Last week, the Federal Trade Commission (FTC) announced the annual changes to the notification thresholds for filings under the Hart-Scott-Rodino Antitrust Improvements Act (HSR), as well as certain other values under the HSR rules. As background, the HSR Act requires that acquisitions of voting securities or assets that exceed certain thresholds be disclosed to U.S. antitrust authorities for review before they can be completed. The “size-of-transaction threshold” requires that the transaction exceeds a certain value. Under certain circumstances, the parties involved also have to exceed “size-of-person thresholds.” This year’s values, which are adjusted annually based on changes in the GNP, take effect on Feb. 27, 2017. The FTC also adjusted the safe harbor thresholds that govern interlocking directorates in competing companies. Continue Reading
It’s that time of year again, when we reflect on what happened during the prior year and prepare for another one. Let’s take a moment to look at some trending antitrust topics from 2016, and take a stab at what we believe will be some of the hottest trending topics in antitrust law going forward.
Auto parts stalled?
While the gush of new cases has slowed to a trickle, it is remarkable to note that new cases are indeed still being filed – the most recent of which was filed in November 2016. Perhaps more remarkable than new cases however, is the glacial pace at which they appear to be moving. In fact, recent settlement filings indicate that the lead case – which is currently set for a class certification hearing in 2018, may settle completely, leaving the first class decision in those cases even farther out, despite the cases already passing their sixth birthday. Continue Reading
The National Advertising Division (NAD), a voluntary advertising self-regulatory body administered by the Better Business Bureau, just dealt a major blow to the Pavlok Aversion Therapy wristband by recommending that it discontinue numerous unsupported claims as a violation of false advertising laws. Pavlok has said it will accept the recommendations.
Pavlok, a product by the Behavioral Technology Group, first entered the public’s general consciousness after being featured on “Shark Tank” this past May. (It did not get a deal, and involved a rather testy exchange between show stalwarts Kevin O’Leary and Mark Cuban, and the contestant.) In essence, Pavlok is a wristband that, with the press of a button, delivers an electric shock to the wearer. The product is based on behavioral conditioning first demonstrated by Ivan Pavlov (hence the product’s name). The theory is that if the wearer voluntarily delivers an electric shock to himself whenever he engages in a habit he wants to break (consuming sugar, smoking, nail-biting, etc.), then eventually he will associate the habit with a shock and will subconsciously stop the habit. Continue Reading
Many health and fitness companies know that federal and state laws prohibit unfair or deceptive practices, including false advertising. But many still have the mistaken impression that they can freely post testimonials from their products’ users without running afoul of false advertising laws. After all, the thought goes, the company is merely relaying its customers’ opinions and experiences, not making general statements of a product’s effects.
Although facially plausible, this view is not consistent with false advertising law. By way of background, Section 12 of the Federal Trade Commission Act prohibits “false advertisement” for food, drugs, devices, services, or cosmetics. “False advertisement” is defined as an advertisement that is “misleading in a material respect.” 15 U.S.C. 55(a)(1). “Misleading” includes not only misrepresenting a product, but making claims about a product that are not supported by credible evidence. This is especially true of health claims, where federal law requires supporting “competent and reliable” scientific evidence.
These same standards apply to testimonials; an endorsement or testimonial cannot convey an express or implied representation that the advertiser itself could not make. 16 C.F.R. 255.1(a). More colloquially, an advertiser cannot make unsubstantiated claims by hiding behind testimonials making the same claims. If the advertiser has no competent and reliable scientific evidence that its product cures cancer, it cannot publish a testimonial by John Doe stating that the product cured his cancer. Continue Reading