Ivan Wasserman
Ivan Wasserman of Manatt, Phelps and Phillips LLP

FTC gets into the 'natural' gamebut does it advance the ball?

The FTC takes action against five personal care companies using "all natural" claims but doesn't tackle the difficult issues that companies (and courts) struggle with when deciding what is "natural."

In what I believe is the first of its kind (at least in recent memory), the Federal Trade Commission has taken enforcement actions against companies for claiming that their products are "all natural"€ or "100 percent natural." The products are not foods or dietary supplements, which are currently the focus of the FDA's request for information on whether or how it should define the term "œnatural," but rather they are topical skin care products, sunscreens and shampoos.

The FDA and FTC both regulate claims made for foods, dietary supplements and cosmetics. FDA has primary jurisdiction over claims on product labels and in labeling, and the FTC has primary jurisdiction over claims made in advertising. Both agencies prohibit false or misleading claims, and neither currently has a formal definition of the term "natural."

The FTC charged five companies with misleading consumers by claiming the products are "all natural"€ or "œ100 percent natural," because the products contain "€œsynthetic"€ ingredients including dimethicone, ethyhexylglycerin, phenoxyethanol, polyethylene, Polyquaternium-37, caprylyl glycol, Polyquaternium-7 and other synthetic ingredients.

Four of the companies agreed to settle with the FTC by signing consent orders, and the FTC issued a complaint against the fifth company. The consent orders with the four companies cover "€œ100 percent natural" and "œall natural"€ claims, however the orders do not define what natural means. Instead, the orders prohibit the companies from claiming that a product is "all natural" or "100 percent natural" in the future unless such claim is "is non-misleading, including that, at the time such representation is made, the [company] possesses and relies upon competent and reliable evidence—that is sufficient in quality and quantity based on standards generally accepted in the relevant fields when considered in light of the entire body of relevant and reliable evidence, to substantiate that the representation is true."€

By not providing a definition of the term "natural"€ in these orders, the FTC did not tackle the difficult issues that companies (and courts) struggle with when deciding whether an ingredient is "natural." The ingredients that got these companies into trouble with the FTC seem to be clearly not "natural" (synthetic chemicals). Can these companies claim a product is 100 percent natural if has a very processed botanical ingredient? A GMO ingredient? The orders do not provide clear guidance with respect to any particular ingredient, and it seems whether an ingredient is "natural" under the order will depend on expert opinion, which can certainly vary and can change over time.

In the FTC’s press release, Jessica Rich, director of the FTC’s Bureau of Consumer Protection, warned that, "'all natural' or '100 percent natural' means just that—€”no artificial ingredients or chemicals. Companies should take a lesson from these cases." The FDA has previously issued warning letters to food companies for claiming their products are €œ"all natural" in similar "œeasy" cases, such as when the product contain synthetic preservatives.

So if you want to play the "€œnatural"€ game, you can add the FTC to the list of referees trying to ensure fair play. However, it is still a very tough game to play without clear rules.

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