Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC Consent Decree with Marketers of Acai Berry Products Approved, Despite No Admission of Liability, (Oct 22, 2012)

By Jeffrey May, J.D.

The federal district court in Camden, New Jersey, has approved a consent decree resolving an FTC complaint against marketers that allegedly used fake news websites to deceptively market acai berry weight-loss products. The FTC announced on October 19, 2012, that the marketers have agreed to pay more than $2 million and make certain disclosures in future marketing to settle the suit (FTC v. Circa Direct, LLC, October 17, 2012, Bumb, R.).

In April 2011, the FTC filed an action against Circa Direct LLC and its owner/chief executive officer. The agency alleged that the defendants violated the FTC Act while marketing various products, programs, and services to consumers throughout the United States, including acai berry-based weight-loss products, work-at-home programs, and surplus auction services. According to the agency, the defendants promoted the products, programs, and services through websites designed to look like objective news reports but were fake. The FTC also alleged that in promoting acai berry-based weight-loss products, the defendants made deceptive claims about the products.

The federal district court had initially hesitated to sign off on the settlement. There was concern given the lack of an admission of liability by the defendants.

On September 11, 2012, the court conditionally approved the consent decree. Although the court could consider the settlement's failure to include an admission of liability, the lack of an admission of liability was not fatal. The court also decided that it was not bound by the requirements of Sec. 13(b) of the FTC Act. It could rely on the parties’ consent to award relief.

To obtain court approval, the FTC was required to take certain steps to inform the public and allow the public to assess the FTC’s claims. In order put the FTC’s allegations before the public “for evaluation and discussion,” the court required the FTC to create and host a webpage discussing the settlement. The web page appears at: http://ftc.gov/os/caselist/1123059/notice.shtm.

The case is Civil No. 1:11-cv-02172-RMB-AMD, FTC File No. 112 3059.

James A. Prunty, Laura M. Sullivan, and Elizabeth Olivia Tucci for FTC. Kristine Ann Sova (Venable LLP) for defendants.

News: ConsumerProtection FederalTradeCommissionNews