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;
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