Product Claim Substantiation
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Substantiating a product claim is required by U.S. law and can help brands avoid regulatory action or provide an effective defense in litigation. For example, in April 2023, the US Federal Trade Commission (FTC), responsible for enforcing federal laws against anticompetitive, deceptive, or unfair business practices, sent notices to approximately 670 companies involved in the marketing of OTC drugs, homeopathic products, dietary supplements, or functional foods.[1] The agency placed the companies on notice that they could incur significant civil penalties — up to $50,120 per violation– if they fail to adequately substantiate their product claims. FTC specifically identified as unlawful those practices failing to have competent and reliable evidence for health or safety claims, misrepresenting the level or type of substantiation for a claim, or misrepresenting that a product claim has been scientifically or clinically proven.
While the notice focused on companies making, or likely to make, health claims, the FTC said the caution applies to any marketer making claims about the efficacy or performance of its products.
“The requirement for advertisers to have adequate support for their advertising claims at the time they’re made is a bedrock principle of FTC law,” said Sam Levine, Director of the FTC’s Bureau of Consumer Protection. “The prospect of steep civil penalties will help ensure that advertisers don’t play fast and loose with the truth.”
Avoiding litigation and regulation actions are clearly important but perhaps not the most significant benefit. Having clear and demonstrated claims builds trust in a company’s brand and consumers report that trusting the claims, along with cost and quality, are the most critical considerations in purchasing decisions.[2]
Cosmetic claims do not require FDA or FTC approval before products go on the market, nor is there a list of approved or accepted claims for cosmetics. However, guidance is available from many sources that can provide useful tools on how to evaluate your claims (Table 1). As a foundation your claims must be legally compliant, truthful, supported by evidence, honest, fair and allow informed decision-making by consumers.
TABLE 1
Source | Title | Available at: |
European Commission (July 2017) | Technical document on cosmetic claims | https://ec.europa.eu/docsroom/documents/24847 |
US Food and Drug Administration (November 2022) | Cosmetics Labeling Claims | https://www.fda.gov/cosmetics/cosmetics-labeling/cosmetics-labeling-claims |
US Federal Trade Commission (December 2022) | Health Products Compliance Guidance | https://www.ftc.gov/system/files/ftc_gov/pdf/Health-Guidance-508.pdf |
Australian Competition and Consumer Commission (December 2023) | Making Environmental Claims – A Guide for Business | https://www.accc.gov.au/about-us/publications/making-environmental-claims-a-guide-for-business |
Of recent note, a March 2024 decision dismissing a suit against a company making a “Clean Beauty” claim is instructive and highlights the care needed in communicating to consumers the benefits of a cosmetic product.[3]
The suit, brought in 2022, argued “clean” means the product is free of unnecessary and harmful components and made without synthetic chemicals that could harm the body, skin, or environment. As the product did contain synthetic chemicals the plaintiff charged the claim is misleading to consumers. In defense the company argued they had clearly defined what clean beauty means in the context of their products.
Judge David N. Hurd of the U.S. District Court in the Northern District of New York agreed with the defense and found the plaintiff failed to plausibly allege the company had misled reasonable consumers when it marketed and sold its cosmetics. “Nowhere on the label or in the marketing materials plaintiff cites does defendant make any claim that the products are free of all synthetic or harmful ingredients.”
To sum up we are reminded that the claims we make are valuable tools for communicating with consumers and care must be taken to be clear, accurate, and not misleading to consumers.
[2] The Conference Board CEO Trustee roundtable (February 26, 2024) “Consumer Trends: What to Expect in 2024—Insights from a CED Trustee Roundtable”, available at: https://www.conference-board.org/publications/consumer-trends-2024
[3]Finster v. Sephora USA Inc., No. 6:2022cv01187 – Document 20 (N.D.N.Y 2024) https://law.justia.com/cases/federal/district-courts/new-york/nyndce/6:2022cv01187/135685/20/
Posted in Cosmetics, Dietary Supplements, Drugs, Foods, Issue of the Month.