Canada: Performance Claims in Ads: Talk Turkey Only With Your Ducks in a Row

Last Updated: October 26 2004

By Bill Hearn with research by David Hudson (Student-at-Law)

Advertisers are in the business of attracting attention. But how far can they go making bold advertising claims without adverse legal repercussions? The recent experience of restaurant-chain Kentucky Fried Chicken provides food for thought.

KFC’s Eating-Our-Chicken-is-Healthy Claims: "The Secret’s Out" (and Over)

Last year, KFC ran two short, memorable TV spots in the US market. The spots left viewers with the central message that you could eat KFC chicken as part of a "healthy diet". Trying to capitalize on the low-carb diet craze, one spot boldly stated that, "skinless", a KFC chicken breast has "just 3 grams of fat, 11 grams of carbs and packs 40 grams of protein". The other, which played more like a parody from Saturday Night Live, claimed that two KFC chicken breasts "have less fat than a BK Whopper".

Literal Meaning and General Impression of Ads

No doubt KFC could prove that each of these statements were literally true. But when it comes to determining whether or not an advertisement is misleading, "literal meaning" is not conclusive. In the US (as in Canada), to comply with the laws against misleading advertising, the "general impression" of the message conveyed by the advertisement must also be true.

Limits of Disclaimers

KFC attempted to clarify the general impression of the "eating-our-chicken-is-healthy" claims in its TV spots by carefully worded legal supers. These fine print disclaimers flashed briefly on the screen warning viewers that KFC’s chicken was not low in sodium or cholesterol. In the US (as in Canada), disclaimers can only clarify (not change) the central message of an ad. Accordingly, disclaimers must be used with care, particularly those on TV. In Canada, the literal meaning of a disclaimer will be given effect by the Competition Bureau only if the average viewer is able to "read and comprehend the disclaimer in one viewing".

Legal Repercussions of KFC’s Campaign

While few were fooled by the ads and many found hilarious the cheek in KFC’s pumped up claims (i.e., who eats KFC’s chicken "skinless", and when did the Whopper become a standard against which the health claims of other fast foods could be measured?), the US’s truth-in-advertising watchdog, the Federal Trade Commission (FTC) was not amused. After public complaints, the FTC pressured KFC to pull both TV spots. In the end, without admitting wrongdoing, KFC accepted a settlement with the FTC prohibiting KFC from making health claims in the absence of "competent and reliable scientific evidence". Violations of the settlement call for a fine of US $11,000 each time an offending ad is run.

Can Bad Press Ever Be Good?

Despite the obvious legal cramps, the buzz generated by the campaign’s over-the-top "healthy diet" claims helped ensure that the KFC brand was given prominent coverage in many US newspapers (such as the New York Times and Wall Street Journal). The campaign was also widely reported in the Canadian media. One wonders whether, through a less controversial campaign, KFC could have ever bought the "front page news" publicity (even if partly negative) that it ultimately received from its "eating-our-chicken-is-healthy" claims.

When Must Claims Be Substantiated in Canada?

The basic rule is that while ad claims cannot be false or misleading in a material respect, not all claims need to be substantiated. Some that do not need substantiation are:

  • Hyperbole - statements that are so outlandish that the ordinary consumer would not reasonably rely upon them or believe them to be true (e.g., "Works Faster Than a Speeding Bullet"); and
  • Puffery - statements that are fantastical or self-congratulating or that cannot be measured or tested and thus cannot be taken literally (e.g., "The Greatest Show on Earth").

On the other hand, the following claims require substantiation:

  • Preference Claims - statements that suggest that a group prefers one product over another (e.g., "4 out of 5 dentists recommend Trident sugarless gum"); and
  • Performance or Superiority Claims - statements that speak to the performance, efficacy or length of life of a product or that involve comparisons with a competitor’s product (e.g., "The Copper Top Tops Them All"). These claims have the greatest likelihood of being challenged because the advertiser’s competitors are usually vigilant in protecting their products against claims that unfairly damage their product’s market share or good will.

Adequate and Proper Testing

"Adequate and proper" testing of a claim requiring substantiation must be done before the claim is made in the marketplace. It is not a defence to a misleading advertising complaint that a claim has been substantiated after the claim was made. The nature and methodology of testing should ensure that the test results are current, statistically significant and not a one-time fluke. Testing should be done under controlled conditions with an appropriate protocol, target group and sample size. The Hallmarks of Good Ad Substantiation

The controversy from last year’s KFC TV spots remind us that the hallmarks of legally compliant claims and ad substantiation are as follows:

  • the "literal meaning" of ad claims must be true;
  • the "general impression" of ad claims must also be true;
  • a disclaimer can "clarify" the main message of an ad but cannot correct an untruth in it;

Conclusion

The bottom line is that advertisers should get their ducks in a row before launching an ad campaign based on performance claims. Otherwise, if an advertiser talks turkey to the market, its customers and competitors could cry foul.

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 2004 McMillan Binch LLP

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions