[Federal Register Volume 86, Number 66 (Thursday, April 8, 2021)]
[Notices]
[Pages 18285-18287]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-07217]


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FEDERAL TRADE COMMISSION

[File No. 192 3088]


BASF SE and DIEM Labs; Analysis of Proposed Consent Orders To Aid 
Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement; request for comment.

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

DATES: Comments must be received on or before May 10, 2021.

ADDRESSES: Interested parties may file comments online or on paper by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Please write ``BASF SE; File 
No. 192 3088'' on your comment, and file your comment online at https://www.regulations.gov by following the instructions on the web-based 
form. If you prefer to file your comment on paper, mail your comment to 
the following address: Federal Trade Commission, Office of the 
Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex D), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 
20024.

FOR FURTHER INFORMATION CONTACT: Janet Evans (202-326-2125), Bureau of 
Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue 
NW, Washington, DC 20580.

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 orders 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 agreements and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement packages can be obtained 
at https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before May 10, 2021. 
Write ``BASF SE; File No. 192 3088'' 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 
https://www.regulations.gov website.
    Due to the COVID-19 public health emergency and the agency's 
heightened security screening, postal mail addressed to the Commission 
will be subject to delay. We strongly encourage you to submit your 
comments online through the https://www.regulations.gov website.
    If you prefer to file your comment on paper, write ``BASF SE; File 
No. 192 3088'' on your comment and on the envelope, and mail it to the 
following address: Federal Trade Commission, Office of the Secretary, 
600 Pennsylvania Avenue NW, Suite CC-5610 (Annex D), Washington, DC 
20580; or deliver your comment to the following address: Federal Trade 
Commission, Office of the Secretary, Constitution Center, 400 7th 
Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If 
possible, submit your paper comment to the Commission by courier or 
overnight service.
    Because your comment will be placed on the publicly accessible 
website at https://www.regulations.gov, you are solely responsible for 
making sure your comment does not include any sensitive or confidential 
information. In particular, your comment should not include sensitive 
personal information, such as your or anyone else'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 your comment does not include 
sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
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)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    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). 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). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the https://www.regulations.gov website--as legally

[[Page 18286]]

required by FTC Rule 4.9(b)--we cannot redact or remove your comment 
from that website, unless you submit a confidentiality request that 
meets the requirements for such treatment under FTC Rule 4.9(c), and 
the General Counsel grants that request.
    Visit the FTC website at http://www.ftc.gov to read this Notice and 
the news release describing the proposed settlement. 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 May 10, 2021. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Proposed Consent Orders To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an agreement containing a consent order with BASF SE 
and BASF Corporation (``BASF Respondents''). It also has accepted, 
subject to final approval, an agreement containing a consent order with 
DIEM Labs, LLC, and others (``DIEM Respondents''). The proposed consent 
orders have been placed on the public record for 30 days for receipt of 
comments from interested persons. Comments received during this period 
will become part of the public record. After 30 days, the Commission 
will again review the agreements and the comments received, and will 
decide whether it should withdraw from one or both of the agreements 
and take appropriate actions, or make final the agreements' proposed 
orders.
    This matter involves Respondents' advertising for Hepaxa and Hepaxa 
PD capsules containing omega-3 fatty acids. The Commission's proposed 
complaint alleges that advertising for the Hepaxa products represented 
that Hepaxa reduces liver fat in most adults with Nonalcoholic Fatty 
Liver Disease (``NAFLD'') within six months, and that Hepaxa PD reduces 
liver fat in most children with NAFLD within six months. The complaint 
further alleges that Respondents' advertising represented that tests 
prove that Hepaxa reduces liver fat in adults with NAFLD and that tests 
prove that Hepaxa PD reduces liver fat in children with NAFLD. 
According to the proposed complaint, these claims are false or 
misleading, or were not substantiated at the time the representations 
were made, in violation of Sections 5 and 12 of the FTC Act.
    The proposed orders include injunctive relief that prohibits these 
alleged violations and fences in similar and related conduct. The 
proposed orders against the BASF Respondents and DIEM Respondents are 
substantially similar. In both orders, ``Covered Products'' is defined 
as Hepaxa, Hepaxa PD, and any other Dietary Supplement, Food, or Drug 
that contains one or more omega-3 fatty acids or is promoted by a 
Respondent or its subsidiary to benefit cardiac, metabolic, or hepatic 
health or functions, including the prevention, mitigation, treatment, 
or cure of any disease of such systems.
    Part I of the orders prohibits Respondents from making any 
representation that a Covered Product reduces liver fat in adults or 
children with Non-alcoholic Fatty Liver Disease (NAFLD), or cures, 
mitigates, or treats any disease, including but not limited to liver 
disease, unless the representation is nonmisleading, including that, at 
the time such representation is made, they possess and rely upon 
competent and reliable scientific evidence that substantiates that the 
representation is true.
    For purposes of Part I, competent and reliable scientific evidence 
must consist of human clinical testing of the covered product, or of an 
essentially equivalent product, that is sufficient in quality and 
quantity based on standards generally accepted by experts in the 
relevant disease, condition, or function to which the representation 
relates, when considered in light of the entire body of relevant and 
reliable scientific evidence, to substantiate that the representation 
is true. Such testing must be: (1) Randomized, double-blind, and 
placebo-controlled; and (2) conducted by researchers qualified by 
training and experience to conduct such testing.
    Part II prohibits Respondents from making any representation, other 
than representations covered under Part I, about the health benefits, 
performance, efficacy, safety, or side effects of any covered product, 
unless the representation is non-misleading, and, at the time of making 
such representation, they possess and rely upon competent and reliable 
scientific evidence that is sufficient in quality and quantity based on 
standards generally accepted by experts in the relevant disease, 
condition, or function to which the representation relates, 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 II, ``competent and reliable scientific 
evidence'' means tests, analyses, research, or studies that (1) have 
been conducted and evaluated in an objective manner by experts in the 
relevant disease, condition, or function to which the representation 
relates; (2) that are generally accepted by such experts to yield 
accurate and reliable results; and (3) that are randomized, double-
blind, and placebo-controlled human clinical testing of the covered 
product, or of an essentially equivalent product, when such experts 
would generally require such human clinical testing to substantiate 
that the representation is true.
    Part III prohibits misrepresentations about tests and studies. Part 
IV provides Respondents a safe harbor for making claims approved by the 
Food and Drug Administration (``FDA''). Part V requires that, with 
regard to any human clinical test or study upon which Respondents rely 
to substantiate any claim covered by the orders, Respondents must 
secure and preserve all underlying or supporting data and documents 
generally accepted by experts in the field as relevant to an assessment 
of a test.
    Part VI provides for monetary relief, and Part VII describes the 
procedures and legal rights related those payments. Together, 
Respondents are paying the full amount of consumer injury, $416,914.00. 
DIEM Order Part VIII requires the company to provide sufficient 
customer information to enable the Commission to efficiently administer 
consumer redress to purchasers of Hepaxa and Hepaxa PD.
    DIEM Order Part IX and BASF Order Part VIII require Respondents to 
submit acknowledgments of receipts of the order. DIEM Order Part X and 
BASF Order Part IX require the filing of compliance reports with the 
Commission, including notification to the Commission of bankruptcy 
filings or changes in corporate structure that might affect compliance 
obligations. DIEM Order Part XI and BASF Order Part X contain 
recordkeeping requirements. DIEM Order Part XII and BASF Order XI 
contain other requirements related to the Commission's monitoring of 
Respondents' order compliance. Finally, DIEM Order Part XIII and BASF 
Order Part XII state that the orders will remain in effect for 20 
years, with certain exceptions.
    The purpose of this analysis is to facilitate public comment on the 
orders, and it is not intended to constitute an official interpretation 
of the complaint or orders, or to modify the orders' terms in any way.


[[Page 18287]]


    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2021-07217 Filed 4-7-21; 8:45 am]
BILLING CODE 6750-01-P