FTC vs. Big Food Companies – Round 2?

By William T. Koustas –

On April 20th, the Federal Trade Commission ("FTC") announced that it has brought, and at the same time tentatively settled, charges of false advertising brought under the FTC Act against Kellogg, the world’s largest cereal maker.  The FTC accused Kellogg of falsely asserting that Frosted Mini-Wheats are “clinically shown to improve kids’ attentiveness by nearly 20%.”  Kellogg also asserted that children who eat Mini-Wheats experienced a 20% increase in attentiveness compared to children who ate no breakfast.  According to the FTC, the study Kellogg cited for substantiation of its claim shows that only about one in nine children who ate Mini-Wheats improved their attentiveness by 20% or more.  In comparison with children who ate no breakfast, children who ate Mini-Wheats were slightly less than 11% more attentive on average, with very few children actually being 20% more attentive.  

The proposed settlement Kellogg has agreed to consists of two major components: (1) prohibiting Kellogg from making similar claims regarding Frosted Mini-Wheats, or any of its cereals and snacks unless the claims are substantiated; and (2) barring Kellogg from misrepresenting the results of future studies regarding its products.  The FTC has unanimously approved the tentative settlement, but will publish it in the Federal Register seeking public comment.

In the late 1970s, the FTC embarked on a crusade against national advertisers of food products for children.  That effort was criticized by some as FTC’s attempt to act as “our Nation's Nanny.”  Will today’s action, under the FTC's new Chairman, Jon Leibowitz, signal a more broad-based effort in this area?