Social media is a powerful cog in today’s marketing machine. It’s dynamic. It’s personal. It gives consumers a voice. But as valuable as consumer-generated content is, it’s not without risk.
A company, for instance, may diligently follow FDA’s rule that claims to treat or prevent a disease cannot be made for dietary supplements.1 Consumers, however, are not beholden to FDA’s rule.
On a company’s website or social media page, consumers can make statements such as “Product X is helping me steer clear of any colds this winter” or “I’ve overcome my type 2 diabetes with Product X.” Scenarios like these beg the question: When it comes to social media, are companies responsible for the regulatory correctness of consumer-generated content?
FDA recently addressed this question head-on in guidance for drug companies. No similar guidance, however, has been provided for dietary supplement companies, and questions persist.
Guidance for Drug Firms
In January, FDA issued draft guidance providing recommendations to drug companies on submitting online promotional materials.2 Unlike dietary supplement companies, drug companies must submit to FDA their promotional materials—including online promotions—at the time of initial dissemination.3 The new guidance covers which online materials FDA expects drug companies to submit and what FDA believes are best practices for making submissions.
One portion of the guidance, in particular, has raised questions over consumer-generated content. The passage indicates that drug companies need not submit “independent” consumer-generated content.
Specifically, the guidance states that, in FDA’s view, a drug company “is not responsible for UGC [user-generated content] that is truly independent of the firm (i.e., is not produced by, or on behalf of, or prompted by the firm in any particular).” The guidance explains further that “FDA will not ordinarily view UGC on firm-owned or firm-controlled venues such as blogs, message boards, and chat rooms as promotional content on behalf of the firm, as long as the user has no affiliation with the firm and the firm had no influence on the UGC.”
As support for its stance, FDA cites Section 230 of the Communications Decency Act (CDA). Section 230 states that “[n]o provider...of an interactive computer service shall be treated as the publisher or speaker of any information provided by another content provider.”4
Congress originally enacted the CDA to censor online pornographic material. Section 230, however, has been interpreted as providing protection to any company offering an online forum for third-party postings. This protection has been hailed as enabling a level of Internet freedom that is unique to the United States. With the protections of Section 230, companies like Facebook and YouTube can exist without undue liability for their users’ posts. Likewise, companies such as dietary supplement firms that sell consumer goods should be able to allow consumer-generated content, without undue liability. The problem dietary supplement companies face, however, is that neither of the regulators to which they answer has addressed Section 230.
Section 230: Not So Clear for Dietary Supplements
Although dietary supplement companies are not obligated to submit their marketing materials to FDA at the time of dissemination, their marketing is subject to postmarket regulation by both FDA and the FTC.
FDA has not issued any guidance for dietary supplement companies similar to what it recently issued for drug companies. Moreover, FDA actions on at least one occasion suggest that the agency might view Section 230 differently for the purposes of dietary supplement marketing.
A 2011 FDA warning letter appears to conflict with FDA’s stance in its recent drug guidance. In the warning letter, FDA alleged that a dietary supplement company had made unapproved “therapeutic claims” (i.e., claims to treat or prevent a disease) not only on its website but also on its Facebook page.5 FDA stated, specifically, that the Facebook page “include[d] numerous testimonials...which make disease claims such as ‘When I started taking OM24, within days my osteoarthritis was relieved’ and ‘I totally control my diabetes and blood pressure with the tablets.’” It is not clear whether the company itself or consumers posted the testimonials. If it was the latter, then it appears that FDA would hold a dietary supplement company responsible for consumer-generated content, regardless of the protections of Section 230 of the CDA.
The FTC’s Endorsement Guides address the use of testimonials and other third-party statements used in advertising, including advertising for dietary supplements.6In 2009, the FTC issued a revised version of its Endorsement Guides.
Among other things, the FTC sought to articulate when a third-party statement in online media might be considered “advertising” that is subject to regulation.7 The FTC stated that the “fundamental question to ask is whether, viewed objectively, the relationship between the advertiser and the speaker is such that the speaker’s statement can be considered ‘sponsored’ by the advertiser and therefore an ‘advertising message.’”
The FTC further explained that companies should consider whether the third-party speaker is “(1) acting solely independently, in which case there is no endorsement, or (2) acting on behalf of the advertiser or its agent, such that the speaker’s statement is an ‘endorsement’ that is part of an overall marketing campaign...”8
This “test” does not answer, to any satisfactory degree, the question of whether consumer-generated content might be the responsibility of advertisers, in the FTC’s view. It remains an open question, for instance, whether, in the FTC’s view, simply providing a platform for posts or seeking certain types of posts (e.g., “Tell us why you like Product X”) might equate to “sponsorship.”
In the five years since the FTC issued its revised Endorsement Guides, the agency has taken enforcement action that has helped further clarify its views on more straightforward issues, such as gifts and payments to bloggers.9
The FTC, however, has yet to address the range of questions surrounding consumer-generated content that is spontaneously posted to company sites.
What’s a Dietary Supplement Company to Do?
Against this regulatory background, dietary supplement companies are left to wonder what to do about consumer-generated content appearing on their websites and social media pages. The strict legal answer is that Section 230 of the CDA applies equally to dietary supplement companies and drug companies—meaning that independent, consumer-generated content is largely not a liability. No company, however, wants to be the test case if FDA or the FTC decide to take an aggressive stance (or, in the case of FDA, continue an existing aggressive stance).
In the absence of clear guidance, each company will need to carefully consider Section 230 and chart its own path based on its own business model and risk tolerance.
The route of least risk is obviously to decline to provide any means for consumers to post on company websites or social media sites. But, that may not be feasible or desirable in today’s social media–rich environment. A more open, “middle ground” might be to review comments periodically and remove those statements that implicate high-risk areas—e.g., statements suggesting disease treatment or prevention and “too good to be true” weight-loss claims.
Companies allowing any consumer-generated content should bear in mind that the protections of Section 230 may not be unlimited. Similar to the manner in which FDA’s drug guidance seeks to exempt only content that is truly “independent,” courts have found that certain actions by website owners will prevent Section 230 from applying. For instance, in a decision last year that has created controversy, a court held that Section 230 did not protect a website owner who “intentionally encourage[d]” the postings at issue and “add[ed] his own comments ratifying or adopting the posts.”10 The website owner was being sued for defamation and libel over the postings. In another case, the Ninth Circuit held that immunity did not extend to the website Roommates.com because the company had offered drop-down menus that prompted third-party statements that were alleged to be discriminatory in violation of fair-housing laws.11
A dietary supplement company allowing consumer-generated content will need to assess how it requests and presents third-party content, in light of the existing case law.12 This is, of course, especially true if a company chooses to allow free-flowing consumer-generated content, without any monitoring or deletions.
- FDA, Draft Guidance for Industry: Fulfilling Regulatory Requirements for Postmarketing Submissions of Interactive Promotional Media for Prescription Human and Animal Drugs and Biologics, at 1 (Jan. 2014), available at http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatory Information/Guidances/UCM381352.pdf.
- 21 C.F.R. §§ 314.81(b)(3)(i), 601.12(f)(4), 514.80(b)(5)(ii). Companies marketing human prescription drugs or prescription new animal drugs must submit labeling and advertising materials. Companies marketing over-the-counter new animal drugs must submit labeling materials and mailing pieces, but not advertising materials.
- Emphasis added.
- FTC, Guides Concerning the Use of Endorsements and Testimonials in Advertising, 74 Fed. Reg. 53124 (Oct. 15, 2009).
- See id. at 53125.
- Id. at 53126.
- See, e.g., FTC Closing Letter Regarding Village Green Network, Inc. (Feb. 18, 2014) (involving paid bloggers); FTC Closing Letter Regarding Nordstrom Rack (Feb. 22, 2013) (involving “social media influencers” who were invited to a store preview event and given gift cards); FTC, Press Release, Firm to Pay FTC $250,000 to Settle Charges That It Used Misleading Online “Consumer” and “Independent” Reviews (Mar. 15, 2011) (paid endorsers allegedly posed as consumers reviewers); FTC, Press Release, Public Relations Firm to Settle FTC Charges that It Advertised Clients’ Gaming Apps Through Misleading Online Endorsements (Aug. 10, 2010) (company employees allegedly posed as consumer reviewers).
- FDA, Warning Letter to Cellular RX (May 25, 2011), available at http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2011/ucm256922.htm
- 47 U.S.C. § 230(c)(1) (emphasis added).
- 47 U.S.C. § 230(f)(3) (emphasis added). It should be noted that Section 230 does not provide immunity from intellectual property claims. The IP exceptions to the CDA are beyond the scope of this article.
- In a decision last year that has created controversy, a court held that “a website owner who intentionally encourages illegal or actionable third-party postings to which he adds his own comments ratifying or adopting the posts becomes a ‘creator’ or ‘developer’ of that content and is not entitled to immunity.” Jones v. Dirty World Entertainment Recordings, LLC, 2013 WL 4068780, at *5 (E.D. Ky. Aug. 12, 2013). In another controversial case, the Ninth Circuit held that immunity did not extend to Roommates.com where it offered drop down menus prompting discriminatory statements. Fair Housing of Council of San Fernando Valley v. Roommates.com, CV-04-56916 (9th Cir. 2008).