Advertisers in the Ring – A Roundup of This Month's Competitor Advertising Challenges: Broad Performance Claims and Narrow Support

Below, we provide a high-level summary of NAD decisions from the past month. A summary of last month's NAD decisions can be found here.

Recent cases addressed dietary supplements, shampoos, razors ... and telecommunications. The dietary supplement and shampoo cases provide cautionary notes about overstating the benefits of products and ingredients, while the decision involving razors is a fairly rare example of claims that NAD determined to be so general as to require no substantiation. The telecommunications cases illustrate the importance of tailoring advertising claims to available substantiation and adequately qualifying and disclosing claims to avoid misleading or confusing consumers.

Dietary Supplements: "Big" Promises Get Discontinued

All Health Supplement Sys., LLC: Big "C" Dietary Supplements, Case No. 5837 (April 24, 2015). After being approached by the NAD through its initiative with the Council for Responsible Nutrition, the advertiser agreed to discontinue claims that its product contained ingredients shown to have "positive results in battling cancer" and that "70 percent of known causes of cancers are avoidable." NAD asserted that these unsubstantiated claims implied that the product could prevent, treat or manage cancer.

Silver Star Brands, Inc.: Native Remedies® A+ TestCalmer, Case No. 5840 (May 5, 2015).  NAD also proactively reviewed this advertising in connection with the Council for Responsible Nutrition initiative. The claims for this dietary supplement included that it was "for a calm mood and memory function during test taking" and "beneficial to students who are natural worriers," and advertising included a testimonial that it "reduced the pre-test (jitters) in my household tremendously … and their grades have even improved!" In response to NAD's inquiry, the advertiser informed NAD that it had recently acquired the manufacturer and had decided to stop selling the dietary supplement for business reasons. The advertiser agreed to remove all current marketing materials and not to produce new materials making those claims. 

Product Benefits vs Specific Ingredient Benefits

Vogue International, Inc.: OGX Shampoos and Conditioners, Case No. 5844 (May 8, 2015). In this case, Unilever challenged claims Vogue made in connection with its OGX shampoos and conditioners, arguing that the advertisements highlighting specific ingredients implied that those ingredients were present in material amounts and provided specific benefits. The particular claims at issue included statements like "renewing Argan oil of Morocco," "nourishing shampoo with coconut milk" and "anti-breakage shampoo with Keratin oil." NAD determined that the product names and packaging needed to make clear that the claimed benefits were for the overall product, not the highlighted ingredients. This is one of the rare cases where NAD has recommended that a product name be changed because it conveys what NAD determined was an unsubstantiated claim.

Telecom Cases Emphasize NAD Basics—Clearly Qualify Claims and Disclose the Basis of Support

Comcast Communications, Inc.: XFinity Internet Services, Case No. 5842 (May 6, 2015). In this case, competitor CenturyLink challenged Comcast's direct comparative claims that included "CenturyLink doesn't deliver" and "Xfinity gives you the fastest, most reliable internet." NAD recommended that Xfinity discontinue its unqualified "doesn't deliver" claim, but suggested that XFinity could rely on the FCC's annual Broadband report to support more narrowly tailored claims about the reliability of speed performance during peak periods. NAD further recommended that the voiceover in the commercial be modified to clearly identify the basis of the comparison for the performance-based speed claims. NAD found that Xfinity had adequately supported its "Xfinity gives you the fastest, most reliable internet" claim.

T-Mobile USA, Inc.: More Data Capacity, Case No. 5849 (May 29, 2015). In this matter, Verizon Wireless challenged T-Mobile advertising claims that its network was "designed data strong" and provided more data capacity. T-Mobile's advertising campaign included a map depicting a two-dimensional image of coverage, followed by a three-dimensional image described in the ad as showing "customer data usage." NAD concluded that T-Mobile's claims about more data capacity per customer were adequately supported by crowd-sourced data obtained from the "Ookla" speed test app, operating on consumers' devices. It also concluded that the claims were properly qualified in the context they were used, but recommended that T-Mobile modify its advertising to clarify that the capacity performance claims related to T-Mobile's LTE network. NAD also recommended that T-Mobile discontinue its use of the map because the coverage and usage data could potentially mislead consumers. 

Takeaways for This Month

A lesson from the cases of this month is that advertising claims that overstate or exaggerate benefits—whether because of a lack of substantiation or a failure to put the available substantiation in the proper context—pose risks to advertisers. Such claims will likely fare poorly before the NAD, and elsewhere as well.

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Other Articles in this Month's Edition:

• EU Parliament Votes in Favor of Mandatory EU Conflict Minerals Regime
• Drinking and Droning: Safety, Privacy, and Security Take Center Stage as the Legal Landscape Evolves
• CPSC's $3.4M Office Depot Penalty Settlement Highlights Enforcement Trends
• Business Transitions and Personal Information: Managing Privacy Risks
• Proposed Legislation to Create a Uniform Standard for 'Made in America' Labeling
• EU Court Finds That Food Label May Be Misleading Even If List of Ingredients Is Not

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