Why Did the FTC put 700 Advertisers on Notice?

On April 13, the Federal Trade Commission (“FTC”) issued Notices of Penalty Offenses and cover letters to close to 700 advertisers of OTC drugs, homeopathic products, dietary supplements, and functional foods, putting them on notice of their obligation to have adequate substantiation of their claims. Notably, the FTC is not accusing businesses of deceptive or unfair conduct. So why did they issue these letters? Remember these notices put the advertiser’s on notice that failing to have adequate substantiation could subject them to civil penalties of up to $50,120 per violation, in the first instance in a subsequent enforcement action. So why? – the notices are a means for the FTC to side-step the Supreme Court’s decision in AMG Capital Management v. FTC, which stripped the FTC of its ability to seek equitable monetary relief in cases under Section 13(b) of the FTC Act.