Companies Targeted By FTC Using Penalty Offense Authority Have Strong Defense, Attorney Says
John Villafranco, partner at Kelly Drye & Warren LLP, says the US FTC’s ability to obtain monetary relief using the penalty offense mechanism is questionable both on statutory and Constitutional grounds. Marketers faced with civil penalties – for example, for alleged inadequately substantiated health claims – should stand their ground, he suggests in a recent interview.
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Attorneys are closely watching how the US Federal Trade Commission’s latest wave of penalty offense notices to almost 700 companies plays out, noting – as did recently departed commissioner Christine Wilson – that seeking civil penalties in court under this “long dormant” authority could be challenging.
Agency sends flares across wide field of advertisers illuminating the need for marketers to substantiate health claims. Reminder made brighter noting penalties of up to $50,120 per violation.
The FTC has updated its guidance on health products advertising for the first time in 25 years with an expanded version that includes devices.