Internet & Social Media Law Blog
Society is driven by word-of-mouth endorsements. Likewise, it’s instinctive to share self-prescribed remedies that alleviate our various ailments. A colleague recommends ginger tea for a cold. A friend tells you how lavender essential oil helps with anxiety and insomnia. We habitually rely on such recommendations. However, a business making such statements must be careful that any claims are substantiated and that marketing efforts do not run afoul of any laws or regulations. This is especially true now, where consumers are desperately hunting for hygienic methods to prevent the spread of the novel coronavirus and to treat symptoms stemming from COVID-19. Amidst the seemingly uncontrollable COVID-19 pandemic, it might seem like the perfect time for dietary supplement manufacturers and holistic medicine practitioners to tout the benefits of their products and services. But is it?
COVID-19 Advertising Blunders
Hand sanitizer—one of the most coveted products since the arrival of COVID-19—is on Craigslist for 10 times its normal price. After all, it is now widely accepted that hand sanitizer is a useful tool to prevent the spread of germs, right? Some California consumers are doubtful. A suit against Vi-Jon Inc. for false advertising, misrepresentation and unfair competition alleges that sections of the Germ-X website lead consumers to believe that the government recommends the alcohol-based hand sanitizer for virus prevention. According to the complaint, the website included sections called “Seasonal Illness” and “CDC Resources.” The product was also allegedly marketed as being “meant for coronavirus/flu prevention” on the websites of third-party retailers. Such a suit might seem alarming in light of the CDC’s recommendation that people use alcohol-based hand sanitizers to “prevent transmission of pathogens.” However, suits like these remind us that companies must still be careful in their marketing approach.
Some companies have received warnings from the Federal Trade Commission (FTC) and the Food & Drug Administration (FDA) based on their unsubstantiated coronavirus claims. Quinessence Aromatherapy Ltd received a warning letter for claiming that essential oils protect against coronavirus. The agencies alleged that Quinessence even listed the “most powerful anti-virus essential oils” for defending against the virus, such as basil, cinnamon, niaouli and sage. Per the FDA’s letter, the company claimed the oils could be used to avoid infection until a cure has been developed. The FDA was unimpressed with Quinessence’s claims, determining that the products were unapproved new drugs sold in violation of section 505(a) of the Federal Food, Drug, and Cosmetic Act (FDCA).
In another example, a manufacturer of colloidal silver claimed that it is “still the only known anti-viral supplement to kill all seven of these Human Coronaviruses.” This company, Xephyr LLC, also received a warning letter from the FTC and the FDA. As outlined in the letter, Xephyr described preventing the contraction of the novel coronavirus as “elementary” and claimed that “Colloidal Silver 100 ppm … has worked effectively on coronaviruses successfully for the last 123 years.” According to the FDA, the company has taken corrective action regarding its claims.
Even seemingly ambiguous claims such as “it works well” can get you in trouble. According to the warning letter from the FTC and the FDA, Vivify Holistic Clinic claimed that boneset tea “works well” for other coronavirus infections. This company has also been listed on the FDA website as having taken corrective action.
While the above examples focused on claims made by companies, claims by individuals can be actionable too. For instance, the New York Attorney General ordered Alex Jones to cease and desist marketing toothpaste and creams as preventative treatments and cures for the coronavirus.
While some of these coronavirus claims may sound unbelievable, it is important to consider how they might sound to a consumer who is desperate to find a way to keep their loved ones and themselves healthy during this unprecedented time.
Claims Must Be Truthful and Non-Deceptive
Given that there is currently no accepted cure for COVID-19 and that research and testing into cures and treatments are ongoing, it may be confusing as to what a company is allowed to say about the efficacy or applications of its products or services. Can a company find itself liable for claims made based on early or anecdotal evidence? Possibly. The FTC requires advertising to be both truthful and non-deceptive. Assessing whether claims are “truthful” can be tricky when there is still so much unknown about the virus and the disease it causes. But companies need to be very careful when extrapolating claims. It is truthful for me to say that sipping ginger tea made me feel better when I had a cold. But selling ginger capsules claiming that ginger cures the common cold is entirely different.
Though the line on how far one can push marketing claims can often be blurry, the standard for deception is clear. Advertising content is deceptive if the representation, omission or practice is: (1) likely to mislead the consumer and (2) material, or likely to affect the consumer’s decision with respect to the advertised product. The FTC analyzes the overall impression of an advertisement. All reasonable conclusions that can be made from the ad—both express and implied—must be substantiated by a “reasonable basis.” For health claims, the FTC requires “competent and reliable scientific evidence.” In recent enforcement letters sent to companies promoting COVID-19 remedies, the FTC stated that reliable evidence includes “well-controlled human clinical studies substantiating that the claims are true at the time they are made.”
The FDA has a stake in controlling product and treatment claims, as well. Responsible for protecting the public health, the FDA oversees the safety and labeling of cosmetics, foods and drugs, including supplements. The FDCA requires FDA approval and accurate labeling of products making express or implied advertising claims regarding the mitigation, prevention, treatment, cure or diagnosis of disease. In the previously mentioned warning letters, the FDA determined that the products were intended to mitigate, prevent, treat, cure or diagnose COVID-19 in people and were therefore in violation of the FDCA.
Protect Your Brand While Protecting Consumers
Given the overall financial uncertainty throughout the global economy, it might be tempting to try to boost your sales by touting how your product or service can help with the current pandemic. However, take a cautious approach. Marketing that appears to take advantage of consumer panic and fear during a global pandemic can easily run afoul of various laws and regulations. Furthermore, such sales tactics risk negative consumer backlash should they offend the public’s sense of morality. This is especially true when considering that those who are most vulnerable—the elderly and those with preexisting conditions—are most likely to purchase products out of fear and interpret marketing claims out of context (despite what the fine print might say).
In view of those risks, it’s important to consider the following steps to reduce the risk of finding your company on the receiving end of an FTC or FDA letter or the subject of a campaign (litigation, social media, or otherwise) brought by angry consumers.
Pay attention to competitors. If your competitor is being sued over a similar product, investigate their product claims, the merit of such claims, and the causes of actions that they are facing. Make sure you are not making similarly problematic claims about your product.
Refrain from tying your product to a specific disease or illness. As shown in the warning letter to GOJO Industries Inc., such associations can be construed as evidence of the product’s intended use. This can bring you into the category of drugs intended for the diagnosis, cure, mitigation, treatment, or prevention of disease. As a “new drug” under section 201(p) of the FDCA, products cannot be introduced or delivered for introduction into interstate commerce without prior FDA approval.
Only describe the product’s general intended use. Making claims about a product’s ability to “prevent the spread of infection” goes beyond a mere description of its general intended use and can lead to trouble absent “adequate and well-controlled clinical trials in the published literature” that support such claims.
View your product from the paranoid consumer’s perspective. Be careful in times of widespread public fear, where consumers are more vulnerable to deceptive advertising and are more likely to read marketing claims out of context. Examine your marketing claims to make sure they will not be viewed as capitalizing on consumers’ fear.
Remember, this pandemic will pass. But your disclosure obligations and the impression you leave on consumers during this time will remain.