 
the goals of the Pfizer analysis is to balance the value of greater 
certainty of information about a product's claimed attributes with the 
risks of both the product itself and the suppression of potentially 
useful information about it. Under such an analysis, the burden for 
substantiation for health- or disease-related claims about a safe 
product, such as a food, for example, should be lower than the burdens 
imposed on drugs and biologics because consumers face lower risks when 
consuming the safe product.\5\
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    \3\ Pfizer, Inc., 81 F.T.C. 23 (1972).
    \4\ Id. at 91-93; see also FTC Policy Statement Regarding 
Advertising Substantiation, 104 F.T.C. 839 (1984) (appended to 
Thompson Med. Co., 104 F.T.C. 648, 839 (1984)).
    \5\ The FDA designates most food ingredients as GRAS (generally 
recognized as safe). 21 CFR 170.30. Vitamins and minerals are 
treated as foods by the FDA and are also GRAS. See FDA Guidance for 
Industry: Frequently Asked Questions about GRAS (Dec. 2004), 
available at http://www.fda.gov/Food/GuidanceRegulation/GuidanceDocumentsRegulatoryInformation/IngredientsAdditivesGRASPackaging/ucm061846.htm#Q1. As a result, 
food ingredients, vitamins, and minerals can be combined and sold to 
the public without direct evidence on the particular combination 
realized in the new product. Many products are made up of several 
common generic ingredients, for which there is little financial 
incentive to test individually or to retest in each particular 
combination.
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    Recently, however, Commission orders, including the ones in the 
matter of GeneLink and foru International, seem to have adopted two 
RCTs as a standard requirement for health- and disease-related claims 
for a wide array of products.\6\ RCTs can be difficult to

[[Page 2673]]

conduct and are often costly and time-consuming relative to other types 
of testing, particularly for diseases that develop over a long period 
of time or complex health conditions. Requiring RCTs may be appropriate 
in some circumstances, such as where use of a product carries some 
significant risk, or where the costs of conducting RCTs may be 
relatively low, such as for conditions whose development or 
amelioration can be observed over a short time period. Thus, I am 
willing to support the order requirement of two RCTs for short-term 
weight loss claims in the Sensa, HCG Diet Direct, L'Occitane, and 
LeanSpa matters because such studies can be conducted in a relatively 
short amount of time at a lower cost than for many other health claims. 
My concern with GeneLink and foru International and the series of 
similar orders is that they might be read to imply that two RCTs are 
required to substantiate any health- or disease-related claims, even 
for relatively-safe products. It seems likely that producers may forgo 
making such claims about these kinds of products, even if they may 
otherwise be adequately supported by evidence that does not comprise 
two RCTs.\7\
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    \6\ The orders in this matter include as a Covered Product any 
food, drug, or cosmetic that is genetically customized or 
personalized for a consumer or that is promoted to modulate the 
effect of genes. Other cases requiring two RCTs are POM Wonderful 
LLC, Docket No. 9344 (F.T.C. Jan. 10, 2013) (fruit juice); Dannon 
Co., Inc., 151 F.T.C. 62 (2011) (yogurt); Nestl[eacute] Healthcare 
Nutrition, Inc., 151 F.T.C. 1 (2011) (food); FTC v. Iovate Health 
Sci. USA, Inc., No. 10-cv-587 (W.D.N.Y. July 29, 2010) (dietary 
supplement).
    \7\ Notably, the medical community does not always require RCTs 
to demonstrate the beneficial effects of medical and other health-
related innovations. For example, the recommendation that women of 
childbearing age take a folic acid supplement to reduce the risk of 
neural tube birth defects was made without RCT evidence on the 
relevant population. See Walter C. Willett, ``Folic Acid and Neural 
Tube Defect: Can't We Come to Closure?'' American Journal of Public 
Health, May 1992, Vol. 82, No. 5; Krista S. Crider, Lynn B. Bailey 
and Robert J. Berry, ``Folic Acid Food Fortification--Its History, 
Effect, Concerns, and Future Directions,'' Nutrients 2011, Vol. 3, 
370-384.
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    Although raising the requirement for both the number and the rigor 
of studies required for substantiation for all health- or disease-
related claims may increase confidence in those claims, the 
correspondingly increased burdens in time and money in conducting such 
studies may suppress information that would, on balance, benefit 
consumers. If we demand too high a level of substantiation in pursuit 
of certainty, we risk losing the benefits to consumers of having access 
to information about emerging areas of science and the corresponding 
pressure on firms to compete on the health features of their products. 
In my view, the Commission should apply the Pfizer balancing test in a 
more finely calibrated manner than they have in the GeneLink and foru 
International orders to avoid imposing ``unduly burdensome restrictions 
that might chill information useful to consumers in making purchasing 
decisions.'' \8\
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    \8\ FTC Staff Comment Before the Food and Drug Administration In 
the Matter of Assessing Consumer Perceptions of Health Claims, 
Docket No. 2005N-0413 (2006), available at http://www.ftc.gov/be/V060005.pdf.
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    In addition, based on the same concerns about imposing 
unnecessarily burdensome and costly obligations, I do not support a 
general requirement that all products be tested by different 
researchers working independently without an indication that the 
defendant fabricated or otherwise interfered with a study or its 
results.\9\ Where defendants have fabricated results, as our complaint 
against Sensa alleges, a requirement of independent testing may be 
appropriate, but a simple failure to have adequate substantiation 
should not automatically trigger such an obligation. In other cases, 
where there is some concern about a sponsor or researcher biasing a 
study, our orders may address this in a less burdensome way by 
requiring the producer making the disease-related claims to provide the 
underlying testing data to substantiate its claims, which we can 
examine for reliability. Similarly, the requirement to test an 
``essentially equivalent product,'' which appears to be more rigorous 
than FDA requirements for food and supplement products, can 
significantly and unnecessarily increase the costs of substantiation, 
again potentially depriving consumers of useful information. Instead, 
Commission orders should clearly allow claims regarding individual 
ingredients in combined products as long as claims for each ingredient 
are properly substantiated and there are no known relevant 
interactions.\10\
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    \9\ The FDA does not require independent testing for clinical 
investigational studies of medical products, including human drug 
and biological products or medical devices, and it permits sponsors 
to use a variety of approaches to fulfill their responsibilities for 
monitoring. See FDA Guidance for Industry Oversight of Clinical 
Investigations--A Risk-Based Approach to Monitoring (Aug. 2013), 
available at http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM269919.pdf.
    \10\ Although the statement by Chairwoman Ramirez and 
Commissioner Brill asserts that the orders in GeneLink and foru 
International permit claims for individual ingredients in combined 
products as long as the claims for each ingredient are properly 
substantiated and there are no known interactions, the orders 
actually require that ``reliable scientific evidence generally 
accepted by experts in the field demonstrate that the amount and 
combination of additional ingredients is unlikely to impede or 
inhibit the effectiveness of the ingredients in the Essentially 
Equivalent Product.'' Decision and Order at 2, In the Matter of 
GeneLink, Inc. FTC File No. 112 3095 (emphasis added). My point is 
that the FDA does not require direct evidence regarding combinations 
of individual ingredients deemed GRAS but the order on its face 
requires scientific evidence demonstrating the effect of such 
combinations.
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    It is my hope and recommendation that as we consider future cases 
involving health- and disease-related claims, the Commission and its 
staff engage in a further dialogue about our substantiation 
requirements to discern how best to assess the potential costs and 
benefits of allowing different types of evidence that might provide a 
reasonable basis to substantiate such claims. Although I am willing to 
support liability for failures to have adequate substantiation for 
health- and disease-related claims under certain circumstances, I am 
not willing to support a de facto two-RCT standard on health- and 
disease-related claims for food or other relatively-safe products.

Statement of Commissioner Joshua D. Wright

    Today the Commission announces five settlements involving the 
deceptive marketing of a variety of nutritional and dietary 
supplements, skincare products, and weight-loss remedies. While the 
course of business conduct, type of product and particular advertising 
claim at issue in each case differs, all share one common 
characteristic--the Commission has alleged that, in the course of 
advertising their products, each of these defendants has made false or 
unsubstantiated claims about the treatment of certain medical or health 
conditions.
    Cases that challenge false or unsubstantiated claims--especially 
those involving serious medical conditions--are an important component 
of our agency's mission to protect consumers from economic injury. 
Indeed, the aggregate consumer injury in these particular matters is 
estimated to be $420 million and these settlement agreements will 
return approximately $33 million to consumers. I fully support the 
Commission's efforts to deter deceptive advertising and voted in favor 
of authorizing these particular settlements.
    In crafting remedial relief in these cases, the Commission 
inevitably faces a tradeoff between deterring deceptive advertising and 
preserving the benefits to competition and consumers from truthful 
claims. Tailoring remedial relief--including the level of 
substantiation required--to the specific claims at issue is in the best 
interests of consumers.\1\ I write today to express some of my views on 
this issue.
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    \1\ The Commission's determination of whether an advertiser has 
adequate substantiation in the first instance depends upon ``a 
number of factors relevant to the benefits and costs of 
substantiating a particular claim. These factors include: the type 
of claim, the product, the consequences of a false claim, the 
benefits of a truthful claim, the cost of developing substantiation 
for the claim, and the amount of substantiation experts in the field 
believe is reasonable.'' FTC Policy Statement Regarding Advertising 
Substantiation, appended to Thompson Medical Co., 104 F.T.C. 648, 
839 (1984), aff'd, 791 F.2d 189 (D.C. Cir. 1986), cert. denied, 479 
U.S. 1086 (1987). Formulating the required level of substantiation 
for injunctive relief should necessarily be grounded in the factors 
set forth in this policy statement, although additional 
considerations might also be relevant.

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[[Page 2674]]

    Each of the consent agreements announced today includes injunctive 
relief provisions requiring the settling parties to satisfy a standard 
of ``competent and reliable scientific evidence'' before again making 
the claims at issue. Each consent agreement further defines ``competent 
and reliable scientific evidence'' as requiring, among other things, 
two adequate and well-controlled human clinical studies (randomized 
controlled trials or RCTs) of the product. I encourage the Commission 
to explore more fully whether the articulation and scope of injunctive 
relief in these and similar settlements strikes the right balance 
between deterring deceptive advertising and preserving for consumers 
the benefits of truthful claims. The optimal amount and type of 
evidence to substantiate a future claim will vary from case to case. 
Similarly, a fact-specific inquiry may justify specially crafted 
injunctive relief in certain cases, such as bans, performance bonds or 
document retention requirements for underlying study data. I look 
forward to working with my fellow Commissioners to continue to examine 
and evaluate our formulation of the competent and reliable scientific 
evidence standard, as well as the ancillary injunctive provisions in 
consent agreements, in order to best protect consumers from the costs 
imposed upon them by deceptive advertising while encouraging 
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competition and truthful advertising that benefits consumers.

[FR Doc. 2014-00560 Filed 1-14-14; 8:45 am]
BILLING CODE 6750-01-P