Advertising Disputes Monthly Update, January 2015

Key decisions detailed in the January 2015 edition include:

• ADD-CARE, LLC, ADD-Care Dietary Supplements, Case #5785 (11/12/14)
• Fareportal Inc. (CheapOair.com and OneTravel.com), Case #5789 (12/08/14)
• Sumo Logic, Inc. (Cloud Log Management), Case #5788 (12/02/14)
• The MOM Brands Company (Malt-O-Meal Cereals), NAD Case No. 5782 (11/5/14) 

ADD-CARE, LLC, ADD-Care Dietary Supplements, Case #5785 (11/12/14)

In a challenge to a dietary supplement maker’s express and implied claims, NAD reminds advertisers that, as a general rule, they must support health-related claims with competent and reliable scientific evidence.

ADD-Care sells homeopathic dietary supplements purporting to alleviate the conditions of attention deficit disorder (ADD) and attention deficit hyperactivity disorder (ADHD), enhancing users’ clarity and focus and providing a natural alternative to prescription stimulants. In addition to making general claims that the supplements help with various symptoms of ADD/ADHD, such as impulsivity and concentration, ADD-Care advertised that brain imaging tests demonstrated the supplements’ efficacy. The ads included scientific-sounding statements such as: “[T]he ADD-Care® supplement overall performed 25% as well as the stimulant with the cerebellum, and was 100% better with the cingulate system, 90% better with the basal ganglia, and 75% better with the limbic system”; and “During each scan the Connors ADD test was administered ... [and] ADD-Care® matched the popular stimulant on performance.” The company also ran YouTube video testimonials featuring individuals who claimed to have successfully treated ADD symptoms with the supplements.

The Council on Responsible Nutrition (CRN) challenged the advertiser’s express and implied claims that the supplements treat symptoms of ADD/ADHD. The CRN expressed concerns that the ads could cause consumers to forgo conventional treatment (prescription stimulants), and criticized the medical claims as misleading and lacking scientific support. The ads pointed to case studies using the Connors ADD test, but the sample consisted of only four subjects.

The NAD agreed with the CRN that the individual case studies lacked validity and reliability: “Here, the observational study of four subjects after a dose of ADD-Care is not sufficiently reliable to support the claims made here.” The NAD reaffirmed that well-controlled clinical studies are the most reliable form of evidence; it further noted that softening a health claim by adding words such as “helps to” or “may help” (to deliver certain health benefits) does not remove the need for competent scientific evidence.

The NAD recommended that the advertiser discontinue its claims that ADD-Care improves focus, clarity, and alertness; relieves symptoms of hyperactivity, impulsiveness, inattention, forgetfulness, and anxiety; as well as claims that it relieves “symptoms consistent with ADD and ADHD.” The NAD also recommended that the advertiser take down its links to the YouTube testimonials, noting the FTC’s warning that advertisers not use consumer testimonials to make claims it could not make directly due to a lack of reliable scientific evidence.

Fareportal Inc. (CheapOair.com and OneTravel.com), Case #5789 (12/08/14) 

NAD finds that online travel agency’s Google ads were misleading and recommended their discontinuation. Some of the contested ads referred to low-price airfares to the destination referenced in a user’s search (e.g., “Houston $149 airfares”) even though the listed airfares did not correspond to available fares between the cities included in the user’s Google query (e.g., “flights from Miami to Houston”), while others advertised discounted fees, without disclosing that the discounts only applied to the travel agency’s own, fairly steep, fees.

The online travel agency Expedia challenged a number of Google (and other search engine) advertisements run by the competing travel agency, Fareportal Inc. The decision addressed several different ads, each of which the NAD found to be misleading.

First, Fareportal pays for certain Google ads that include fares for flights to destination locations, such as “Houston $149 Airfares – CheapOair.com,” and that appear when a user searches for fares between specific destinations on Google. Clicking on the ad directs the user to the CheapOair.com home page, where a user may then search fares and discover that the advertised fare is not available for those cities. Expedia argued that the ads are misleading as they suggest that the listed fare (e.g., $149) applies to the searched flight segment. The NAD agreed that the ads were misleading because a consumer might reasonably assume that the listed price refers to prices for flights between the origin and destination included in the search.

Second, Expedia challenged ads that announced: “Save up to $15 OFF fees. Book Now!” and “Best Price Guarantee … Find our lowest price to destinations worldwide, guaranteed.” The NAD agreed that the ads, although technically accurate, were misleading because they did not clarify that the fees were fees charged by the advertising travel agency, rather than airline fees. Again, although the express claims as to discounted fees were not false, they were misleading; a consumer might assume that the discounts applied to airline fees and believe that they would be receiving a discount over the lowest published fare, as opposed to discounted booking fees charged by the agency. (Many online travel agencies do not charge booking fees at all.) Consistent with an earlier decision by the NAD involving Fareportal, the NAD recommended that the ads be discontinued unless they clearly disclose that the discounts applied only to booking fees.

Finally, the NAD considered the terms of the advertiser’s “Best Price Guarantee.” The challenged guarantee gives Fareportal, rather than consumers, the option of refunding the price difference or refunding the entire ticket price if the consumer finds a lower fare within 24 hours of booking. The NAD found that this policy does not necessarily give the consumer the expected benefit—“the ability to purchase a lower priced ticket.” The NAD therefore recommended that the guarantee be discontinued or modified so that consumers can, at their own option, receive either a full refund or require a matching fare.

Sumo Logic, Inc. (Cloud Log Management), Case #5788 (12/02/14)

Although the advertiser, a manufacturer of software for computer log management and analytic systems, voluntarily discontinued its comparative claims prior to a full NAD examination, the NAD affirmed that comparative claims “must be narrowly drawn to avoid falsely disparaging a competitor’s product.”

This challenge was brought by Splunk, a “machine data” analytics company, against certain advertisements run by its competitor, Sumo Logic. Splunk contended that Sumo Logic’s advertisements falsely claimed that the Sumo Logic software product had a variety of capabilities beyond those offered by Splunk. Most particularly, the advertisements included comparison charts depicting various capabilities that the competing products had in common, as well as listing a number of extra functions performed by the Sumo Logic product. Among other things, Splunk contended that Sumo Logic misleadingly omitted from the chart capabilities offered by Splunk but not by Sumo Logic. The comparison charts, in essence, created the impression that the Sumo Logic product offered more functionality and therefore more value.

Because the advertiser, Sumo Logic, voluntarily modified its marketing campaign and discontinued the ads (even while maintaining their accuracy), the NAD did not analyze the substantive merits of the claim. However, the NAD reminded advertisers that they bear the responsibility of ensuring that comparative claims are accurate and not misleading. They must be “narrowly drawn to avoid falsely disparaging a competitor’s product.” This is especially true, the NAD warned, in an environment such as technology, where consumers have no means of independently verifying the accuracy of an advertiser’s claims.

The MOM Brands Company (Malt-O-Meal Cereals), NAD Case No. 5782 (11/5/14)

Cereal brands must support taste superiority and preference claims with taste tests that sample consumers who customarily use the products being compared and that comply with ASTM Guide’s recommendations concerning the geographical diversity for test sites.

This case resulted from a challenge by Post Food, LLC (Post) to taste-preference claims used by MOM Brands Company (MOM) for four of its Malt-O-Meal brand cereals, such as “MOM Oat Blenders with Honey & Almonds Preferred Over Post Honey Bunches of Oats with Almonds!” and “National Taste Test WINNER Fruity Dyno-Bites preferred over Post Fruity Pebbles.” Post asserted that the preference claims were not properly substantiated by taste tests that met NAD’s standards or guidelines set forth in ASTM’s Standard Guide for Sensory Claim Substantiation, E1958 (ASTM Guide). NAD agreed, finding two major flaws with the taste tests MOM commissioned: the constitution of the surveyed population and number of test centers within each geographic region.

The MOM’s taste tests involved the target market for purchasers of the products – men and women between 30 and 64 – rather than individuals who actually consumed the cereals, and therefore excluded a high percentage of actual consumers of the product. NAD found that the MOM’s “National Taste Test Winner” claims conveyed the message that a representative sample of sweetened breakfast cereal users preferred its products over Post’s but, by limiting the taste test to breakfast cereal purchasers, the advertiser excluded more than half of the actual product users in the product category, including consumers younger than 30 and older than 64. As a result, NAD determined that the taste tests were insufficiently reliable to serve as a reasonable basis for MOM’s taste-preference claims and recommended that the advertiser discontinue the claims.

Post also argued that the test violated the ASTM Guide’s recommendation concerning the geographical diversity for test sites since the test only included one test market in the Northeast region. The ASTM Guide recommends a minimum of two markets in each of four major census regions. While the advertiser countered that it conducted testing in 10 distinct geographic locations, and that its use of only one testing center in the Northeast was reasonable due to its lower market share in that area, NAD found the use of only one Northeast testing center was “a significant deviation from the industry standard.” In addition, while MOM may have less market penetration in the Northeast, its advertising claimed that its products won a “National Taste Test,” sending “a broad, strong message regarding the taste preferences of the overall population of sweetened breakfast cereal consumers.” NAD also noted that, although MOM’s products may have less of a presence in the Northeast, this may not necessarily be true for Post’s products. Nor does it mean that the region does not have a significant population of consumers of sweetened breakfast cereal.
NAD disagreed with Post’s contention that MOM’s commercial for Fruity and Cocoa Dyno-Bites, which included the statement “[i]n a national taste test, Malt-O-Meal Dyno-Bites are preferred over Post Pebbles Cereal” conveyed an unsupported taste- preference claim for the entire product line. NAD determined that the images accompanying the claim – two of the MOM cereals (Fruity and Cocoa Dyno-Bites) and two of Post’s cereals (Fruity and Cocoa Pebbles), adequately limited the advertising message to those cereals pictured and, in that context, conveyed no line claim.

Finally, NAD concluded that MOM provided a reasonable basis for its product volume comparison claims, which included claims that MOM’s Cocoa and Fruity Dyno-Bites packages contained “50% More – Compared to Fruity [or Cocoa] Pebbles cereal 15 oz. box.” The advertiser’s 22.5 oz. cereal bags, which are 50 percent larger than Post’s 15 oz. cereal boxes, are the most relevant package sizes for comparison purposes. NAD rejected Post’s argument that its 40 oz. bags compete with the MOM 22.5 oz. cereal bag as unsupported by the record.

While it agreed with parts of NAD’s decision, MOM Brands plans to appeal to the NARB on the issue regarding the age groups sampled as well as the required number of taste test locations.

This report is a publication of Loeb & Loeb LLP and is intended to provide information on recent legal developments. This report does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.