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advertising law

  December 1996 Advertising Law News...

advertising law  From: Advertising Compliance Service.
advertising law

advertising lawNOTE: The following news brief appeared in an issue of the Reference Service, Advertising Compliance Service and examined an advertising law-related action during the month of December 1996.


Many Internet advertisers probably don't realize that their ads on the Net face civil penalties of $11,000 per violation for false claims. One webvertiser recently learned that lesson: It entered a consent agreement with the Federal Trade Commission (FTC) that contains the standard FTC "warning" about what could occur in the future:

"NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000."

[For a look at some of FTC's past penalties, click here.]

Ads for the "Koolatron" appeared on the Internet's World Wide Web. Ads for the product were also disseminated by direct mail and through print ads in newspapers and magazines. These ads contained the following allegedly false and unsubstantiated claims: "Imagine the versatility and convenience of a cooler that worked like a refrigerator. You could have ice-cold drinks at softball games, enjoy a picnic without soggy or spoiled food, even store insulin or other medicine that needs to be refrigerated. Now, imagine that this cooler that worked like a refrigerator could also heat food. In fact, according to the complaint, the Koolatron's cold storage temperature is highly dependent on outside air or room temperatures, and in many circumstances it will not maintain cold storage temperatures comparable to a home refrigerator. Further, the Koolatron is primarily designed to maintain the cool or warm temperatures of items that were already cool or warm before being placed in the device, and its ability to cool down warm food or heat up cold food is limited. It may take up to twelve hours or more for the Koolatron to cool down a warm item or heat up a cold item. Just plug it in. Koolatron plugs directly into your vehicle's cigarette lighter and uses less power than a taillight. If you leave it plugged in while the vehicle is off, it will consume only three amps of power. Unplugged, Koolatron will hold its cooling capacity for up to 24 hours."

But FTC's complaint charged that, in most instances, once unplugged from a power source, the Koolatron won't hold its cooling capacity for 24 hours, and operating the Koolatron off a car battery when the car is not running may drain the car battery of all power in as little as three hours. FTC's complaint also charged that the advertiser deceptively failed to disclose that use of the Koolatron to cool or warm perishable food may, in certain circumstances, pose a risk of buildup of harmful or unsafe bacteria on the food, since in its cooling mode the device may not always hold food at proper refrigeration temperatures, and in its warming mode the device does not reach a high enough holding temperature to kill or prevent the growth of bacteria on food.

The proposed settlement would bar the advertiser from misrepresenting "the comparative or absolute ability of such product to refrigerate or cool food items or medicines or to maintain proper cold storage temperatures; the comparative or absolute ability of such product to heat or warm food items; the comparative or absolute ability of such product to hold its cooling capacity after being unplugged from a power source; or the effect of operating such product off a car battery when the car is not running."

The advertiser would also be barred from making claims "about safety or efficacy, unless, at the time the claim is made, it has competent and reliable evidence that substantiates the claim." Also, the advertiser would be barred from making "any claim about the effectiveness or usefulness of Koolatron or any substantially similar product for use in cooling or warming food unless it also discloses the potential food safety risks associated with use of the product."

[The next issue of Advertising Compliance Service also contains an extended examination of a similar FTC case, which also involved TV and direct mail ads.]

(Comtrad, FTC File No. 952-3047, December 9, 1996; materials relating to this FTC matter are available on the Internet at FTC's World Wide Web site at: http://www.ftc.gov.)

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