The Bottom Line
- The 2024 NAD annual conference is underway and the first day of the conference featured discussion of some of the most prevalent types of claims, from comparative superiority claims to performance claims.
- FTC priorities, including junk fees, subscription services, and unwanted telemarketing calls, were outlined by Bureau of Consumer Protection Director Sam Levine.
- Stay tuned for highlights from the second day of the NAD conference.
The first day of the BBB National Programs’ 2024 National Advertising Division (NAD) annual conference focused on fundamental legal issues for advertisers, including comparative advertising claims, puffery, environmental marketing, disclosure, and more.
Here are some highlights from the first day of the NAD conference:
Key 2024 NAD Cases
The NAD provided an overview of the most frequently challenged areas in 2024 and highlighted some important decisions, including:
Comparative Claims
- In Comcast Cable Communications Management, LLC (Comcast Xfinity Internet Service), NAD determined that a humorous commercial (depicting athletic performance, rather than internet usage) did not convey a broad comparative advertising claim, but rather highlighted truthful monadic claims about the advertised internet service.
- In BA SPORTS NUTRITION, LLC (BodyArmor Flash I.V. Sports Drink), Old Trapper Smoked Products, Inc. (Old Trapper Smoked Beef Jerky), and Royal Oak Enterprises, LLC (Royal Oak Super Size Briquets), NAD determined that “best” claims did not constitute puffery in contexts tied to measurable performance attributes.
Cleaning Claims
- In The Procter & Gamble Company (Dawn® Platinum Dishwashing Liquid), NAD determined that a 99% food and grease removal claim conveyed a comparative performance message, rather than a monadic claim, in part because the claim appeared in advertising referencing and depicting competitive dish soaps.
- In Glad Products Company (Glad ForceFlex MaxStrength Drawstring Bags), NAD found that a “25% more durable” claim was misleading because the basis of comparison was not adequately disclosed – but, on appeal, NARB panelists found that the claim was not misleading because it included an asterisk (to signal that more information is available), or because the claim was inherently non-misleading (as it made for a product line extension and comparing to the standard product).
- In HoldOn Bags Inc. (HoldOn Trash Bags), a claim about trash bags breaking down in compost environments required modification to clearly and conspicuously disclose the circumstances in which the bag would degrade, compost, or “break down.”
Disclosures
- In Cube Planning, Inc. (Datarails Software), NAD reviewed advertising appearing on “The Finance Weekly” website and determined that Datarails had a material connection to the website that required disclosure. While Datarails denied knowledge of the rating and ranking criteria of The Finance Weekly, NAD determined that these endorsements constituted expert endorsements. Therefore, Datarails was obligated to ensure that endorsers have the correct experience to review the product and use such expertise when reviewing.
Health and Wellness
- In Unilever United States, Inc. (Degree Advanced Antiperspirant), NAD determined that claims made in a social media campaign about a product’s ability to prevent visible sweat marks were overstated, in light of evidence about the product reducing sweat (rather than eliminating visible sweat completely).
- Similarly, in ASO LLC (Hydrocolloid Gel Bandages), NAD determined that evidence suggesting that hydrocolloid bandages may speed the wound healing process did not reasonably support a claim that hydrocolloids have been shown to heal up to 2x faster than dry bandages.
- In Happy Mammoth (Hormone Harmony), an independent monitoring action, NAD determined that ingredient-specific data was insufficient to support certain claims about overall product performance.
Claim Substantiation
The conference included considerable discussion of claim support – both when a claim crosses the line from puffery (not requiring support) to an objectively provable claim (requiring support), and on how to best support claims.
- In cases involving “ultimate” claims, such as “ultimate immune system support” and “ultimate energy bar,” NAD has determined that a claim is non-puffery when presented in a context with objectively measurable attributes.
- In cases involving “best” claims, like “best tasting,” “world’s best glass cleaner” and “world’s best fruit and vegetable juice,” NAD conducts the same analysis – but seemingly has found that “world’s best” claims are more likely to constitute puffery that simply “best” claims.
NAD requires that advertisers provide a “reasonable basis” to support claims, and often looks to industry standards (like ASTM standards) to inform such. In cases where there is no relevant industry standard, NAD conducts a close examination of the testing provided to determine if it is sufficient and reliable to support the claim.
- In The Procter & Gamble Company (Febreze), NAD reviewed around 150 pages of expert reports discussing the nature testing and support for an “eliminates odors” claim, ultimately determining that the testing was not a good fit for the claim. Trained odor panelists focused on odor reduction, rather than elimination, and analytical testing was conducted in a small chamber, rather than a more consumer-relevant size room.
- Similarly, in Kimberly Clark Inc. (Huggies Diapers), NAD determined that testing developed to support a “best fitting” diaper claim was not sufficient because the testing focused narrowly on measures of diaper shift – but a claim about “fit” was reasonably broader.
FTC Priorities
At the conference, FTC Bureau of Consumer Protection Director Sam Levine outlined the agency’s priorities. Levine emphasized that:
- The FTC is focused on junk fees and subscriptions – particularly subscription services that are too difficult to cancel. While the FTC’s proposed click-to-cancel rule is still pending, Levine urged companies to follow the rule now (rather than wait for finalization), as the FTC has and will bring cases under existing law.
- The FTC is cracking down on unwanted telemarketing calls, deceptive auto sales practices, misleading educational marketing and deceptive practices targeting renters.
- The FTC has recently brought enforcement actions against sellers of business opportunities and multi-level marketers, as well as tax preparation companies and companies that failed to sufficiently provide consumers with the ability to repair products.
- AI remains a priority for the Commission – the FTC announced a final rule prohibiting the use of AI to generate fake consumer reviews, testimonials, and other unfair or deceptive practices, proposed a rule that would prohibit the use of AI to impersonate individuals, governments, or businesses, and clarified that AI robocalls are not exempt from the Telemarketing Sales Rule.
P.S., for all those wondering, Levine did not provide an update on the timing for the revised Green Guides.
Stay tuned for highlights from Day 2 of the NAD conference.