The Federal Trade Commission in early April notified 670 companies they could face monetary penalties if they’re found to be making unsubstantiated marketing claims.
The action came almost two years to the day that the agency suffered a big loss at the U.S. Supreme Court, which prohibited it from pursuing equitable monetary relief as part of its effort to enjoin companies in federal court for deceptive marketing practices.
Since that loss, the agency has tried to make clear it retains authority to penalize companies for making unsubstantiated claims about products and services. It can still use federal courts to get a permanent injunction against them, for instance, and it can still use its administrative proceedings to impose a fine.
“Receipt of a notice of penalty offenses puts your company on notice that engaging in conduct described therein could subject the company to civil penalties of up to $50,120 per violation,” the agency said in the Notice
Amazon, Archer Daniels Midland, Bayer, BASF, Danone, General Mills, Gerber, Herbalife and Johnson & Johnson are among the companies receiving notice.
Notification doesn’t mean the companies are guilty, the agency says. The goal is to spur them to examine their claims to ensure they’re substantiated by scientific or other evidence, depending on the type of claim, and that any endorsements are made by people who use the product or service and stand behind the claim, among other things.
“This letter does not reflect any...
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