In the Fight For Healthy Labels, Is the FTC Overstepping its Boundaries?

The Federal Trade Commission are the good guys of the American marketplace. Their motto – “Protecting America’s Consumers” – tells you all you need to know. Their mission is clear-cut and wide-ranging:

The company also takes issue with the FTC’s reported habit of ignoring disclaimers on the allegedly misleading advertisements and treating all claims as statements about disease.

That last line, though, seems to be especially tricky. On more than one occasion, the FTC’s found itself under fire from companies complaining that its attempts to protect consumers ultimately ends up hurting businesses. Sometimes, these complaints can lead to legal action – as in the case of Pom Wonderful, LLC. The company, which produces pomegranate drinks and dietary supplements, went before a D.C. circuit panel last week asking them to overturn an FTC ruling that stopped Pom from making health-related claims in its marketing. The FTC says Pom is misleading consumers. Pom says the FTC has gone too far. So, which side makes the most sense? Let’s look at some facts.

What Exactly Is the FTC Asking for?

When Pom makes health-based claims about its products, it does so on the backs of several studies and questionnaires. Is that enough for the FTC? Not by a long shot, it turns out. The agency now requires at least two double-blind, randomized clinical trials, with placebo-controlled test subjects included to ensure the results are accurate. Once that’s done, any health benefits discovered during the trials can be listed in products’ marketing materials. As far as the FTC’s concerned, without these studies any and all health-related claims are misleading and potentially inaccurate. Pom says these requirements present far too high a threshold to be considered reasonable.

Why Doesn’t Pom Just Carry Out Those Studies, Then?

“It's all but impossible to perform a [randomized controlled trial] to the commission's standard,” Pom’s lawyer told the D.C. panel last week. The company also takes issue with the FTC’s reported habit of ignoring disclaimers on the allegedly misleading advertisements and treating all claims as statements about disease. “They infer any reference to the health of an organ to mean preventing or curing a disease,” Pom’s counsel says. Making changes to adhere to all FTC requests could well cost hundreds of millions of dollars, the company added, with professional, pharmaceutical-level studies seemingly the only ones deemed acceptable by the commission.

Why Is the FTC So Concerned with Pomegranate Juice?

The FTC is concerned with consumer protection, and Pom just happens to be the latest battle. The commission is also focusing on dietary supplements right now, releasing a snappily-titled guide for media companies aimed at helping them spot misleading claims before they’re ever published (Gut Check: A Reference Guide for Media on Spotting False Weight Loss Claims).

According to the commission:

Fair enough – no one wants to be misled into thinking a product will help them lose weight – but Pom remains adamant that in its case the FTC has come down too heavy handedly.

The FTC sees it differently. “The company has a record of distorting scientific results,” the FTC General Counsel told the panel, pointing out that the company made claims for several years regarding its Pom juice, Pomx pills, and Pomx liquid and their impact on heart disease, prostate cancer and erectile dysfunction. If those claims weren’t backed up by science, then the FTC absolutely has the right – and a duty – to take action against the company.

But Are There Any Real Downsides to Having Such Stringent Rules?

There may well be. Judge Merrick B. Garland, one of three judges sitting on the panel, raised concerns that the FTC’s requirements, being so strict, could hinder legitimate scientific data from being gathered and released. What if Pom, for example, found that their products did have an impact on heart disease, but only had a single study, and not two, to show their results? Without two controlled studies, the rules would not allow the company to make this claim. Isn’t that detrimental to the public health?

There’s no word from the FTC on whether they’ll relax their rules. If anything, the “Gut Check” campaign makes it seem likely they’ll stick to their guns. It’s not necessarily bad for consumers, just as long as a balance can be found between innovative companies hoping to show their products’ value and the FTC’s ongoing mission to ensure health-based claims are accurate.