FTC Settles Claims Against Marketers Using Fake News Sites | Practical Law

FTC Settles Claims Against Marketers Using Fake News Sites | Practical Law

The FTC settled charges against marketers for using fake news sites to promote the health benefits of acai berry drinks.

FTC Settles Claims Against Marketers Using Fake News Sites

Practical Law Legal Update 6-524-0723 (Approx. 3 pages)

FTC Settles Claims Against Marketers Using Fake News Sites

by PLC Commercial
Published on 08 Feb 2013USA (National/Federal)
The FTC settled charges against marketers for using fake news sites to promote the health benefits of acai berry drinks.
On February 7, 2013, the FTC announced a settlement of charges that alleged the marketers of acai berry products and other weight loss supplements deceptively used fake news sites to promote the health benefits of their products. The FTC agreed to suspend a judgment of $13 million against the defendants. In exchange, the marketers agreed to pay more than $1.6 million, causing the permanent closure of their operations. If the defendant's representations regarding their financial condition are later found to be false, they will then be required to pay the full amount of the judgement.
The settlement concludes a ten-case sweep by the FTC against online marketers using fake news sites to promote weight loss products. Collectively the sweep has resulted in settlement payments of more than $9.4 million and required the defendants to:
  • Clarify when their commercial messages are advertisements rather than objective journalism.
  • Cease any further deceptive claims about any product or service.
  • Disclose any material connections with merchants.
In its cases against these schemes, the FTC alleged that the defendants' websites were designed to appear as if they were part of legitimate news organizations, featuring stories titled "Health News Health Alert" and "Health Five Beat Health News," but were actually just advertisements. The sites often falsely represented that their stories had been featured on major news outlets. In the stories, which were presented as investigations, the authors claimed to have lost significant amounts of weight and enjoyed certain health benefits from using acai berry supplements.
For more information on fake news sites used to promote the health benefits of acai berries, see the FTC's consumer alert, Fake News Sites Promote Bogus Weight Loss Benefits of Acai Berry Supplements.
For more information on deceptive advertising see, Practice Note, Online Advertising and Marketing.