Financial Reform Bill Keeps FTC at Bay…For Now


Conferees in the U.S. Senate and House of Representatives agreed on final legislative language last week that does not include expansionary powers for the Federal Trade Commission (FTC). Many consumer goods companies, including natural products manufacturers and supplement makers, expressed concern over the FTC provision for its potential capacity to undercut the Dietary Supplement Health and Education Act (DSHEA) and impose stricter advertising requirements on industry.

The Natural Products Association (NPA) spearheaded a grassroots campaign to keep the FTC provision out of the final bill. In a statement, John Gay, NPA executive director and CEO, said: “This is a great victory, but the war isn’t over. Those forces on Capitol Hill that want to overregulate us are still out there, planning their next move. We need to remain vigilant.” NPA sent more than 28,000 messages to members of Congress over the past two months in an effort to prevent expansion of FTC powers.

NBJ Bottom Line 

According to Marc Ullman, a partner at Ullman, Shapiro & Ullman, the FTC provision could have had a chilling effect on the supplement industry, imposing more draconian substantiation requirements and giving FTC a wide-ranging free hand to assess liability claims on media. Ingredient-based substantiation is commonplace in supplement advertising, as are expert endorsements, and both faced imminent threat by an empowered FTC.

The clear takeaway here is that the supplement industry is developing a more unified and effective voice on Capitol Hill. Several recent legislative victories suggest that the industry is gaining traction as a lobbying force. That said, according to Ullman, legitimate concern remains that an effort to expand the commission’s power will reappear when the stand-alone FTC reauthorization legislation is considered. “Indications are that Senator Jay Rockefeller (D-WV) and chairman of the Senate Committee on Science, Commerce and Transportation will include language that would allow the FTC to simply be able to promulgate a regulation that requires any performance claim for any dietary supplement to be substantiated by two gold standard studies on that specific product,” Ullman told Nutrition Business Journal. If this language were to pass, “supplement companies would no longer be able to rely on ingredient-based substantiation,” Ullman added.

For more analysis of the regulatory climate facing supplement manufacturers, read our next issue, an annual overview of the nutrition industry, published in July. Subscribe now through our website.

Related NBJ links:

2009 Supplement Business Report

Will the FTC Gain Power over Supplements in New Financial Overhaul Legislation?

FTC Regulations Change the Marketing Landscape for Nutrition Direct Sellers

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.