iTunes and Amazon have made it fairly easy for developers to market and sell smartphone software applications (or "apps") directly to consumers. While the software may undergo some review before the app is made available to consumers, the advertising claims used to sell the software are unlikely to receive the same scrutiny. Software developers need to ensure that their claims are truthful, adequately substantiated and in full compliance with the law. Otherwise, software developers may find themselves on the wrong side of enforcement activity from the Federal Trade Commission ("FTC").
Under its Section 5 authority, the FTC can issue administrative complaints when it believes that there is "reason to believe" that a law has been or is being violated. 15 U.S.C. § 45(b). The marketers of two mobile "acne treatment" apps have found themselves in the crosshairs of the FTC and its enforcement authority. In the Matter of Koby Brown and Gregory W. Pearson, individually, and doing business as Dermapps, FTC File No. 102-3205; In the Matter of Andrew N. Finkel, FTC File No. 102-3206.
The marketers of the "AcneApp" and "Acne Pwner" software apps claimed that their products treated acne with colored lights emitting from the smartphones. Consumers were advised to hold the screen for the smartphone against the area of skin needing treatment for a few minutes each day while the app was activated. According to the FTC Complaint, Acne Pwner was marketed with claims stating "Kill ACNE with this simple, yet powerful tool!" Acne Pwner was offered for 99 cents in the Android Marketplace and there were approximately 3,330 downloads of the product. AcneApp advertised that its product was "developed by a dermatologist" and was supported by "a study published by the British Journal of Dermatology [, which] showed blue and red light treatments eliminated p-acne bacteria (a major cause of acne) and reduced skin blemishes by 76%." AcneApp was available on iTunes for $1.99, where the app was downloaded 11,600 times.
The FTC charged that there was no substantiation for the claims and that the marketers falsely claimed that the study in the British Journal of Dermatology proved that blue and red light therapies were an effective acne treatment. As part of a recently-announced settlement, both marketers would be barred from making acne-treatment claims or any safety, performance, benefits or efficacy claims about their mobile apps without competent and reliable scientific evidence. The marketers would also be enjoined from misrepresenting research, tests or studies as part of their marketing claims. Finally, the marketers of AcneApp would pay fines of $14,294, and Acne Pwner agreed to pay fines of $1,700.
There are significant opportunities for software programmers to directly market to consumers in today's marketplace. Those marketing directly to consumers need to remember to ensure that their advertising claims are truthful, adequately substantiated and in compliance with the law. The FTC may be watching.