Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Commissioner Ohlhausen calls for narrower interpretation of “substantiation” for certain advertising claims, (Feb 24, 2015)

By Linda O’Brien, J.D., LL.M.

On February 23, the FTC announced that, in two actions, it was challenging the marketers of certain mobile applications for making scientifically unsubstantiated claims that those mobile apps could effectively detect symptoms of melanoma. In separate cases, the marketers of MelApp and Mole Detective have agreed to settlements that bar them from continuing to make such unsupported claims.

The Commission vote to issue the administrative complaint and file the district court complaint against the MelApp and Mole Detective marketers, respectively, was 4-1, with Commissioner Maureen Ohlhausen voting no.

In a separate dissenting statement, Ohlhausen observed that the actions were an example of the FTC using an unduly expansive interpretation of advertising claims to justify imposing an inappropriately high substantiation requirement on a relatively safe product. She did not dispute that companies must have adequate substantiation to support claims they make and supports substantiation requirements based on app developer claims that their apps automatically assess cancer risk more accurately than a consumer’s unaided self-assessment.

However, the FTC actions go further and demand a high level of substantiation for a wide range of potential advertising claims, in Ohlhausen’s view. Specifically, the settlement orders require rigorous, blinded, human clinical tests to substantiate any claim that the app increases consumers’ chances of detecting skin cancer in the early stages. The orders also impose the same high substantiation standard on any claim that the app detects or diagnoses melanoma or risk factors of melanoma. Thus, the orders could be read to require the app developers that their apps assess cancer risk as well as dermatologists, even if the ads make much more limited claims.

Ohlhausen noted the substantiation requirements must flow from the claims by the advertiser, Under In re Pfizer, Inc., 81 FTC 23 (1972), the Commission should require a high level of substantiation if the advertiser expressly claimed that the apps provide dermatologist-level accuracy and efficacy, and a lower level of substantiation if the advertiser claims a lower level of capability. These ads never claimed that the apps substituted for a dermatologist exam.

Health-related apps have enormous potential to improve access to health information for underserved populations and enable individuals to monitor their own well-being more effectively. The Commission should not subject such apps to overly stringent substantiation requirements so long as the developers adequately convey the limitations of their products, according to the Commissioner. In particular, the FTC should be wary of finding that consumers interpret marketing for health-related apps as claims that those apps substitute for professional medical care, unless there are express claims, clearly implied claims, or extrinsic evidence, Ohlhausen concluded.

Chairwoman Edith Ramirez and Commissioners Julie Brill and Terrell McSweeny issued a separate statement in support of the FTC actions. In their view, the claims that the two apps, Mel App and Mole Detective, would provide an accurate, automated analysis of skin lesions were central selling points and needed to be substantiated.

The majority noted that the powerful language of the advertising was clear on its face and no extrinsic evidence of consumer interpretation was needed to support the challenged representations that the apps accurately analyze moles for symptoms of melanoma and increase the chance of early detection of skin cancer. Because the marketers lacked substantiation for those claims, it was a violation of Section 5 of the FTC Act.

Technologies, such as health-related apps, have the potential to provide tremendous conveniences and benefits to consumers. However, the FTC will continue to hold advertisers accountable for promises they make consumers, especially when they pertain to diseases and other serious health conditions. Therefore, the complaints and proposed relief reached by consent of the settling parties was appropriate, the majority concluded.

News: Advertising ConsumerProtection FederalTradeCommissionNews