In its opinion in In re California Naturel, Inc., the Federal Trade Commission held that the California Naturel, Inc. advertising promoting its "all natural" sunscreen on its website as containing "only the purest, most luxurious and effective ingredients found in nature" violated Section 5 and 12 of the FTC Act. The opinion, written by Chairwoman Edith Ramirez, noted that California Naturel admitted that eight percent of its sunscreen formula is in fact dimethicone, a synthetic ingredient.
The FTC rejected the company's argument that its ingredient list and a disclaimer recently added to its webpage cured any misleading advertising, noting that the disclaimer appeared well below the "Add to Cart" button and that consumers should not have to search for and dig out information that contradicts express and prominent "all natural" and containing "only the purest, most luxurious and effective ingredients found in nature" misrepresentations. The FTC noted that an "intent to deceive" is not an element of a Section 5 FTC violation.
The Commission's final order prohibits California Naturel from misrepresenting (1) whether a product is all natural or 100% natural; (2) the extent to which a product contains any natural or synthetic ingredient; (3) the ingredients or composition of its products; and (4) the environmental or health benefits of such a product. It also requires the company to have competent and reliable evidence to support any of the four foregoing claims it makes about any of its products.
The final order and accompanying opinion resulted from an administrative complaint issued against California Naturel on April 11, 2016. FTC staff trying the case requested the summary decision.
The Commission vote approving the Commission Opinion and Final Order was 3-0, with Commissioner Maureen Ohlhausen dissenting in part and issuing a separate statement. In her statement, Commissioner Ohlhausen agrees that California Naturel's unqualified "all natural" claims were false and misleading in violation of Sections 5 and 12 at the time they were made, but disagrees with the Commission's grant of summary decision regarding the effect of California Naturel's later-added disclaimers because in her view, that issue was not properly before the Commission. The company may file a petition for review of the Commission Opinion and Final Order with a United States Court of Appeals within 60 days of when the Order is served.
This decision is a reminder that the FTC requires that claims such as "all natural" and containing "only the purest, most luxurious and effective ingredients found in nature" be supported by competent and reliable evidence, including scientific evidence and the expertise of professionals. The use of disclaimers, especially when they are not prominently featured, well below the "Add to Cart" button and before clicking "Order Now," and can only be viewed without scrolling down, is not sufficient to be an effective disclosure and remedy a false advertisement. Care should be taken to follow the FTC recommendations regarding effective disclosures in digital advertising and consulting with counsel.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.