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Internet Promotion of Dietary Supplements: FTC Compliance and Emerging Issues

By James N. Czaban, Esq.

This article originally appeared in HSR’s Supplement Industry Insider, vol. 1, no. 7 (May 31, 1996), and is reproduced here by permission of the publisher.

With the burgeoning accessibility and use of the Internet and the World Wide Web, many supplement firms, as well as independent retailers, are utilizing flashy “Web sites” to promote and sell their products. Use of the Internet however, raises many interesting, and as yet unanswered questions, from the threshold question of which federal agency -- the Food and Drug Administration (“FDA”) or the Federal Trade Commission (“FTC”) -- will assert regulatory jurisdiction over Internet promotion of dietary supplements, to how supplement marketers and retailers can protect themselves from regulatory and tort liability for their Internet activities.

The Dual Regulation of Dietary Supplement Promotion

Contrary to public perception, FDA is not the only government agency which regulates the dietary supplement industry. Simply stated, FDA regulates product labels and “labeling,” and FTC regulates advertising. The primary fact which determines whether particular promotional statements constitute “labeling” -- and thus come under FDA jurisdiction -- is whether the statements “accompany” the product in commerce. Thus, in addition to the label attached to the product box or bottle, any package inserts, and any other written matter sent with the product, or even sent under separate cover, constitute labeling. Other promotional statements about a product which are made in television, radio, or print ads, however, are not considered “labeling,” and as such come under the jurisdiction of the FTC.

Is Internet Promotional Activity Advertising or Labeling?

At first glance, the above question may seem rather simple because Internet promotions provide information on-screen, and thus closely resemble more traditional advertising. However, many Web sites allow on-screen product ordering along with often extensive product information. Recall that where printed matter is sent to the consumer in conjunction with a product, even if in separate mailings, the printed matter can be considered labeling. Using the Internet, however, a consumer could order a product and simultaneously download or print extensive written information, including any number of claims about the product. Does such on-line delivery of written matter fit the definition of labeling which “accompanies” the product?

Although both FDA and FTC are known to be studying this and other Internet-related issues concerning dietary supplements and OTC drugs, neither agency has yet taken an official position on the question. However, a logical and workable answer would be that statements or claims about products on the Internet should presumptively be considered advertising, unless access to the materials at issue is only made available to those who order the product. In such a case, the information could reasonably be said to “accompany” the product and therefore qualify as FDA-regulated “labeling.”

FTC Compliance Issues

Regardless of FDA’s ultimate policies in response to the Dietary Supplement Health and Education Act (“DSHEA”) with respect to claims in supplement labels and labeling, the FTC enforces its statutory false advertising provisions using a two-pronged approach. First, the advertising claim must be truthful and not misleading in any material respect. Importantly, a claim may be deemed misleading not only by what it states, but also if it omits any material information. Second, any objective claims about the product must be supported, or “substantiated,” by competent relevant evidence. The advertiser (i.e., the seller of the product) must possess the substantiation for the claim before the advertising is disseminated.

Compliance with FTC policy is often difficult to assure in advance, because the term “misleading,” as contained in the statutory definition of “false advertisement,” is broad and amorphous, and FTC enforces it on a case-by-case basis. Thus, Commission decisions concerning one ad may be given little weight with respect to seemingly similar ads for other products. Moreover, the issue of whether an advertiser’s “substantiation” for its claims was sufficient is often disputed, seemingly no matter how much supporting evidence is provided for a particular product’s advertisement. Finally, in the area of dietary supplements, where FTC and FDA wield simultaneous jurisdiction, FTC may not defer to an FDA determination that a particular claim is scientifically valid.

A recent FTC adjudicatory proceeding illustrates all three of these points. The Commission challenged a dietary supplement marketer’s advertising of a calcium supplement, based in part on the allegation that the (widely accepted) statement that “adequate calcium intake is linked to reduced osteoporosis by slowing bone loss” was materially misleading and that the company allegedly did not have prior substantiation. The FTC pursued its case even in the face of over 200 scientific articles (most peer-reviewed) offered as substantiation for the challenged claims. The Commission even offered an expert witness who testified that the FDA’s approved health claim that calcium reduces the risk of osteoporosis, as published in the Federal Register, was misleading.

The point is not to suggest that well supported claims cannot or should not be made for dietary supplements, but merely to highlight the fact that FDA is not the only agency monitoring what is said about dietary supplements. Thus, supplement industry members, and especially those venturing into Internet marketing, should be aware of the general requirements and potential pitfalls that exist with respect to the Federal Trade Commission.

Emerging Issues For Internet Marketer

In addition to general advertising compliance issues, Internet marketers should be aware of other emerging issues that may gain prominence as the law of the Internet develops. One such issue involves a common feature of many Web sites -- the use of “links” which allow users to access other (independent) Web sites, or live “chat rooms” by simply clicking on an icon or highlighted (hypertext) words. The use of such links on Web sites maintained by supplement sponsors raises several important but as yet unanswered questions, including: who is responsible for the information disseminated in linked Web sites, and what legal issues may be implicated?

For example, suppose a hypothetical neighborhood health food store maintains a Web site on which it promotes its supplement products, using only clearly acceptable claims which neither FDA nor FTC would ever challenge. However, suppose that the Web site also includes links to third party Web sites or chat rooms in which outrageously false claims, and instructions for treating or curing terminal diseases like cancer and AIDS, are made for the same products sold on the retailer’s Web site. Can the third-party statements be imputed to the retailer in an FDA action alleging sale of unapproved drugs? Are the linked Web sites protected as third-party literature under DSHEA? Will FTC impute the linked site’s information as further advertising by the supplement marketer in an action alleging false advertising?

The issue of information in linked sites may also implicate product liability concerns. Using the same example as above, suppose a customer is injured after using a retailer’s product in a manner recommended in a third-party site linked to the retailer’s Web site. Can the retailer then be held liable for the injuries sustained by the customer, even though the retailer did not himself create or disseminate the information on the third-party site, but merely provided a convenient link? Creative plaintiffs’ lawyers may be willing to make the argument that they can.

Moreover, with respect to both regulatory and tort liability, questions have been raised as to what duty, if any, a Web sponsor may have to monitor the content of independent linked sites in order to avoid possible problems from agencies or injured consumers. A linked site may be innocuous when the link is first created, but the contents can change frequently, and new claims or statements may appear without the knowledge of a Web site sponsor who provided the linked access. And, there is obviously no way to control what individuals discuss in chat rooms, many of which are dedicated to discussion of specific topics, including experimental treatments for serious or incurable diseases. Does this mean supplement marketer Web sites should not provide links? Probably not, but it will pay to be aware of the foregoing issues and to exercise reasonable prudence as to the choice of links provided on a Web site.

Some international issues may also emerge. For example, FDA may be able to issue an import alert to stop the entry of supplements from overseas distributors where the agency believes the Internet marketing violates the statutory new drug provisions by offering supplements for unapproved disease uses. However, that possibility may be questionable if the “labeling” itself is not violative. There are clearly numerous logistical permutations of international Internet marketing and distribution of dietary supplements (e.g.: overseas Web site with domestic product; domestic Web site with imported product; imported product and overseas Web site). In general, if the Web site sponsor, wherever located, is somehow affiliated with the ultimate supplier of the product, and the product is located here, FDA and/or FTC would probably be able to regulate its activities via action against the affiliated product or seller.

These and other questions may soon be at the forefront of dietary supplement Internet marketing, and although counsel can provide guidance when questions or concerns arise in specific situations, there are as yet no clear-cut answers.