William Rothbard – Explains Recent Losses For Federal Trade Commission

The Federal Trade Commission (FTC) has recently experienced legal losses due to overregulation of substantiation requirements for advertising claims, principally ones related to health. The setbacks, if they continue, could cost the FTC credibility with both the public and business and have the unfortunate effect of stifling product innovation. Well-established leader in advertising and regulatory law, William Rothbard has released an informative piece on the details of the FTC’s new found “slump” on his legal website, FTCAdLaw. By shedding light on the current issues facing the agency, Rothbard hopes to encourage an informed public and to reveal the realities of a small but mighty federal agency that has a massive influence on American business.

Most of the setbacks are related to the booming health-tech sector. Wearables, wellness apps, video chat and other health care trends are revolutionizing how consumers approach their own care, and investors and entrepreneurs are taking note. In 2014 alone, $6.5 billion was poured into health care ventures. This poses a huge challenge for the FTC, which has to keep up with the rapid growth, and establish a workable balance between the protection of consumers from overpromises of health benefits and the imperative of businesses to innovate and compete to provide those benefits. According to William Rothbard, the FTC has been challenging companies with a “one-size-fits-all clinical study requirement for health claims.” While logical in some cases, this blanket policy is beginning to backfire. According to the advertising attorney, in one important case between the FTC and health juice maker POM Wonderful, the court said “such a burdensome obligation could suppress accurate consumer information in violation of advertisers’ First Amendment rights to promote their products honestly.”

Rothbard is a former Senior Official of the Federal Trade Commission, where he served as an Advertising Attorney and Attorney Advisor to the Chairman from 1977 to 1984. He has specialized in marketing law and trade regulation for over 35 years. This makes him incredibly experienced and knowledgeable, possessing an in-depth understanding of the issues that the agency faces. He points out that the series of losses is unusual because the FTC has a high rate of success in its enforcement actions. Some examples include: reversal by the Eleventh Circuit Court of Appeal of a lower court ruling that had prohibited Hi-Tech Pharmaceuticals from proving weight loss claims with evidence other than randomized controlled trials (RCTs); reversal by the District of Columbia Court of Appeals of an FTC order that imposed a rigid requirement of two RCT’s against POM Wonderful to substantiate disease treatment claims for its juice products; and rejection of a “contempt of court” claim brought by the FTC against Bayer Corp. for violating an order by failing to substantiate claims for its probiotics supplements with an RCT. Most recently however, the FTC did get back on a track with a settlement against Lumos Labs, the creators of Luminosity, the so-called brain training app, for failing to have adequate evidence to support claims that it improves cognitive function.

William Rothbard - Explains Recent Losses For Federal Trade Commission
William Rothbard – Explains Recent Losses For Federal Trade Commission

William Rothbard is an accomplished Advertising Lawyer with over 35 years of experience in the field. He graduated from The University of Michigan and the University of California’s Hastings College of the Law, and then served at the FTC as an Advertising Attorney and Attorney Advisor to the FTC Chairman. Later, he served as Senior Counsel to the U.S. Senate Judiciary Committee, Subcommittee on Antitrust, Monopoly and Business Rights. His practice specializes on federal (FTC) and state regulation of the Direct Response and Interactive Advertising industries.


 

William Rothbard — Reveals Continued Conflict Within FTC Over Ad Regulation:

http://finance.yahoo.com/news/william-rothbard-reveals-continued-conflict-005511739.html

William Rothbard — Federal Trade Commission (FTC) Suffers Setback on Controlled Clinical Trials: http://www.reuters.com/article/idUSnMKWs093qa+1c0+MKW20160322

 

William Rothbard – Reveals Continued Conflict Within FTC Over Ad Regulation

William Rothbard - Reveals Continued Conflict Within FTC Over Ad Regulation
William Rothbard – Reveals Continued Conflict Within FTC Over Ad Regulation

SANTA MONICA, CA – Acclaimed advertising and regulatory attorney William Rothbard has commented on the continued conflict within the Federal Trade Commission over the proper standards for advertising regulation. A lawyer with experience on the subject and a former Senior FTC Official, Rothbard is a recognized expert on FTC advertising law. He has explained the details of the discord in the hope of informing the public of an important debate occurring at the highest levels of the agency that has significant implications for consumers, marketers and innovators.

Rothbard notes that the FTC is under immense pressure to understand and develop an appropriate regulatory response to the explosion of marketing for high-tech consumer gadgets. As technology continues to increase the number of ways consumers are plugged in, the agency finds itself with the difficult task of regulating what has been coined, ‘the Internet of things.’ According to tech CTO Dave Evans, 127 items are added to the internet every second. A major concern is whether regulation can keep up with a rapidly expanding virtual world and do so in a way that protects consumers from the risks of misinformation about important new products, such as health-related apps, while not running the risk of overregulating and dampening technological innovation. William Rothbard, who has an in-depth knowledge of the agency, worries that the FTC may be erring on the side of too stringent regulation – a concern shared by one side of the debate raging inside the agency.

In a recent settlement involving a family of health apps known as the ‘Mole Detective’ and the ‘Mel App,’ Rothbard has written that Republican FTC Commissioner Maureen Ohlhausen found herself at odds with the Democratic majority. The apps are intended to help consumers recognize moles that could potentially pose a risk of melanoma and encourage them to seek preventive care when needed. Ohlhausen dissented from the settlement because she felt it required too many types of claims for the apps and other health-related consumer products to be supported by randomized controlled trials, the most onerous and expensive form of scientific testing. She feared that imposing such a burden could chill innovation and the dissemination of useful, truthful health information to consumers.

With the resignation last year of the only other Republican FTC Commissioner, Rothbard writes that Commissioner Ohlhausen is now the “sole voice of restraint in this FTC’s relentless march to subject the widest possible berth of health-related claims to the requirement of controlled human clinical trials, rather than the more flexible, traditional standard of “competent and reliable scientific evidence” as determined by the experts in the relevant field. “The FTC, a non-scientific agency, is now aggressively usurping that role, deeming itself the ’expert’ and imposing a single, one-size-fits-all standard on which there is no clear scientific consensus outside the world of pharmaceutical testing.” Will consumers be worse off? Rothbard, along with Commissioner Ohlhausen, fears the answer could be yes.

William Rothbard is the founder of the Law Offices of William I. Rothbard in Los Angeles. With over 35 years of experience as an attorney with a specialization in advertising law and business litigation, and as a former Senior Official at the FTC, Rothbard is a highly respected leader in the field. Rothbard is an active speaker and writer and has served as the Editor of the California Bar journal ‘Competition’. He is a regular contributor to the Direct Response Marketing Alliance newsletter and blogs on FTC issues at www.FTCAdLaw.com

 

William Rothbard – On Avoiding FTC Actions: Presentation at Affiliate Summit West: http://www.reuters.com/article/idUSnMKWS1L4qa+1e8+MKW20150713

William Rothbard — Federal Trade Commission (FTC) Puts an End to ‘Gag Clause’: http://finance.yahoo.com/news/william-rothbard-federal-trade-commission-033810205.html

William Rothbard – Federal Trade Commission (FTC) Puts an End To ‘Gag Clause’

William Rothbard - Federal Trade Commission Puts an End To Gag Clause
William Rothbard – Federal Trade Commission Puts an End To Gag Clause

SANTA MONICA, CA – The consumer review has never had more power over the success or failure of companies and their products than it does today. Initially, customers were able to use the Internet to praise or condone purchases in a few forums, which had a limited effect. Now, however, reviews on retailer websites such as Amazon and review-specific websites like Yelp result in enough negative feedback being able to bury a product or service. Assuming the reviews are legitimate and well-founded, this is good news for the consumer, but not for the retailer or marketer who learns an item isn’t a good one, resulting in a retail ‘natural selection’. Advertising and Marketing Law authority, William Rothbard recently highlighted a case in which an online marketer attempted to silence its customers from giving negative reviews – and the Federal Trade Commission quickly acted.

Rothbard addresses a particular case involving a Florida-based weight loss marketer. The online company was selling ingestibles that it claimed were safe, effective, and comparable in effect to gastric bypass surgery. It asserted users could lose over 100 lbs. in one year while eating whatever they liked. It boasted it was “scientifically proven to have a 90% success rate” even though, in truth, it had no clinical studies at all,” Rothbard revealed. Further, he said, “the marketer used extremely questionable methods to secure positive reviews through promises of discounts and the use of paid bloggers that were not revealed to be such.” Unfortunately, few things are ‘too good to be true’ to the most desperate individuals, and the company used inflated and outlandish statements to rake in approximately $20 million.

Rothbard concedes that these claims and underhanded promotion methods “may have been what caught the FTC’s eye initially,” but what made this company a prime target was its audacious tactic of preventing the sharing of negative feedback. “It sought to accomplish this,” Rothbard stated, “through the insertion of a “Gag Clause” in its hyperlinked terms that consumers were not warned about and unknowingly agreed to as a condition of sale.” Bad reviews or damaging blog posts that ‘negatively impacted’ the company or its products could see them threatened with legal action — as some actually were. A positive promotion discount that lowered the price of the product from $1580 to $480 was a doubled edged sword — any customer disparaging the company or item would immediately be charged the full amount. The FTC quickly responded and shut the company down. “The FTC is using its ‘unfairness authority’ to challenge the Gag Clause,” Rothbard explained. “[It is] alleging it is unfair because it caused substantial consumer injury that was not reasonably avoidable and not outweighed by countervailing benefits to consumers or competition.” While this argument is sparingly used by the Commission, William Rothbard believes judges will not be reluctant to use it in  cases like this, adding: “If someone else would try attempt this, they will surely deserve and meet the same fate.”

William Rothbard has an over 30 year career in advertising law and served as an attorney with the Federal Trade Commission from 1977 and 1984. During that time, he served as Attorney-Advisor to then FTC Chairman Michael Pertschuk, as well as in several other positions within the agency. He later served as Counsel to the United States Senate Judiciary Committee. Rothbard’s expertise and credentials make him extremely well-qualified to counsel and represent clients in federal and state law enforcement matters involving advertising issues and to comment on current developments and matters of public interest in the field of advertising law and FTC regulation. A complete copy of Rothbard’s article is available to view at FTCAdLaw.com

 

William Rothbard — Federal Trade Commission (FTC) Suffers Setback on Controlled Clinical Trials: http://www.reuters.com/article/idUSnMKWs093qa+1c0+MKW20160322

William Rothbard – Explains Supreme Court’s Debate on Freezing Defendants’ Funds: http://finance.yahoo.com/news/william-rothbard-explains-supreme-courts-043544360.html 

William Rothbard – Federal Trade Commission (FTC) Suffers Setback on Controlled Clinical Trials

William Rothbard - Federal Trade Commission (FTC) Suffers Setback on Controlled Clinical Trials
William Rothbard – Federal Trade Commission (FTC) Suffers Setback on Controlled Clinical Trials

SANTA MONICA, CA – Marketing Law specialist William Rothbard is known for his keen eye regarding Federal Trade Commission actions with the potential to have a lasting effect on Ad Law. Having previously pinpointed and blogged about several FTC proceedings of legal consequence, he recently singled out the results of two cases as a notable setback to one of the Commission’s pursuits – mandating multiple Randomized Control Trials (RTCs) for health claims.

A primary objective of the Federal Trade Commission is to identify marketers that make inflated or false claims about products or services and hold them accountable. This battle reached a peak with the increased sales of dietary supplements over the Internet. Since such products do not require the same level of stringent testing as drugs do (namely, RCTs) and can enter the market without prior government approval, it is easier for supplement marketers to make extravagant claims. While the FTC has moved aggressively to address this problem, its demand for accountability soon transformed into what Rothbard refers to as a “crusade to mandate randomized controlled trials for health claims” for non-drug products. The pinnacle of this crusade may have been the FTC’s successful lawsuit against POM Wonderful, where the Commission ordered a remedy requiring at least two Randomized Trials to substantiate so-called ‘disease treatment’ claims. Last year, however, the U.S. Court of Appeals for the District of Columbia reversed this decision, ruling that a single trial was sufficient. “For other health claims,” Rothbard added, “the more flexible traditional standard of scientific evidence would still apply.”

Last year, a New Jersey federal district court overruled another attempt by the FTC to impose excessive testing requirements on supplement marketers, this time in a “contempt of court” case brought against Bayer. A 2007 consent order requires Bayer to have “competent and reliable scientific evidence” to support claims for its dietary supplement products.  The FTC claimed Bayer failed to meet this standard in advertising for its Phillips’ Colon Health (PCH) probiotic. Even though Bayer had numerous studies on the active ingredient, the FTC contended it was still in contempt for violating its order because the “competent and reliable scientific evidence” standard, in its view, required an RCT and Bayer had not done one on the product itself.

Rothbard pointed out that the court, in denying the contempt charge, found that the federal law regulating dietary supplements and the FTC’s own substantiation guidance do not require RCTs for supplement claims. Bayer could not be held in contempt for failing to do an RCT where neither the law, FTC guidelines, nor the term, “competent and reliable scientific evidence,” gave it fair warning that one was required. Despite the court’s decision, Rothbard strongly cautioned dietary supplement marketers to assume that the FTC will still expect them to conduct a Randomized Control Trial to support their claims and will hold them accountable if they don’t. “Nevertheless,” he noted, “in settlement negotiations and in court, they at least now have some fresh legal ammo with which to fire back.”

William Rothbard is a renowned business litigator and advertising and regulatory law specialist based in Los Angeles. A graduate of University of California’s Hastings College of the Law, his career spans over 35 years’ within his chosen field, including posts at the Federal Trade Commission as an Advertising Attorney and Attorney Advisor to the Chairman. This unique inside view allows him to give superior counsel to clients operating in the direct response advertising and online marketing industries. He also advises clients on trademark matters. Rothbard currently heads his own private practice where he specializes in Advertising Law, with particular focus on Federal Trade Commission and state advertising regulation.

 

 

William Rothbard – On Avoiding FTC Actions: Presentation at Affiliate Summit West: http://www.reuters.com/article/idUSnMKWS1L4qa+1e8+MKW20150713

William Rothbard – Speaks at National Ingredient Association Conference: http://www.msn.com/en-us/news/other/william-rothbard-speaks-at-national-ingredient-association-conference/ar-AAcWYUh

 

William Rothbard – Explains Supreme Court’s Debate on Freezing Defendants’ Funds

William Rothbard - Explains Supreme Court’s Debate on Freezing Defendants’ Funds
William Rothbard – Explains Supreme Court’s Debate on Freezing Defendants’ Funds

SANTA MONICA, CA – In light of recent controversy surrounding the freezing of “untainted” assets belonging to defendants facing trial in government fraud prosecutions, the United States Supreme Court has stepped in to rule on the practice. This important ruling, expected by June, will have important ramifications for US citizens, leading renowned California-based lawyer William Rothbard to take action. A veteran business litigator, he specializes in advertising law, with a specific focus on Federal Trade Commission regulation, and has over thirty years of experience in the field. When news broke that the issue was before the Supreme Court, Rothbard felt compelled to apply his expertise in explaining the situation to those most affected.

Writing on his website, www.FTCAdLaw.com, Rothbard described how freezing untainted assets held by a defendant facing trial could leave the individual unable to pay for legal counsel of his choice, violating the Sixth Amendment of the Constitution in a criminal case and basic fairness in a civil one. Untainted assets are those held by the defendant, which are not believed to be the “fruits” of the offense. Rothbard warns how depriving a person of the right to use “clean” funds in his defense gives the government a huge unfair advantage in criminal and civil prosecutions.

The Supreme Court’s debate over the legal and equitable implications of asset freezing arises in the case of Luis v. United States. The case saw Silva Luis – a nursing services and home-based healthcare provider – standing accused of fraudulently bilking the Medicare program of millions of dollars. After Luis was indicted, the federal government sought and obtained an injunction to freeze all her assets, including even untainted funds, for purposes of protecting a post-conviction recovery. In oral argument before the Supreme Court, Luis argued that a freeze on her untainted assets violated her Sixth Amendment right to have counsel of her choice. A number of Justices appeared to sympathize with her, although whether a majority do will not be known until the Court issues its decision. Depending on how the Court rules, Rothbard explains that the decision could have significant ramifications for the ability of defendants to challenge asset freezes in Federal Trade Commission cases.

William Rothbard has an over 30-year career in advertising law and served as an attorney with the Federal Trade Commission from 1977 and 1984. During that time, he served as Attorney-Advisor to then FTC Chairman Michael Pertschuk, as well as in several other positions within the agency. He later served as Counsel to the United States Senate Judiciary Committee. Rothbard’s expertise and credentials make him extremely well-qualified to counsel and represent clients in federal and state law enforcement matters involving advertising issues and to comment on current developments and matters of public interest in the field of advertising law and FTC regulation. A complete copy of Rothbard’s article is available to view at FTCAdLaw.com

William Rothbard – On Avoiding FTC Actions: Presentation at Affiliate Summit West: http://www.reuters.com/article/idUSnMKWS1L4qa+1e8+MKW20150713

William Rothbard – Identifies Issues Affecting Merchant Processors During Merchant Acquirers’ Committee Webinar: http://finance.yahoo.com/news/william-rothbard-identifies-issues-affecting-001426920.html

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William Rothbard – Identifies Issues Affecting Merchant Processors During Merchant Acquirers’ Committee Webinar

William Rothbard - Identifies Issues Affecting Merchant Processors During Merchant Acquirers’ Committee WebinarSANTA MONICA, CA – Attorney William Rothbard, a recognized expert in online and direct response advertising who served as a former senior staff official and Attorney Advisor to the Chairman with the Federal Trade Commission, recently presented a fact-filled seminar on the latest legal issues affecting merchant processors. Rothbard’s in-depth analysis of FTC regulatory and prosecutorial trends is an invaluable source of advice for any online marketing executive to receive, with a number of particularly insightful tips to help combat the regulatory threat.

William Rothbard stressed the fact that payments industry exposure to FTC risk has reached an all-time high, both in terms of the political environment and increased regulatory scrutiny of the merchants it serves. According to him, primary industries receiving particular FTC attention include services to financially distressed consumers, free trial options, dietary supplements, business opportunities, and affiliate marketing. Another potential FTC risk, Rothbard indicated, arises from the systemic complexity of processing relationships where every player within the multi-leveled processing chain – Independent Sales Organizations (ISOs), payment facilitators, hosting payment providers, and the like – faces potential liability for questionable business practices of their merchant-clients. The past 10 years have seen more than 20 significant actions against processors, several resulting in multi-million dollar judgments. Rothbard emphasized that the only way for processors to mitigate their FTC risk is to be active rather than reactive in confronting potential legal risks presented by their merchants. Rather than wait for a high chargeback alert, he suggests, best practices need to be adopted right away to maintain regular checks on merchants’ marketing and billing practices, applying continuous diligence, skilled personnel and automated monitoring tools.

Negative option marketing and weight loss claims are two hotbeds of FTC enforcement activity that processors need to be particularly aware of in managing their merchant-related legal exposure. Given a bad name by scammers who have abused consumers with the practice, deceptive negative option plans have come under fire by the FTC and can subject violators to significant restitution and civil penalty judgments under the FTC ACT and the Restore Online Shoppers’ Confidence Act (“ROSCA”), enacted by Congress in 2010. Rothbard noted that under these statutes, “all terms must be clearly and conspicuously disclosed before the consumer submits billing information, the consumer must give express informed consent to the offer, and cancellation must be easy.” He emphasized that the FTC is now routinely seeking ROSCA civil penalties as well as redress for consumers in its negative option enforcement cases.

Weight loss products also present FTC minefields. The more specific and numeric a claim of weight reduction, the greater the FTC risk to the merchant and, in turn, to the processor. ”Disease treatment” claims, like reducing heart attack risk by lowering cholesterol, or treating diabetes, are also squarely in the FTC’s crosshairs. Rothbard explained the reasoning behind these concerns: “The FTC requires at least one controlled human clinical trial for any claim of weight loss or disease treatment to be valid. Claims must accurately reflect the clinical findings and unless the scientific proof is absolutely conclusive, cliché claims like ‘clinically proven’ will be aggressively attacked by the FTC and should be avoided.”

William Rothbard has over three decades of experience as a business litigator and advertising and regulatory law specialist. He counsels businesses on regulatory compliance in the areas of marketing, advertising, direct response and Internet law in addition to trademark and copyright matters. He negotiates and prepares licensing, business, marketing, talent, production, media, distribution and website agreements on behalf of his clients and represents them in federal and state deceptive advertising and unfair competition matters.

William Rothbard – Speaks At National Ingredient Association Conference

William Rothbard - Speaks At National Ingredient Association ConferenceSANTA MONICA, CA – William Rothbard, a prominent national attorney with over three decades of experience in advertising and marketing law, took part in the annual conference of the National Ingredient Association held in Los Angeles, California. In addition to attending the different sessions, he actively participated by delivering a presentation titled ‘FTC V. SUPPLEMENTS’, which addressed the latest Federal Trade Commission (FTC) enforcement actions on dietary supplement claims. Rothbard’s speech was created especially for the event, which featured a panel of industry leaders to discuss a variety of regulatory challenges facing the natural ingredients industry

During his presentation, Rothbard stressed the need for advertisements and product claims to be truthful and well-substantiated, and emphasized that ingredient manufacturers and suppliers can be liable for facilitating deceptive consumer advertising by their trade customers. To underscore his point, he referred to a $3.5 million settlement the FTC recently obtained against Applied Sciences, a dietary supplement ingredient manufacturer that was accused of supplying false information to its trade customers to use in promoting Applied Sciences’ products. Addressing his audience, Rothbard emphasized the need to rely on competent and reliable scientific evidence, including controlled human clinical studies, rather than customer anecdotes, subjective consumer surveys, and manufacturer’s sales literature, to substantiate ingredient claims.

William Rothbard offered valuable advice on the need to prepare and act according to the FTC’s latest compliance actions and guidance. One of the important tips he offered was to have at least one controlled human clinical study to strengthen manufacturers’ efficacy and safety claims, especially on products that contain multi-ingredient formulas. Finally, to help supplement suppliers “survive in a hyper-aggressive regulatory environment”, Rothbard explained the value of having expert counsel who understands FTC thinking and enforcement strategies to avoid the legal and financial consequences of becoming an FTC target.

Formerly an Advertising Attorney with the FTC who also served as Attorney Advisor to Chairman at the FTC, William Rothbard has nearly four decades of experience in advertising and marketing regulation and defense of companies and individuals in federal and state law enforcement proceedings. A graduate of the University of Michigan and the University of California Hastings College of Law, he also served as Senior Counsel to the U.S. Senate Judiciary Committee, Subcommittee on Antitrust, Monopoly, and Business Rights.

William Rothbard – On Avoiding FTC Actions: Presentation at Affiliate Summit West

William Rothbard - On Avoiding FTC Actions- Presentation at Affiliate Summit WestSANTA MONICA, CA – Former Federal Trade Commission attorney, William Rothbard, recently presented valuable tips on avoiding FTC actions to attendees at premier affiliate marketing conference Affiliate Summit West. His presentation, entitled ‘Tips from an FTC Pro: How to be Smart and Avoid FTC Hell,’ first clarified the practices that would cause a business or individual to be targeted by the FTC – namely deceptive or unfair advertising. After defining these terms, he then outlined the actions that the FTC can take, ranging from cease and desist orders to the dreaded ex parte (without notice) temporary restraining order where the entire assets of a business and its owners can be frozen and the business can be forced into receivership.

Substantiation is an imperative part of maintaining FTC compliance, according to Rothbard, which means all objective claims must be supported by “competent and reliable evidence”, while performance, efficacy, health, and safety claims, whether expressed or implied, must be supported by “competent and reliable scientific evidence.” Health claims for dietary supplements and other natural products, such as those made by POM Wonderful that famously ran afoul of the FTC, were counted among the agency’s enforcement priorities; others included free trial/negative option marketing, affiliate fraud and deception and mobile (SMS) marketing. Endorsements and testimonials are also closely checked for veracity and disclosure of payment to lay-endorsers.

The veteran FTC attorney, William Rothbard, also examined the legal definition of ‘clear and conspicuous’ for affirmative disclosures that are required to prevent an advertisement from being misleading. Rothbard warned that simply including a disclosure will not ensure compliance. Rather, the disclosure must be prominent, presented in easy-to-understand and non-contradictory language, and placed in an area that is both sure to be seen by the consumer and near the text that is being qualified. He noted that the FTC is even starting to “micro-regulate” the color, font and type size of disclosures in evaluating whether they meet the “clear and conspicuous” standard. Of vital importance, especially in this age of e-commerce, is proper use of ‘negative option’ or ‘free trial’ billing. Given a bad name by scammers that have abused consumers with the practice, deceptive negative option plans have come under fire by the FTC and can subject violators to significant restitution and civil penalty judgments under the FTC Act and the Restore Online Shoppers’ Confidence Act (“ROSCA”), enacted by Congress in 2010. Rothbard noted that under these statutes, “all terms must be clearly and conspicuously disclosed before the consumer submits billing information, the consumer must give express informed consent to the offer, and cancellation must be easy.” He emphasized that the FTC is now routinely seeking ROSCA civil penalties as well as redress for consumers in its negative option enforcement cases.

William Rothbard then delved into the meat-and-potatoes of everyday FTC compliance efforts. He named responsive customer service – particularly with respect to cancellations and refunds — anti-affiliate fraud policies and procedures, and clear privacy policy terms, including the right to prevent sharing of personal data, as “must haves” to achieve compliance. Affiliates and Affiliate Networks are, among other responsibilities, required to act within the guidelines of the anti-spamming act CAN-SPAM and avoid fraudulent, confusing, or incentivized marketing. Citing a $30 million judgment the FTC recently won against LeadClick, an affiliate network that was found liable for deceptive advertising by its “sub-affiliates,” he said networks would be well-advised to review their affiliate compliance postures to mitigate their own risk of becoming an FTC target. He stressed that networks and affiliates also can have “cross liability” for a merchant’s advertising not only through actual knowledge but also negligence and “willful ignorance” of a merchant’s deceptive advertising practices. “Be aware of the hyper- aggressive FTC landscape,” Rothbard concluded, “and consult expert counsel who thoroughly understands the FTC’s thinking and enforcement strategies, so you have the benefit of sound advice to help you avoid ‘FTC Hell.’”

William Rothbard is an accomplished Advertising Lawyer with over 35 years of experience in the field. After graduating from The University of Michigan and the University of California’s Hastings College of the Law, he served at the FTC as an Advertising Attorney and Attorney Advisor to the FTC Chairman, and later as Senior Counsel to the U.S. Senate Judiciary Committee, Subcommittee on Antitrust, Monopoly and Business Rights. In 1995 he established his own practice in Los Angeles, California, where he specializes in Advertising and Marketing Law, with particular focus on federal (FTC) and state regulation of the Direct Response and Interactive Advertising industries.

William Rothbard – Discusses FTC v. POM Wonderful and Dr. Oz On His Blog “FTC AdAlert”

William Rothbard - Discusses FTC v. POM Wonderful and Dr. Oz On His Blog “FTC AdAlert”
William Rothbard – Discusses FTC v. POM Wonderful and Dr. Oz On His Blog “FTC AdAlert”

SANTA MONICA, CA – Advertisers’ free speech rights were recently vindicated in a major decision by the Federal Court Of Appeals sitting in Washington, D.C. The court reversed a split decision made by the Federal Trade Commission (FTC) which required food and beverage manufacturer POM Wonderful to have not one but two randomized controlled human trials (RCTs) for claims that its products help prevent, treat, or cure disease. William Rothbard, an expert in unfair competition and deceptive advertising, explains on his blog why the recent development is a significant victory for the Republican minority on the FTC, as well as for the dietary supplements industry.

In his article, Rothbard explains how the DC Court Of Appeals decided that requiring two RCTs was excessive and unjustified because it could suppress useful information for consumers, in violation of advertisers’ 1st Amendment rights to engage in truthful commercial speech for a lawful product. The court indicated that a more general, flexible standard of “competent and reliable scientific evidence,” limited to no more than one RCT, should be applied, and that an effective disclaimer to indicate a claim’s limitations or inconclusive nature would suffice, where needed. [source: http://www.cadc.uscourts.gov/internet/opinions.nsf/CF44C4FA22F615C585257DDD00549353/$file/13-1060-1535012.pdf]

William Rothbard, a former attorney with the FTC who has decades of experience in the ad law field, discusses elsewhere on his blog [source: http://www.ftcadlaw.com/ftc-commissioners-fight-over-free-speech-and-dr-oz-as-cout-settles-rct-debate/] that commercial speech was also in the spotlight recently in a separate FTC case against Genesis Today Inc. that involved statements made on the Dr. Oz Show. [source: http://dockets.justia.com/docket/texas/txwdce/1:2015cv00062/732880] The Democratic majority on the FTC felt that allegedly deceptive statements on Dr. Oz made by defendant Lindsay Duncan about the weight loss benefits of green coffee bean constituted commercial advertising subject to governmental regulation even though Duncan did not mention a specific product or offer. The dissenting Republican minority strongly disagreed, feeling Duncan’s appearance on a talk show was non-commercial in nature and thus fully protected by the 1st Amendment even if what he said was not factually correct.

Rothbard discusses how the two sides on the FTC applied their accepted criteria for defining commercial speech in reaching their different conclusions. The majority argued that despite not mentioning a specific product or price, Duncan’s appearance on Dr. Oz was commercial because he had an economic motivation for appearing and in effect was promoting his green coffee brand by discussing specific attributes of green coffee as a weight loss aid. Using the same factors, the minority argued the appearance was not commercial because Duncan did not mention his product or price or propose a commercial transaction. The Republican commissioners warned that the majority’s interpretation of commercial speech in this context was so broad that it would discourage nutraceutical industry representatives’ from engaging in public discussion of important health issues even in non-commercial venues such as talk shows.

Rothbard noted that while Dr. Oz also effusively endorsed the weight loss benefits of green coffee bean, which gave a tremendous boost to the industry generally and Duncan’s product specifically, as the host, and without any financial ties to the defendants, his speech was fully protected under the 1st Amendment.

Siding with the FTC minority, Rothbard expresses the hope that the agency’s obsession with the “Dr. Oz effect” is passing and that the “Duncan Affair” is a one-off. He calls on the FTC’s “propensity for regulatory overreach [to be] tempered by the D.C. Circuit’s ’slap on the wrist’ in POM Wonderful, not only on excessive substantiation demands but on an over-expansive, speech-chilling definition of commercial advertising.”

William Rothbard has been a business litigator and advertising law specialist for more than 30 years. He has widespread experience counseling advertisers and representing them in state and federal unfair competition and deceptive advertising proceedings. Prior to entering private practice he was an advertising enforcement attorney with the Federal Trade Commission and an attorney adviser to the FTC Chairman. A graduate of the University of Michigan and the University of California Hastings College of Law, he also served as Senior Counsel to the U.S. Senate Judiciary Committee, Subcommittee on Antitrust, Monopoly, and Business Rights. For more information, visit: http://williamrothbardnews.com/