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FTC and DOJ Jointly Bring First COVID-19 Consumer Protection Act Charges

Jacalyn Crecelius, J.D.

Written by
— Updated on May 21, 2021

FTC and DOJ Jointly Bring First COVID-19 Consumer Protection Act Charges

April 15, 2021, marked the inaugural enforcement action under the COVID-19 Consumer Protection Act (the Act). The Federal Trade Commission (FTC) and Department of Justice’s Consumer Protection Branch (CPB) requested relief for misleading marketing.

Passed in December 2020, the Act deemed it unlawful to engage in deceptive practices relating to COVID-19 treatment or prevention. It further granted enforcement authority to the FTC under Section 5 of the Federal Trade Commission Act. This authority includes seeking monetary civil penalties for first-time violators and/or an injunction to stop the defendants’ offending actions.

Misleading COVID-19 Product Claims

The FTC initiated the charges in response to defendants Eric Anthony Nepute and Quickwork LLC’s misleading claims. The defendants declared their Wellness Warrior (WW) brand’s Zinc and vitamin D nutritional supplements could treat, and even prevent, COVID-19. In an email to consumers, Nepute asserted that WW vitamin D lowers the chance of dying from COVID-19 by 52%. Reliable scientific evidence never supported these claims, thus garnering regulatory attention. The plaintiff agencies have asked for monetary civil penalties as well as injunctive relief.

The FTC initially sent a letter to Nepute in May 2020. It advised him to cease promoting these unsubstantiated claims. Also, it requested he review assertions for WW’s other supplements and remove any statements not backed by reliable evidence. Unfortunately, Nepute did not heed this warning. Instead, he continued marketing his supplements as equally or more effective at preventing COVID-19 than any available vaccination.

With its warning letter ignored, the FTC voted 3-1 to refer the complaint to the Department of Justice. The enforcement action was subsequently filed in the U.S. District Court for the Eastern District of Missouri.

COVID-19 Consumer Protection Act in Action

Bringing this action to court signals that the FTC and CPB intend to take the Act seriously. The U.S. Food and Drug Administration is no longer the only entity looking out for unlawful nutritional claims. Now, companies must follow the distinct requirements and overlapping authorities of several federal agencies at once.

This recent enforcement action also serves as precedent for future public health crises. It is possible that the COVID-19 pandemic will continue longer than expected, inviting opportunity for continued unlawful marketing. It is also possible that Congress will extend the Act’s enforcement authority to other public health emergencies.

Looking Towards Future Act Enforcement

This enforcement action marks the official groundbreaking on preventing deceptive or misleading marketing regarding COVID-19 treatment or prevention. The suit sitting before the DOJ is likely just the beginning to an influx of similar cases. Each future lawsuit’s fact pattern will incrementally sculpt the Act’s interpretation. Of course, that incoming precedent can go either way. In one direction, plaintiffs could be granted the relief they seek—striking a blow to the world of false advertising. In the other, FTC authority could be relieved of any teeth under the Act.

Notably, the FTC’s warning letter shows the commission was aware of the defendants’ illegal conduct before the Act was even passed. This indicates that other products marketed as a prevention or treatment during COVID-19’s early days risk suits as well. One might expect an industry panic of sorts as many companies took advantage of anxieties around the novel virus. Scores of other wellness products were promoted as a preventative to COVID-19 before scientists even understood what it was.

Official warnings may be directed beyond just nutritional product marketing.  The Act is broad enough to allow the FTC to target defendants even further removed from the product than Nepute. As long as someone is falsely marketing products regarding the treatment or prevention of COVID-19, they are at risk. This might include distribution and sales staff, healthcare professionals, newscasters, or even public officials.

The Impact on Public Health Perception

Claims that unregulated supplements treat and prevent COVID-19 have no doubt played a contributing role in distrust of vaccines. As more such cases go to court, the more incentive the public will have to reconsider sensational claims. An increased distrust of marketing regarding the current pandemic might even spill over to other public health emergencies.

This case forces companies to rethink the value in taking advantage of the public’s COVID-19 fears. Such practices were likely beneficial during early 2020 when consumers were frantically searching for preventative measures and treatment options. Now, companies have an increased interest in substantiating any claims they have made or will make in the future. The costs of clinically proving sensational claims—or civil fees if they do not—will far outweigh any revenue influx false marketing would have garnered.

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