Is it appropriate for a federal court to condition a settlement of an advertising fraud case upon the posting of a webpage publicizing the settlement? That issue was considered by the Court in FTC v. Circa, CIV. 11-2172 RMB/AMD, 2012 WL 3987610 (D.N.J. Sept. 11, 2012).
That case related to advertisements on the internet about the weight loss properties of acai berries. The advertisements were made to appear like newscasts and there were even fictional reporters and commentators discussing the acai berries weight loss properties.
The Federal Trade Commission instituted a proceeding alleging false advertising. It ultimately settled with Circa Direct providing for a permanent injunction and an $11.5 million payment that would be suspended if certain disclosure criteria were met.
The Court refused to approve the settlement because the public interest would not be served unless an additional term was added. That requirement was that the FTC would display a webpage giving the public the opportunity to assess the facts of the settlement and learn more about the deception involved.
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