This past week, several consumer, self-regulatory and regulatory actions made headlines:
Full Throttle: Ninth Circuit Dismisses FTC Data Suit Against AT&T
On August 29, 2016, the Ninth Circuit dismissed a suit brought by the FTC against AT&T Mobility LLC, ruling that the telecommunications company is exempt as a “common carrier” from enforcement under the FTC Act. The FTC claimed that AT&T had not properly informed customers with grandfathered unlimited data plans that their internet speed would be reduced after using a certain amount of data in a billing cycle. While the district court denied AT&T’s motion to dismiss, the Ninth Circuit reversed that ruling, finding that, based on the language and structure of the FTC Act, the common carrier exception was a status-based, not activity-based, exemption and that AT&T, as a common carrier, was not covered by Section 5.
Peer Pressure: FTC Charges Academic Journal Publisher with Faking Credentials
On August 26, 2016, the FTC charged OMICS Group, Inc., and its president/director, Srinubabu Gedela, with making deceptive statements about the academic journals it publishes. The FTC alleges that the company falsely claimed that its journals have editorial boards made up of prominent academics, and that the articles are peer-reviewed. In addition, the company is alleged to have failed to communicate to researchers that they had to pay high publishing fees until after the article was accepted for publication, and would not release articles back to researchers until the fee was paid. The complaint was filed in the U.S. District Court for the District of Nevada.
Off-Label: Grocery Association Agrees to Drop GMO Lawsuit Against Vermont
On September 1, 2016, the Grocery Manufacturers Association and the state of Vermont agreed to end a two-year litigation battle over the labeling of genetically modified foods after the controversial state law requiring labeling was preempted by federal law. Vermont became the first state to pass a GMO labeling law in 2014, and successfully defended the law in Vermont federal court. The case was appealed to the Second Circuit, but Congress passed a bipartisan bill in July 2016 requiring food companies to show that their products include GMOs, and contains a preemption provision prohibiting states from enacting their own GMO laws. Both sides agreed to drop the case without prejudice.
French’s Ads are Toast: NAD Recommends Ketchup Company Discontinue Claims
On August 29, 2016, the National Advertising Division recommended that French’s Food Company, maker of French’s Ketchup, discontinue certain comparative claims about its ketchup after a challenge by Heinz. According to the NAD, the French’s television commercial conveyed an unsupported and falsely disparaging message that Heinz’s original ketchup, which contains high fructose corn syrup, is less healthy than French’s ketchup, which does not contain high fructose corn syrup. French’s said that it would follow the NAD’s recommendations to discontinue the use of the slogans “We promise real ingredients” and “French’s: only real ingredients,” as well as “Taste the Difference!”