Industry rallies against more FTC authority
The disputed section of the Financial Services Reform Bill (H.R. 4173) would hand FTC the power to condemn healthy food and supplement messaging that is not backed by product-specific substantiation.
Last week, the bill passed the senate without the provision, but now moves to a conference committee, where the House and Senate negotiate over the differences in their bills. The House version contains the FTC powers provision.
Trade group Natural Products Association (NPA) said Friday that it was “remobilizing” its members to campaign against the provision, which industry believes has no place in a bill about financial market reform.
“We again asked our members to take action on this important issue by contacting their members of Congress, urging them to focus on strengthening the stability of our economy, not regulating industries that had nothing to do with the financial crisis,” said John Gay, NPA’s CEO and executive director.
“At a time when businesses are struggling to both survive and create new jobs, adding burdensome new regulations and ceding more authority over our members’ businesses to the FTC is just what the economy does not need.”
Claim substantiation
The bill aims to crack down on fraud rather than marketing. However, the legislation does mean that ingredient-based substantiation – where the claim relates to the active ingredient rather than the specific product – could lose its weighting.
According to food attorney Marc Ullman, the section could mean that marketing statements on dietary supplements may require two ‘gold standard’ clinical trials to back them.
Last month, NPA joined voices with industry groups American Herbal Products Association and the Council for Responsible Nutrition in their initial campaign against the bill. They were been joined in their concerns by the likes of the Direct Marketing Association (DMA) and the Interactive Advertising Bureau.
“NPA members responded strongly to the first call to urge senators to oppose any FTC powers amendment while they were considering the legislation, and I think they can take some credit for keeping the provision off the Senate bill. Now we need to carry that message to both the House and Senate as they seek to iron out the differences between their versions of the legislation,” said Gay.
