Performance claims are ubiquitous. Phrases like "new and improved," "consumers prefer" and "three out of four doctors recommend" bombard us as we watch television, listen to the radio or surf the web. Performance claims are popular because they work. As consumers, we seek out the best products and the biggest bang for our buck. This mini-paper takes as its subject the legal rules that govern the making – and keeping – of those promises.
In a paper of this length, it is not possible to canvass comprehensively the issues related to claim substantiation. Rather, the purpose of this note is to plant a few signposts to guide the advertiser’s trek through some difficult legal terrain. The paper charts a course around the snags and pitfalls that can trip up a promising advertising campaign, setting out an analytical plan of attack that may be applied to any claim, whether comparative, self-comparative or non-comparative. Along the way, it attempts to dispel a few of the more widespread myths and misconceptions that advertising counsel, both in-house and external, encounter on a day-to-day basis.
First, a few general principles. The rules of this particular game are set out in paragraph 74.01(1) of the Competition Act (the "Act"), which provides as follows:
74.01(1) – A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever,
(b) makes a representation to the public in the form of a statement, warranty or guarantee of the performance, efficacy or length of life of a product that is not based on an adequate and proper test thereof, the proof of which lies on the person making the representation; …
The paragraph creates an affirmative obligation on firms to substantiate all material claims. It applies equally to claims that are comparative, self-comparative and non-comparative. Moreover, as is the case in the United States, proactive as opposed to post-facto substantiation is required. If an advertiser makes an objectively verifiable claim without having conducted "adequate and proper" tests, the company has committed a reviewable practice under the Competition Act. The fact that the claim was and continues to be accurate is not a defense to prosecution. Akin to the "look before you jump" principle, it is necessary to test before you advertise, even if you are confident of the result. The other important point here is that the onus is on the advertiser to establish adequate substantiation, not the Commissioner. Once the Commissioner has established that a performance claim was made, the burden shifts to the advertiser to establish the sufficiency of the tests conducted. Claim substantiation, as paragraph 74.01(1)(b) suggests, is a serious business.
It is the more serious given the close monitoring that occurs in the marketplace. Today’s company must expect that its competitors will vigorously test the claims it makes, particularly if the claim is comparative in nature. Since your competitors always know more about their products than you, it is important to follow a rigorous analytical step-by-step process before airing any ad requiring substantiation, let alone one that uses comparatives. As the reader will note from the discussion below, moreover, the analytical exercise we are about to discuss should be performed sooner rather than later. Involving counsel at the drawing-board stage of a campaign can help ensure that your marketing team’s creative ideas make the jump from boardroom easel to the television screen.
In its simplest form, the recommended approach to assessing any performance claim consists of three basic steps: identify, classify, evaluate. The discussion below will focus on each step in turn.
A. IDENTIFY THE CLAIMS
The first step involves identifying the explicit and implied claims that are being made. While the process appears straightforward, in practice, the actual message conveyed by an advertisement is frequently the most vigorously contested aspect of an advertising dispute. It is necessary to look beyond the explicit claims made, for the juxtaposition of visual images with text can result in a tension between what the commercial says and the impression it leaves. In fact, it can be tricky to spot the implied claims embedded in even simple advertisements. In one U.S. case, for example, the claim that "five ounces of milk goes into one slice of cheese" was held to imply that every slice of cheese contained the calcium found in five ounces of milk. In fact, twenty percent of the calcium in milk is apparently lost during cheese processing. While the claim was literally true, and the advertiser had not mentioned calcium, the claim was nevertheless misleading.
Consider in this context a recent U.S. advertisement for a fuel-line cleaning agent. The commercial compared the emissions of a car using the product (which were clear) with the black, carbon-laced emissions from a non-using car. It was held that the advertisement conveyed an implied message that the product removed all potentially harmful by-products of combustion. Since the product did not reduce emissions of carbon monoxide (a clear gas), the advertisement was adjudged misleading. As the foregoing cases demonstrate, the creator of an advertisement is not the final authority on its implied meaning. In addition to analyzing the ad itself, courts in determining the take-away message will consult extrinsic evidence in the form of marketing materials, general survey data or "copy tests," and expert witnesses. The test is not what the advertiser intended to communicate, but what was actually said, on the copy text lines and between them.
This point was emphasized this summer in a case involving General Mills Inc. that went before the National Advertising Division (NAD) of the Council of Better Business Bureaus.1 In the challenged commercial, an announcer recommends "Total Cereal" to a woman standing on a bathroom scale. Upon learning that she eats Special K, the announcer remarks that "…a study of calcium supplements and reduced-calorie diets suggest you could lose more weight and burn more calories by adding more calcium to your diet plan." The announcer went on to note that "only Total has 100% daily value of calcium, Special K has hardly any." In defending the commercial, the advertiser focussed on the express words of the advertisement, arguing that it merely communicated a benefit provided by calcium and a comparison of the calcium content of the two cereals. As Kellogg noted, however, the advertisement implied that substituting Special K with Total Cereal would result in greater weight loss, an implicit promise not supported by the underlying science. As a result, the NAD advised General Mills to pull the advertisement. As the General Mills case illustrates, an advertisement may imply more substantiation than it expressly claims, and a series of literally true statements can collectively create a misleading general impression. It is only be examining the claims in the context of the advertisement as a whole that conclusions can be drawn as to the general impression conveyed.
It is the "general impression" conveyed by the advertisement that counts under the Competition Act. Indeed, under paragraph 74.01(6) of the Act, both the literal meaning and the general impression conveyed by the advertisement must be considered in determining if a representation is materially false or misleading. Your substantiation must match both the literal meaning of the representation and the "general impression" it conveys. The bottom line? Avoid focussing narrowly on individual phrases or statements when analyzing the claims. Approach the advertisement from the standpoint of the reasonable consumer, and ask, what is the central take-away message?
B. CLASSIFY THE CLAIMS
After weighing the "net impression" conveyed, it is necessary to determine whether and, if so, what substantiation is required. The Act does not define the term "adequate and proper" test. The standard is flexible and depends upon both the level of substantiation stated and implied in the advertisement, and the nature of the claim itself. As noted above, advertisers are expected to have at least the amount of substantiation that the ad conveys (explicitly or impliedly) to the consumer. It does not follow from this principle, however, that every claim in an advertisement automatically requires substantiation. The "adequate and proper test" requirement applies to those claims with an objective component that are susceptible of proof and would likely be believed by a reasonable consumer. It does not apply to clearly hyperbolic or outlandish product performance claims that a consumer would not reasonably rely upon or believe to be true. The substantiation requirement, in other words, applies to provable advertising claims that might reasonably be taken as true.
We are into the territory of "puffery," statements that are, by their very nature, unsubstantiable and unbelievable. We do not expect an Energizer battery to "just keep going, and going, and going," we do not think that Coke is the only "real thing," and we do not hold Pepsi to its slogan, "the choice of a new generation." Similarly, we do not expect A-1 Sauce to provide consumer perception data suggesting that it makes "hamburgers taste like steakburgers." And we know that Bayer aspirin will not literally "work wonders." Inherently subjective, general and vague, these slogans are not capable of measurement and not intended to be taken literally.
As the volume of litigation in the United States attests, however, the dividing line between puff and a claim requiring substantiation can be thin. The expression, "You meet the nicest people on a Honda" minibike actually went to court in the United States (and was found to be a puff). Similarly, a claim to the status of "earth’s most comfortable shoes" was challenged and found to constitute a mere puff by the NAD of the U.S. Better Business Bureau. The claim "Nature’s Perfect Food," by contrast, was held by the Federal Trade Commission to constitute an unsubstantiated product claim. In the context of the advertisement as a whole, even an apparent puff can become a representation of fact requiring proof.
In approaching a claim that is close to the line, it is necessary to ask whether a reasonable person would rely upon the representation or take it seriously. We do not expect an Energizer battery to "just keep going, and going, and going," but we do expect it to outlast the competitors under comparable circumstances, if that is the claim being made. Another indicia of a bona fide puff is its resistance to quantification. For instance, Gillette can safely claim to be "the best a man can get," but if it advertises a closer shave than any other product on the market, it needs to back that assertion up with tests against every other razor on the market.2 In one litigated case, the slogan "Less is More" was held to constitute a mere puff because it was not measurable and would not be relied upon by the reasonable consumer.3
The specificity of the claim also goes to the likelihood that a consumer will be misled. For example, it is unlikely that any one would take the claim "Superfresh mouthwash is the best in the world" literally. But the expression, "For longer lasting fresh breath, try Superfresh mouthwash," constitutes an objectively verifiable assertion that requires substantiation. Finally, ask whether the claim is making an affirmation of fact or opinion. BMW can safely claim to consider itself "the ultimate driving machine," but if it considers itself "the ultimate driving machine with the most advanced electronic engine monitoring system on the market," it must have the science to prove it.
This last point – the distinction between representations of fact and opinion – is worth an additional word or two. As the "proper and adequate test" requirement only applies to claims that are measurable, it is not necessary to substantiate claims that are expressed in the form of an opinion. This exception to the substantiation requirement only applies to claims that consist solely of the advertiser’s opinion. For example, "The new Imac Apple Computer. We think it is so good, you’ll never go back." Additionally, an advertiser cannot escape the substantiation requirement by dressing up an objective affirmation of fact in the form of an opinion. For instance, the expression, "We think the new Apple Computer processes information faster than its competition," needs to be tested and proven before it can be made.
If you cannot fit the claim into the puffery or opinion exceptions, it is necessary to consider the type of data required to substantiate your claim. While claims can be classified in a number of different ways, the three most common can be described as efficacy claims ("Brand X is twice as effective as the leading brand"), "popularity in the market" claims ("Canada’s number one long-distance cell-phone provider") and consumer preference claims ("60 percent of consumers preferred the taste of Pepsi over Coke").
EVALUATING THE SUPPORT
The sufficiency of the support will depend upon the nature of the claim and the level of substantiation stated or implied in the advertisement itself. Before MBDOCS_1194010_1 overviewing the support issues that arise with respect to particular claims, a few misconceptions should be laid to rest. First, the fact that the company behind the advertisement is offering a money-back guarantee does not obviate the need for substantiation. The misleading advertising prohibition applies to all material claims, and does not depend upon the return policy of the advertiser. Similarly, it is not possible to cure a misleading performance claim with a disclaimer that contradicts the main claim. The test is the general impression created by the advertisement, and disclosures that render a claim meaningless are generally not effective. In a similar vein, the disclaimer "results may vary" does not eliminate the need to ensure that the results are typical of what consumers can expect to achieve if they use the product. To avoid the need for a disclaimer, simply narrow the claim to ensure that it matches the substantiation.
As noted, the type of support required will depend upon the nature of the claim. While an in-depth discussion of the particular support issues raised by each type of claim is beyond the scope of this bulletin, advertisers would be well advised to bear the following in mind:
- Efficacy Claims – This particular subset of claim should be supported by objective technical data. In evaluating the sufficiency of the data, first identify whether there is a consensus in the industry or secondary literature. Has a particular test received the impramateur of the courts or regulators? And more fundamentally, is the claim even capable of quantification at all?4
- "Popularity in the Market Claims" – Advertisers making this type of claim should take particular care to define the relevant product precisely. The substantiation should match the relevant product category and correspond to the geographic area in which the claim is made. Additionally, the market data should come from an independent source and cover the preceding 52-week period.
- Consumer Perception/Preference Claims – This type of claim requires consumer survey data, a form of claim support that presents considerable methodological challenges. Counsel for the advertiser should scrutinize the survey closely to ensure that the tests are conducted under proper conditions (so as to eliminate bias and control external variables), the sample group is representative and sufficiently large, and the results statistically significant and reproducible.
While counsel should always interrogate the support for any claim, comparative advertisements fall into the "handle with particular care" category. Guidelines established by the Television Bureau of Canada summarize the proper approach to the testing of competing products:
The advertising should compare related or similar properties or ingredients of the product, dimension to dimension, feature to feature. Comparative advertising should not isolate and highlight only superior attributes of the product to imply overall superiority.5
In short, compare related or similar properties of the product, and avoid implying overall superiority based on singular attribute differences.
As a parting observation, it should be noted that the "importance of being earnest" does not end upon the airing of the advertisement. The foregoing analytical exercise needs to be repeated to ensure that the claims in advertisements remain up-to-date. Competitors are constantly instituting product improvements, grabbing or conceding market share and implementing pricing changes. The shelf life of a claim will depend on the pace of change in the industry. For this reason, companies are well advised to establish ongoing claims review procedures (preferably set out in a specific procedures memorandum) to ensure the ongoing validity of all claims disseminated in the marketplace.
1 See General Mills, Inc. Total Cereal, Case #4053 (06/03/03).
2 In 1991, Remington was fined $75,000 for claiming that its razor "shaves closer than any other brand" without having run tests against every razor on the market. See R. v. Remington Products (Canada Inc.) (Ont. Prov. Ct.)(Feb 2, 1991)
3 Stover Sod Farms v. Stover Seed Co., 108 F.3d 1134 (9 th Cir. 1996).
4 In R. v. Bristol-Myers of Canada Limited, (1979), 45 C.P.R. (2d) 228 (Ont. Co. Ct.), the claim that Fleecy brand softener resulted in "three times more softness" was not adequately substantiated, as no test can measure softness quantitatively. Although not capable of measurement, the claim was intended to be taken as true by consumers. Accordingly, the "adequate and proper test" requirement was not satisfied.
The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.
© Copyright 2003 McMillan Binch LLP