Speaking at the fifth annual KombuchaKon conference organized by Kombucha Brewers International, Greenberg Traurig shareholder and leading food law attorney Justin Prochnow reminded delegates that if you list your website, facebook page or other social media platforms on your product label, they effectively count as an extension of that label from a legal perspective, and the FDA – and plaintiff’s attorneys – are paying close attention.
"Social media is generally not labeling, but companies still have to be aware that FDA can use claims made on social media as evidence of intent," he added.
And while you are not responsible for over-enthusiastic reviews on Amazon, blog or facebook posts that claim your product cures cancer or twitter postings from third parties waxing lyrical about your products’ health benefits, you effectively ‘own’ them if you share or even ‘like’ them, he said.
“You are not responsible for other people’s views and statements, but if you share, retweet or repost that on your social media platforms or other marketing materials, it’s the same as if you are saying it yourself.”
Is a 'like' or a retweet an endorsement?
The earliest example of this heightened level of scrutiny came via a warning letter to AMARC Enterprises, Inc in late 2012, in which the FDA noted that a testimonial posted by a consumer on the firm’s facebook page claiming that one of its dietary supplements “enabled me to keep cancer at bay without the use of chemo and radiation,” was ‘liked’ by the company.
As the posting amounted to an unauthorized drug-claim and AMARC had effectively 'endorsed' it by 'liking' it on its facebook page, the FDA included this as one of several examples of the company promoting a dietary supplement “for conditions that cause the product to be a drug.”
FDA also disapproved of a link on AMARC's facebook page taking readers to a blog article entitled, ‘Children with Cancer Often Use Alternative Approaches.'
In more recent warning letters - for example this letter to dōTERRA International, LLC in 2014 - the FDA has taken issue with claims made by distributors on Facebook, Twitter, Pinterest, and YouTube, he noted.
Sharing or ‘liking’ unauthorized claims from third parties, or even forming an association in consumers’ minds between a disease and a food or supplement, could be construed as making an implied disease claim, added Prochnow. And while the odd ill-advised ‘like’ is unlikely to land you in serious trouble, it could create problems if it is part of a pattern of behavior, he said.
Paid influencers...
On April 19, 2017, the FTC revealed that it had sent 90+ letters to athletes, celebrities, and other 'influencers,' reminding them of duties to disclose material connections to brands they are promoting on instagram and other social media platforms.
The agency noted that: "If there is a material connection between an endorser and an advertiser, that connection should be clearly and conspicuously disclosed unless it’s already clear from the context of the communication."
'You can’t use other people to say something that you are not allowed to say directly as a company'
As for glowing testimonials and reviews, he said, just because someone else said ‘This product cured my cancer/diabetes/eczema…’ doesn’t mean you are off the hook legally if you choose to like, share, retweet, or actively use that quote in your marketing materials.
“You can’t say, well that’s just their opinion. Basically, you can’t use other people to say something that you are not allowed to say directly as a company.”
As for direct partners such as distributors or affiliate marketers, “they are an extension of you,” he said, and you should set clear parameters as to what they can and cannot say about your product, which can be particularly challenging in the multi-level marketing industry, where hundreds if not thousands of people are marketing your product and potentially saying things you cannot substantiate.
What is the endgame for plaintiff's attorneys?
“Most of these class action lawsuits are not brought with a plaintiff’s lawyer really believing that the end result is they are going to win in court against a judge and get a settlement.
“They are brought to put companies in the position of deciding, ‘Are we going to fight this for two to three years and spend $200,000+ with a 50:50, maybe a little bit better, chance of winning, or are we going to settle out with a plaintiff lawyer for 30, 40, 50, 60 thousand bucks and move on?
“Some of these plaintiff’s lawyers are going into Ralph’s, into Whole Foods on a Friday, they buy 40 products, they take them back to their conference room, look through the labels, and decide the next 20 letters they are going to send out on Monday.
“If they get just 10 of those people to settle out for $40,000, that’s about $400,000 for about 10 hours of work, and unfortunately this is the day and age we live in.”
Justin Prochnow, Greenberg Traurig
All-natural
As for more general claims on food and beverage labels, it is always better to be as specific as possible, from a legal perspective, he said, with ‘contains no artificial flavors, sweeteners or preservatives’ a better choice than a blanket term such as ‘all-natural’ for example: “Talk about what your product doesn’t have.”
And if you are intent on getting ‘natural’ onto your label, he said, something like ‘made with naturally-sourced ingredients’ is less problematic than ‘all natural ingredients’ as plaintiff’s attorneys frequently argue that while a product might come from a natural source (corn, stevia plant etc), the way it has been extracted or processed may destroy its ‘natural’ credentials in the eyes of a reasonable consumer.
Fairy dust…
He also advised food and beverage companies to avoid using “fairy dust amounts” of on-trend health ingredients purely in order to reference them on product labels, when the clinical studies on the ingredients in question typically involved significantly higher doses, as this might imply a health benefit that you cannot support with your formulation.
“Don’t put them in there just because you can mention them on the label," said Prochnow. "If all the studies show that the benefits are for 200mg and you’ve only got 10mg in there [and you’re making marketing capital out of the ingredient], so you know that there’s no way that anyone is going to get the benefits, it’s exactly what they [the FDA and the FTC] don’t want to see. It’s misleading.”
Turmeric will do X, Y, Z….
It is also unnecessary and risky to go to town on claims about the health benefits of on-trend ingredients in your products (ginger, turmeric, ashwagandha) even if you are using meaningful amounts, given that consumers can easily look these ingredients up online, he observed.
“There’s this great thing called the internet our there and people can look these things up themselves. You don’t have to be the person that tells them that turmeric is an anti-inflammatory.”
Made in the USA
Another claim some plaintiff’s attorneys have focused on lately is ‘Made in the USA’ he said. “They are arguing that [reasonable consumers will believe] that this means that not only was the product manufactured or assembled in the USA, but that all of the ingredients are also from the USA.
“I don’t think that a typical consumer is buying a beverage and seeing the claim ‘Made in the USA,’ and thinking ‘Oh good, the citric acid in this comes from the USA,’ but that is the argument of the plaintiff’s lawyers. So to avoid that, if you don’t know for sure if all your ingredients are from the USA, you could say something like ‘Made in the USA with awesome ingredients from around the world,’ or something more specific such as ‘Bottled in the USA or ‘Canned in the USA.’”
No added sugar
He also warned that if you make a ‘No added sugar’ claim* on a product that is not low calorie, you should include a disclaimer that says ‘not a low-calorie food’ and then direct shoppers to the nutrition information for sugar and calorie content.
“Just missing that simple disclaimer could cost you tens of thousands of dollars.”
*Firms should also avoid ‘no added sugar’ claims on products if the foods or beverages they resemble and for which they substitute wouldn’t normally contain added sugar, an issue that has landed some brands in legal hot water in the 100% juice category in recent years.
Read more about KombuchaKon HERE...
Are you at risk of being sued?
To learn more about how to avoid becoming the target of a class action lawsuit – or an FDA warning letter – sign up for our FREE online beverage innovation event on February 21, where you can quiz Ryan Kaiser, partner at law firm Amin Talati Upadhye LLP, during our opening trend-watching panel at 8.30am PT.
For full details, and to register, click HERE.