The rise in popularity of social networking websites and blogs has extended the reach of a single consumer’s opinion about a brand or its products or services. In fact, prior to purchasing goods or services, consumers frequently review what other consumers have said about the brand or its products or services online. Given the power of consumer testimonials, savvy brands have explored various means of incentivizing positive consumer conversation about their brand online or explored ways to produce content which mimics positive consumer conversation.
By: Michelle Schaefer and Alexandra Marzelli (Washington, DC)
In September, the U.S. Federal Trade Commission (“FTC”) — the consumer protection agency tasked with regulating U.S. advertising practices for consumer goods — warned companies selling apparel and footwear in the U.S. that all health and fitness claims must be substantiated by competent and reliable scientific evidence. This warning came from the FTC’s lawsuit against Reebok International Lmtd. (“Reebok”), for alleged deceptive practices related to certain footwear including running sneakers, walking sneakers and flip-flops. Reebok was charged with making “unsubstantiated claims” that the footwear provides extra tone and strength to key muscle groups (including the buttocks, hamstrings and calves) and strengthens various muscle groups by a certain percentage. Under the settlement, Reebok agreed to pay $25 million in refunds to consumers. Reebok has stated that the settlement does not indicate agreement with the FTC’s allegations and it will continue to sell the products at issue, but will market them differently.
The Federal Trade Commission (FTC) recently entered a settlement order with Reebok International Ltd. to resolve charges that the company deceptively advertised that its “toning shoes” would provide extra tone and strength to leg and buttock muscles. The settlement arises out of an action the FTC brought in the United States District Court for the Northern District of Ohio alleging the Reebok engaged in deceptive acts or practices and false advertisements in violation of Sections 5(a) and 12 of the FTC Act. Among other things, the FTC took issue with a TV ad in which a fit woman explains to the audience the benefits of the toning shoe, pointing to a chart that showing that the shoes are proven to strengthen hamstrings and calves up to 11 percent and tone the buttocks up to “28 more than regular sneakers, just by walking.” The FTC also contended that the use of the word “tone” in the product name was deceptive. The FTC’s contention was that these claims were deceptive because they not supported by adequate substantiation.