This past week, several consumer actions made headlines that affect the retail industry.
Kraft Suit Stayed Pending Outcome of FDA Guidance
A federal judge in Puerto Rico granted Kraft Foods Group Inc.’s (“Kraft’s”) motion to stay pending the completion of the FDA’s inquiry into the use of the term “natural” on food labeling. The suit alleges that Kraft falsely labeled its shredded cheese as “natural” despite containing artificial food coloring. The case is stayed until the FDA provides guidance on the use of that term on food labels.
FTC and DirecTV Settle Claims on Eve of Trial
The FTC has reached a settlement in principle with DirecTV regarding its allegedly deceptive marketing practice. The FTC alleged in 2015 that DirecTV violated the FTC Act by advertising the price of the first year of a two-year contract but failing to disclose the cost of the second year, which is significantly more expensive. The settlement was reached on the eve of trial.
FTC and Block Division, Inc., Settle “Made in USA” Claims
The FTC and Block Division, Inc., a distributor of pulley block systems, have reached a settlement that Block Division will stop making unqualified claims that its products are made in the United States. The FTC alleged that Block Division deceived consumers by making false and misleading claims that its pulley blocks are made in the U.S., when in fact, the pulleys featured imported steel plates.
ERSP Zaps Certain Claims Related to ZAP! Restorer
The Electronic Retailing Self-Regulation Program (“ERSP”) has concluded that ZAP! Products, Inc., can support certain claims related to its ZAP! Restorer while recommending that ZAP! modify or discontinue other claims. ERSP found that testing submitted by ZAP! supported claims for the product’s general effectiveness. However, ERSP concluded that other claims, including that the product “[r]emoves virtually any stain” were unsupported. ZAP! has stated that it will take ERSP’s concerns into account for future advertising.
NAD Finds Insufficient Reliable Evidence to Support Claims for Hair La Vie Supplements
The NAD has recommended that Beauty Science Group, Inc., modify or discontinue certain claims related to its Hair La Vie dietary supplement. In response to the NAD’s inquiry, Beauty Science Group discontinued certain claims and modified others. The NAD reviewed the remaining claims and determined that there was not sufficiently reliable evidence to support them. The challenge was brought by Brock Beauty, Inc., which makes competing supplements.