In brief

On 13 April 2023, the Federal Trade Commission (FTC) issued a letter containing a Notice of Penalty Offenses Concerning Substantiation of Product Claims to approximately 670 advertisers, putting each company on notice that deceiving consumers with advertisements that make unsubstantiated product claims could subject the company to civil penalties of up to USD 50,120 per violation under 15 U.S.C. § 45(m)(1)(B). 

The FTC noted that, while the initial distribution of the Notice was specific to those making or likely to make health claims, the Notice can potentially extend to any claims made about the performance of its products generally.  Companies that advertise the efficacy of their products should consult counsel to ensure advertising practices do not violate the law.

In Depth

Under 15 U.S.C. § 45(m)(1)(B), a Notice of Penalty Offenses puts a company on notice that engaging in conduct it knows has been found unlawful in a previous FTC administrative order, other than a consent order, could subject the company to civil penalties of up to USD 50,120 per violation. 

The Notice of Penalty Offenses Concerning Substantiation of Product Claims alerts companies that it is unlawful for an advertiser to make an objective product claim without competent and reliable supporting evidence. This includes misrepresenting the level or type of substantiation for a claim and misrepresenting that a product claim has been scientifically or clinically proven.

In its 13 April 2023 press release, the FTC asserted that many sellers continue to make unsubstantiated claims about their products and false claims about the basis for their claims. The FTC plans to use its penalty offense authority to deter companies from making deceptive claims in the future. “The FTC warned that it will not hesitate to use its authority to target violators with large civil penalties”. The press release also quotes Sam Levine, Director of the FTC’s Bureau of Consumer Protection, saying: “The requirement for advertisers to have adequate support for their advertising claims at the time they’re made is a bedrock principle of FTC law. The prospect of steep civil penalties will help ensure that advertisers don’t play fast and loose with the truth”. 

The letter also provided companies with a copy of a previously approved Notice of Penalty offenses concerning deceptive or unfair conduct around endorsements and testimonials. The Notice explains to companies that it is unlawful to: falsely claim an endorsement by a third party; misrepresent that an endorsement represents the experience or opinions of product users; misrepresent that an endorser is an actual, current, or recent user of a product or service; continue to use an endorsement without good reason to believe that the endorser continues to hold the views presented; use an endorsement to make deceptive performance claims; fail to disclose an unexpected material connection with an endorser; and misrepresent that the experience of endorsers are typical or common. Inclusion of this notice indicates that the FTC also plans to use its penalty offense authority to deter companies from making deceptive claims regarding endorsements and testimonials.


Companies should continue to carefully evaluate all advertising claims made to ensure compliance with the FTC Notices. It is important to audit any advertising claims now to avoid any civil penalties down the road. 


Mark H. Hamer is Global Chair of the Firm's Antitrust & Competition Practice Group, comprised of over 300 competition lawyers in over 60 offices across 43 countries. Mark has over 25 years of wide-ranging litigation experience, including first-chair roles in jury trials, bench trials and arbitrations. His primary focus is antitrust litigation. Before joining Baker McKenzie, Mark was a successful trial attorney in the Antitrust Division of the US Department of Justice. He was involved in some of the DOJ's highest-profile antitrust trials. Before joining the DOJ, Mark was a partner at another global law firm where he handled complex multidistrict antitrust class actions in courts across the nation. Mark's practice focuses on antitrust litigation, both private and public. He assists clients in the defense of merger challenges, class actions, and civil and criminal investigations. He helps clients navigate federal and state regulatory inquiries, enforcement actions, complex merger clearance matters and multidistrict antitrust class actions. As an experienced antitrust counsel, Mark also regularly provides antitrust advice on a broad range of non-litigation matters, including antitrust deal support, merger clearance strategy, sales and distribution advice, and antitrust compliance.


William Roppolo is the Head of Litigation and Government Enforcement for Baker McKenzie's New York and Miami offices and serves as Co-Chair of the North America Trial Team. He is also Lead Partner of the Miami office. William has successfully tried commercial and criminal cases throughout the United States, including matters involving alleged antitrust, fraud and money laundering violations. He began his legal career investigating financial crimes with the United States Customs Service. William is a former President of the Federal Bar Association's South Florida Chapter and served on the national Federal Bar Association's Professional Ethics Committee. He has published many articles on topics including anti-corruption, PFAS litigation, Federal Trade Commission enforcement trends, and trial strategies. William is a trial lawyer who focuses on high value, bet-the-company disputes concerning multinational corporations and individuals. He has successfully resolved cases involving antitrust and FTC investigations, money laundering, trade secrets, breach of fiduciary duties, the Foreign Corrupt Practices Act, export control laws, customs fraud and financial crimes. William has obtained multiple not guilty jury verdicts for clients and prevented many others from criminal investigation and indictment. He routinely represents high profile individuals and entities in crisis situations.


Emily Brait is an associate in Baker McKenzie's New York Office and a member of the Firm's North America Litigation and Government Enforcement Practice Group. She previously clerked for the Honorable Bernice B. Donald in the Sixth Circuit Court of Appeals in Memphis, Tennessee. Prior to joining Baker McKenzie, Emily worked as a litigation associate at another global law firm. Emily regularly advises clients in connection with government and regulatory investigations, complex commercial litigations in state and federal courts, arbitrations, and antitrust matters.


Ashley Eickhof is a senior associate in the Firm's North America Antitrust & Competition Practice Group. Ashley is an experienced litigator and has tried criminal cases in federal court. Prior to joining Baker McKenzie, Ashley worked at another large international law firm in the Antitrust and Competition Practice Group. Before that, Ashley began her career as a federal prosecutor for the Antitrust Division of the US Department of Justice. Ashley counsels her clients in a wide variety of litigation and antitrust matters, including complex civil litigation, criminal cartel defense, investigations by the Department of Justice and Federal Trade Commission, antitrust merger review, and compliance counseling.