FTC to gain extra powers?

By Shane Starling

- Last updated on GMT

Industry is becoming very concerned about a section of the Wall Street Reform and Consumer Protection Act of 2009 that hands the Federal Trade Commission (FTC) powers to condemn healthy food and supplement messaging that is not backed by product-specific substantiation.

The section of the H.R. 4173 Bill, that has already passed the House of Representatives, and is due to go before the Senate, could mean that marketing statements on dietary supplements may require two ‘gold standard’ clinical trials to back them, said food attorney Marc Ullman on an industry blog.

Ingredient-based substantiation, where the claim relates to the active ingredient rather than the specific product, could lose its weighting, amid the desire of the Bill’s authors to crack down on flagrant internet and other forms of fraud.

FTC Chairman Jon Leibowitz emphasized that fraud, not marketing, was the Bill’s target.

But that hasn’t stopped trade groups such as the Natural Products Association, the American Herbal Products Association and the Council for Responsible Nutrition are campaigning with the backing of pro-supplement Senators Tom Harkin such as Orin Hatch against the Bill.

The groups are concerned the Bill will give the FTC the power to act as “judge, jury and executioner”​ and they have been joined in their concerns by the likes of the Direct Marketing Association (DMA) and the Interactive Advertising Bureau.

They have written a letter to the Senate in which they express their opinion that the FTC revisions have no place in a Bill ostensibly about financial market reform.

“We want financial protection and the expansion of FTC powers to be two separate issues with separate debates,”​ NPA VP of scientific and regulatory affairs, Dan Fabricant, PhD told NutraIngredients-USA.com.

More discretionary power than it needs?

The letter​ on the DMA website states:

“The FTC could use expanded rulemaking authority to regulate areas where its involvement would hinder new and emerging business practices, such as Internet marketing.”

The threat of FTC rulemaking would lead to innovation reticence in the marketplace, stifling growth that would otherwise create a projected 2.6 million new jobs in the Internet marketing workforce over the next five years.”

Food attorney, Jonathan W Emord, called the proposal irresponsible.

“The provision removing the ban on FTC rule making without Congressional pre-approval contained in H.R. 4173 invites the very same irresponsible over-regulation of the commercial marketplace that led Congress to enact the ban in the 1980s,”​ he said.

“FTC has no shortage of power to regulate deceptive advertising; this bill gives it far more discretionary power than it needs, inviting greater abuse and mischief from an agency that suffers virtually no check on its discretion.”

Related topics: Regulation, Product claims

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