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From Antitrust Law Daily, December 12, 2016

Commission finds ‘all natural’ claims for sunscreen violated FTC Act

By Jeffrey May, J.D.

California Naturel, Inc.’s "all natural" claims for its Sunscreen SPF 30 product violated the FTC Act, the Commission has decided. The Commission granted summary decision against the company. In an opinion, written by Chairwoman Edith Ramirez and released today, the Commission stated that the company promoted its "all natural" sunscreen on its website as containing "only the purest, most luxurious and effective ingredients found in nature." However, California Naturel admitted that eight percent of its sunscreen formula was in fact dimethicone, a synthetic ingredient (In the Matter of California Naturel, Inc., December 5, 2016, Ramirez, E.).

The Commission issued its complaint in April. In September, complaint counsel moved for summary decision, contending that there were no material issues of fact to resolve at trial and that the requested relief was appropriate. Last month, the Commission extended the time period for issuing a ruling on complaint counsel’s motion until December 5.

California Naturel did not dispute that it had consistently advertised its sunscreen as an "all natural" product. Instead, it opposed summary decision based on a disclaimer it added to the bottom of the sunscreen webpage in "early 2016" after the FTC began its investigation.

Thus, the Commission concluded that there was no question that prior to early 2016, California Naturel expressly marketed its sunscreen as an "all natural" product and that it did not include any disclaimer. The added disclaimer did not excuse deception that had already occurred. The Commission also concluded that a list of ingredients on the company's Sunscreen SPF 30 webpage did nothing to dispel the net impression that the sunscreen was "all natural."

Further, California Naturel admitted that its "all natural" claim was not true. Because California Naturel admitted that its sunscreen formula consisted of eight percent dimethicone and that dimethicone was a synthetic material, complaint counsel established that California Naturel’s "all natural" claims are false or misleading.

California Naturel’s false and misleading "all natural" representation for Sunscreen SPF 30 was express. Thus, it was presumptively material and deemed likely to affect a consumer’s purchasing decision in violation of Sections 5 and 12 of the FTC Act.

Dissent. Commissioner Maureen K. Ohlhausen did not agree with the Commission’s grant of summary decision regarding the effect of California Naturel’s later-added disclaimer and new product stickers. In a separate statement, dissenting in part, she contended that the later-added disclosure and new product stickers adequately qualified that the "all natural" claim was a genuinely disputed material fact and thus not appropriate for summary decision.

Remedy. Having found liability, the Commission entered a final order prohibiting California Naturel from misrepresenting the ingredients or composition of its products; whether a product is "all natural" or "100% natural"; the extent to which a product contains any natural or synthetic ingredient or component; or the environmental or health benefits of such a product. It also requires the company to have competent and reliable evidence to support any of the four foregoing claims it makes about any of its products. The final order will terminate in 20 years.

The matter is FTC Dkt. 9370.

Companies: California Naturel, Inc.

MainStory: TopStory Advertising ConsumerProtection FederalTradeCommissionNews

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