Health Discovery Corporation; Analysis of Proposed Consent Order To Aid Public Comment, 11437-11441 [2015-04348]
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Federal Register / Vol. 80, No. 41 / Tuesday, March 3, 2015 / Notices
For
additional information about the
information collection, contact Cathy
Williams at (202) 418–2918.
SUPPLEMENTARY INFORMATION:
OMB Control Number: 3060–1174.
Title: Section 73.503, Licensing
requirements and service; Section
73.621, Noncommercial educational TV
stations; Section 73.3527, Local public
inspection file of noncommercial
educational stations.
Form Number: Not applicable.
Type of Review: Extension of a
currently approved collection.
Respondents: Not for profit
institutions.
Number of Respondents and
Responses: 2,200 respondents and
30,800 responses.
Frequency of Response:
Recordkeeping requirement; Annual
reporting requirement; One-time
reporting requirement; Third party
disclosure requirement.
Estimated Time per Response: 0.25–
1.5 hours.
Total Annual Burden: 17,050 hours.
Total Annual Cost to Respondents:
$330,000.
Obligation to Respond: Required to
obtain or retain benefits. The statutory
authority for this collection of
information is contained in 47 U.S.C.
151, 152, 154(i), 303, 307 and 308.
Nature and Extent of Confidentiality:
There is no assurance of confidentiality
provided to respondents.
Privacy Impact Assessment: No
impact(s).
Needs and Uses: On April 25, 2012,
the Commission adopted a Notice of
Proposed Rulemaking (‘‘NPRM’’) in MB
Docket 12–106, FCC 12–43, In the
Matter of Noncommercial Educational
Station Fundraising for Third-Party
Non-Profit Organizations. Under the
Commission’s existing rules, a
noncommercial educational (‘‘NCE’’)
broadcast station may not conduct
fundraising activities to benefit any
entity besides the station itself if the
activities would substantially alter or
suspend regular programming. The
NPRM proposes to relax the rules to
allow NCE stations to spend up to one
percent of their total annual airtime
conducting on-air fundraising activities
that interrupt regular programming for
the benefit of third-party non-profit
organizations.
A final rulemaking has not been
adopted by the Commission to date. The
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collection in OMB’s inventory. We will
receive OMB final approval once the
final rulemaking is adopted by the
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FOR FURTHER INFORMATION CONTACT:
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Federal Communications Commission.
Marlene H. Dortch,
Secretary. Office of the Secretary, Office of
the Managing Director.
Board of Governors of the Federal Reserve
System, February 25, 2015.
Michael J. Lewandowski,
Associate Secretary of the Board.
[FR Doc. 2015–04338 Filed 3–2–15; 8:45 am]
[FR Doc. 2015–04375 Filed 3–2–15; 8:45 am]
BILLING CODE 6712–01–P
BILLING CODE 6210–01–P
FEDERAL RESERVE SYSTEM
FEDERAL TRADE COMMISSION
[File No. 132 3211]
Formations of, Acquisitions by, and
Mergers of Bank Holding Companies
The companies listed in this notice
have applied to the Board for approval,
pursuant to the Bank Holding Company
Act of 1956 (12 U.S.C. 1841 et seq.)
(BHC Act), Regulation Y (12 CFR part
225), and all other applicable statutes
and regulations to become a bank
holding company and/or to acquire the
assets or the ownership of, control of, or
the power to vote shares of a bank or
bank holding company and all of the
banks and nonbanking companies
owned by the bank holding company,
including the companies listed below.
The applications listed below, as well
as other related filings required by the
Board, are available for immediate
inspection at the Federal Reserve Bank
indicated. The applications will also be
available for inspection at the offices of
the Board of Governors. Interested
persons may express their views in
writing on the standards enumerated in
the BHC Act (12 U.S.C. 1842(c)). If the
proposal also involves the acquisition of
a nonbanking company, the review also
includes whether the acquisition of the
nonbanking company complies with the
standards in section 4 of the BHC Act
(12 U.S.C. 1843). Unless otherwise
noted, nonbanking activities will be
conducted throughout the United States.
Unless otherwise noted, comments
regarding each of these applications
must be received at the Reserve Bank
indicated or the offices of the Board of
Governors not later than March 27,
2015.
A. Federal Reserve Bank of Kansas
City (Dennis Denney, Assistant Vice
President) 1 Memorial Drive, Kansas
City, Missouri 64198–0001:
1. UniBanc Corp., Maywood,
Nebraska; to acquire 100 percent of the
voting shares of Bank of Stapleton,
Stapleton, Nebraska:
In connection with this proposal,
UniBanc Corp. has applied to acquire
Stapleton Investment Company, and
thereby engage in general insurance
activities in a town greater than 5,000 in
population, pursuant to section
225.28(b)(11)(iii)(A).
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Health Discovery Corporation;
Analysis of Proposed Consent Order
To Aid Public Comment
Federal Trade Commission.
Proposed consent agreement.
AGENCY:
ACTION:
The consent agreement in this
matter settles alleged violations of
federal law prohibiting unfair or
deceptive acts or practices. The attached
Analysis to Aid Public Comment
describes both the allegations in the
draft complaint and the terms of the
consent order—embodied in the consent
agreement—that would settle these
allegations.
SUMMARY:
Comments must be received on
or before March 25, 2015.
ADDRESSES: Interested parties may file a
comment at https://ftcpublic.comment
works.com/ftc/melappsconsent/ online
or on paper, by following the
instructions in the Request for Comment
part of the SUPPLEMENTARY INFORMATION
section below. Write ‘‘Health Discovery
Corporation—Consent Agreement; File
No. 1323211’’ on your comment and file
your comment online at https://
ftcpublic.commentworks.com/ftc/
melappsconsent/ by following the
instructions on the web-based form. If
you prefer to file your comment on
paper, write ‘‘Health Discovery
Corporation—Consent Agreement; File
No. 1323211’’ on your comment and on
the envelope, and mail your comment to
the following address: Federal Trade
Commission, Office of the Secretary,
600 Pennsylvania Avenue NW., Suite
CC–5610 (Annex D), Washington, DC
20580, or deliver your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW.,
5th Floor, Suite 5610 (Annex D),
Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT:
Karen Mandel, Bureau of Consumer
Protection, (202) 326–2491, 600
Pennsylvania Avenue NW., Washington,
DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant
to Section 6(f) of the Federal Trade
Commission Act, 15 U.S.C. 46(f), and
FTC Rule 2.34, 16 CFR 2.34, notice is
DATES:
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hereby given that the above-captioned
consent agreement containing consent
order to cease and desist, having been
filed with and accepted, subject to final
approval, by the Commission, has been
placed on the public record for a period
of thirty (30) days. The following
Analysis to Aid Public Comment
describes the terms of the consent
agreement, and the allegations in the
complaint. An electronic copy of the
full text of the consent agreement
package can be obtained from the FTC
Home Page (for February 23, 2015), on
the World Wide Web, at https://
www.ftc.gov/os/actions.shtm.
You can file a comment online or on
paper. For the Commission to consider
your comment, we must receive it on or
before March 25, 2015. Write ‘‘Health
Discovery Corporation—Consent
Agreement; File No. 1323211’’ on your
comment. Your comment—including
your name and your state—will be
placed on the public record of this
proceeding, including, to the extent
practicable, on the public Commission
Web site, at https://www.ftc.gov/os/
publiccomments.shtm. As a matter of
discretion, the Commission tries to
remove individuals’ home contact
information from comments before
placing them on the Commission Web
site.
Because your comment will be made
public, you are solely responsible for
making sure that your comment does
not include any sensitive personal
information, like anyone’s Social
Security number, date of birth, driver’s
license number or other state
identification number or foreign country
equivalent, passport number, financial
account number, or credit or debit card
number. You are also solely responsible
for making sure that your comment does
not include any sensitive health
information, like medical records or
other individually identifiable health
information. In addition, do not include
any ‘‘[t]rade secret or any commercial or
financial information which . . . is
privileged or confidential,’’ as discussed
in Section 6(f) of the FTC Act, 15 U.S.C.
46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, do not include
competitively sensitive information
such as costs, sales statistics,
inventories, formulas, patterns, devices,
manufacturing processes, or customer
names.
If you want the Commission to give
your comment confidential treatment,
you must file it in paper form, with a
request for confidential treatment, and
you have to follow the procedure
explained in FTC Rule 4.9(c), 16 CFR
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4.9(c).1 Your comment will be kept
confidential only if the FTC General
Counsel, in his or her sole discretion,
grants your request in accordance with
the law and the public interest.
Postal mail addressed to the
Commission is subject to delay due to
heightened security screening. As a
result, we encourage you to submit your
comments online. To make sure that the
Commission considers your online
comment, you must file it at https://
ftcpublic.commentworks.com/ftc/
melappsconsent/ by following the
instructions on the web-based form. If
this Notice appears at https://
www.regulations.gov/#!home, you also
may file a comment through that Web
site.
If you file your comment on paper,
write ‘‘Health Discovery Corporation—
Consent Agreement; File No. 1323211’’
on your comment and on the envelope,
and mail your comment to the following
address: Federal Trade Commission,
Office of the Secretary, 600
Pennsylvania Avenue NW., Suite CC–
5610 (Annex D), Washington, DC 20580,
or deliver your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW.,
5th Floor, Suite 5610 (Annex D),
Washington, DC 20024. If possible,
submit your paper comment to the
Commission by courier or overnight
service.
Visit the Commission Web site at
https://www.ftc.gov to read this Notice
and the news release describing it. The
FTC Act and other laws that the
Commission administers permit the
collection of public comments to
consider and use in this proceeding as
appropriate. The Commission will
consider all timely and responsive
public comments that it receives on or
before March 25, 2015. For information
on the Commission’s privacy policy,
including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/ftc/
privacy.htm.
Analysis of Proposed Consent Order To
Aid Public Comment
The Federal Trade Commission
(‘‘FTC’’ or ‘‘Commission’’) has accepted,
subject to final approval, an agreement
containing a consent order as to Health
Discovery Corporation (hereafter ‘‘the
company’’).
The proposed consent order
(‘‘proposed order’’) has been placed on
1 In particular, the written request for confidential
treatment that accompanies the comment must
include the factual and legal basis for the request,
and must identify the specific portions of the
comment to be withheld from the public record. See
FTC Rule 4.9(c), 16 CFR 4.9(c).
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the public record for thirty (30) days for
receipt of comments by interested
persons. Comments received during this
period will become part of the public
record. After thirty (30) days, the
Commission will again review the
proposed order and the comments
received, and will decide whether it
should withdraw or make final the
agreement’s proposed order.
This matter involves the company’s
advertising for the MelApp mobile
device software application. The
Commission’s complaint alleges that the
company violated Sections 5(a) and 12
of the Federal Trade Commission Act by
representing that MelApp accurately
analyses moles and other skin lesions
for melanoma and increases consumers’
chances of detecting melanoma in early
stages, because such claims were false
or misleading, or were not substantiated
at the time the representations were
made. The complaint also alleges that
the company violated Sections 5(a) and
12 by making the false or misleading
representation that scientific testing
proves that MelApp accurately detects
melanoma.
The proposed order includes
injunctive relief that prohibits these
alleged violations and fences in similar
and related violations. The proposed
order covers any Device, as the term is
used within the meaning of Sections 12
and 15 of the FTC Act, 15 U.S.C. 52, 55.
As additional fencing-in relief, the
proposed order requires the company to
follow appropriate recordkeeping and
compliance reporting requirements, as
well as document preservation
requirements for human clinical studies
that it conducts or sponsors on the
Device.
Part I prohibits any representation
that a Device detects or diagnoses
melanoma or risk factors of melanoma,
or increases users’ chances of detecting
melanoma in early stages, unless it is
non-misleading and supported by
competent and reliable scientific
evidence. Such evidence must consist of
human clinical testing of the Device that
is sufficient in quality and quantity,
based on standards generally accepted
by experts in the field, is blinded,
conforms to actual use conditions,
includes a representative range of skin
lesions, and is conducted by researchers
qualified by training and experience to
conduct such testing. In addition, the
company must maintain all underlying
or supporting data that experts in the
relevant field generally would accept as
relevant to an assessment of such
testing.
Part II prohibits any representation
about the health benefits or health
efficacy of a Device, unless it is non-
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misleading and supported by competent
and reliable scientific evidence that is
sufficient in quality and quantity based
on standards generally accepted in the
relevant scientific fields, when
considered in light of the entire body of
relevant and reliable scientific evidence,
to substantiate that the representation is
true. For purposes of this Part,
competent and reliable scientific
evidence means tests, analyses,
research, or studies that have been
conducted by a qualified person in an
objective manner and are generally
accepted in the profession to yield
accurate and reliable results. When that
evidence consists of a human clinical
trial, the company must maintain all
underlying or supporting data and
documents that experts in the relevant
field generally would accept as relevant
to an assessment of such testing.
Part III triggered when the human
clinical testing requirement in Parts I or
II applies, requires the company to
secure and preserve all underlying or
supporting data and documents
generally accepted by experts in the
relevant field as relevant to an
assessment of the test, such as protocols,
instructions, participant-specific data,
statistical analyses, and contracts with
the test’s researchers. There is an
exception for a ‘‘Reliably Reported’’ test,
defined as a test that is published in a
peer-reviewed journal and that was not
conducted, controlled, or sponsored by
any proposed respondent or supplier.
Also, the published report must provide
sufficient information about the test for
experts in the relevant field to assess the
reliability of the results.
Part IV prohibits the company from
misrepresenting, including through the
use of a product or service name,
endorsement, depiction, or illustration,
the existence, contents, validity, results,
conclusions, or interpretations of any
test, study, or research, or that any
benefits of such product or service are
scientifically proven, including, but not
limited to, that studies, research, testing,
or trials prove that a product or service
detects or diagnoses a disease or the
risks of a disease.
Part V provides the company will pay
an equitable monetary payment of
Seventeen Thousand Six Hundred
Ninety-three Dollars ($17,693).
Part VI contains recordkeeping
requirements for advertisements and
substantiation relevant to
representations covered by Parts I
through III, as well as order receipts
covered by Part VII.
Parts VII through IX require the
company to deliver a copy of the order
to officers, employees, and
representatives having managerial
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responsibilities with respect to the
order’s subject matter, notify the
Commission of changes in corporate
structure that might affect compliance
obligations, and file compliance reports
with the Commission.
Part X provides that, with exceptions,
the order will terminate in twenty years.
The purpose of this analysis is to
facilitate public comment on the
proposed order, and it is not intended
to constitute an official interpretation of
the complaint or proposed order, or to
modify the proposed order’s terms in
any way.
By direction of the Commission,
Commissioner Ohlhausen dissenting.
Donald S. Clark,
Secretary.
Statement of Chairwoman Ramirez,
Commissioner Brill, and Commissioner
McSweeny
In the Matter of Health Discovery
Corporation, File No. 132 3211, and
FTC v. Avrom Boris Lasarow, et al.,
File No. 132 3210
February 23, 2015
Today the Commission is announcing
actions in two matters challenging the
advertising for the mobile apps MelApp
and Mole Detective.1 Both of these apps
claimed to provide an automated
analysis of moles and skin lesions for
symptoms of melanoma and increase
consumers’ chances of detecting
melanoma in its early stages.
Advertising for MelApp stated that it
used ‘‘patent protected state-of-the-art
mathematical algorithms and imagebased pattern recognition technology to
analyze the uploaded image [of a skin
lesion],’’ to ‘‘provide a risk analysis of
the uploaded picture being a
melanoma’’ and ‘‘assist[ ] in the early
detection of melanoma.’’ 2 Advertising
for Mole Detective stated that it ‘‘is the
first and only app to calculate
symptoms of melanoma right on the
phone,’’ and that it could ‘‘analyze[]
your mole using the dermatologist
ABCDE method and give[] you a risk
factor based on the symptoms your mole
may or may not be showing,’’ ‘‘increase
the chance of detecting skin cancer in
early stages,’’ and ‘‘save[] lives through
the early detection of potentially fatal
1 The Commission has voted to accept for public
comment a consent agreement with the sole
respondent in In the Matter of Health Discovery
Corporation (addressing the MelApp mobile app).
In FTC v. Avrom Boris Lasarow, et al. (addressing
the Mole Detective mobile app), the Commission
has authorized the filing of a federal court
complaint against four defendants and approved a
proposed settlement with two of those defendants,
Kristi Zuhlke Kimball and New Consumer
Solutions LLC.
2 See MelApp Complaint ¶ 6(A).
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melanoma,’’ using ‘‘shape recognition
software.’’ 3
The claims that these apps would
provide an accurate, automated analysis
of skin lesions were the central selling
points for both MelApp and Mole
Detective, and these claims needed to be
substantiated.4 Although Commissioner
Ohlhausen does not appear to disagree
with this assessment, she believes the
Commission’s complaint needs to
articulate a comparative reference point
for any ‘‘accuracy’’ claim to set an
appropriate level of substantiation in
the accompanying orders. Absent
extrinsic evidence, she believes it is
reasonable to read the ads as claiming
that the automated assessment is more
accurate than unaided self-assessment,
and that it is not reasonable to read the
ads as claiming that the automated
assessment is as accurate as a
dermatologist.
We disagree. We think the powerful
language of the advertising, such as that
quoted above, is clear on its face, so no
extrinsic evidence of consumer
interpretation is needed to support the
challenged representations that the apps
accurately analyze moles for symptoms
of melanoma and increase the chance of
detecting skin cancer in its early stages.
Because the defendants and the
respondent lacked substantiation for
those claims, we have reason to believe
they violated Section 5. Thus, it is not
necessary to hypothesize about what
implied claims, such as the accuracy
relative to different types of
assessments, consumers may have read
into the advertising.
Commissioner Ohlhausen also
suggests that the orders would, de facto,
require any future app the advertisers
market to be as accurate as a
dermatologist or biopsy. Again, we
respectfully disagree. The orders do not
prescribe a particular level of accuracy
the apps must achieve prior to being
marketed; rather, they require scientific
testing demonstrating accuracy at a level
appropriate to the claims being made.5
3 See Mole Detective Complaint ¶¶ 18(A)–(B),
18(D); Ex. A–2.
4 FTC Policy Statement Regarding Advertising
Substantiation, 104 F.T.C. 839 (1984) (appended to
Thompson Med. Co., 104 F.T.C. 648 (1984)) (‘‘[W]e
reaffirm our commitment to the underlying legal
requirement of advertising substantiation—that
advertisers and ad agencies have a reasonable basis
for advertising claims before they are
disseminated.’’), aff’d, 791 F.2d 189, 193 & 196
(D.C. Cir. 1986), cert. denied, 479 U.S. 1086 (1987).
5 Based on our application of the factors set out
in Pfizer, 81 F.T.C. 23, 64 (1970), if these advertisers
make future claims that any device detects or
diagnoses melanoma, or increases a user’s chances
of detecting melanoma in its early stages, the orders
would require that such claims be substantiated by
human clinical testing. The orders specify that such
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Thus, if scientific testing demonstrates
that the app is accurate 60% of the time,
the advertisers would be able to make a
60% accuracy claim. It would be
incumbent upon these marketers to
make sure that their advertising
conveyed that level of accuracy and did
not suggest a stronger level of science to
reasonable consumers.
Technologies such as health-related
mobile apps have the potential to
provide tremendous conveniences and
benefits to consumers. However, the
same rules of the road apply to all
media and technologies—advertisers
must have substantiation to back up
their claims. The Commission will
continue to hold advertisers accountable
for the promises they make to
consumers, especially when they
pertain to diseases and other serious
health conditions.
For the foregoing reasons, we have
reason to believe that the complaint
allegations and proposed relief reached
by consent of the settling parties are
appropriate.
Dissenting Statement of Commissioner
Maureen K. Ohlhausen
In the Matter of Health Discovery
Corporation, File No. 132–3211 and
FTC v. Avrom Boris Lasarow, et al.,
File No. 132–3210
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February 23, 2015
These matters are another example of
the Commission using an unduly
expansive interpretation of advertising
claims to justify imposing an
inappropriately high substantiation
requirement on a relatively safe
product.1 As I have previously stated,
‘‘We must keep in mind . . . that if we
are too quick to find stronger claims
testing must be blinded, conform to actual use
conditions, include a representative range of skin
lesions, and be conducted by researchers qualified
by training and experience to conduct such testing.
These conditions are designed to ensure the
accuracy and reliability of testing used to support
a narrow and clearly defined set of claims relating
specifically to the detection and diagnosis of
melanoma, a serious and progressively deadly
disease.
If these advertisers make other claims about the
health benefits or efficacy of any product or service,
the orders require such claims to be non-misleading
and supported by competent and reliable scientific
evidence. The orders further describe what
constitutes competent and reliable scientific
evidence and make it quite clear that the evidence
required is directly tied to the claim made,
expressly or implicitly, by the advertiser.
1 See Statement of Commissioner Maureen K.
Ohlhausen Dissenting in Part and Concurring in
Part In the Matter of GeneLink, Inc. and foru
International Corp., (Jan. 7, 2014); Concurring
Statement of Commissioner Maureen K. Ohlhausen,
POM Wonderful, Docket No. 9344, at 3 (Jan. 10,
2013). These statements are available at https://
www.ftc.gov/about-ftc/biographies/maureen-kohlhausen#speeches.
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than the ones reasonable consumers
actually perceive, then we will
inadvertently, but categorically, require
an undue level of substantiation for
those claims.’’ 2 Because I fear this
course of action will inhibit the
development of beneficial products and
chill the dissemination of useful health
information to consumers, I dissent.
I do not dispute that companies must
have adequate substantiation to support
the claims that they make, and I thus
would have supported complaints and
substantiation requirements based on
the app developers’ claims that their
apps automatically assessed cancer risk
more accurately than a consumer’s
unaided self-assessment using the
ABCDE factors.3
However, the complaints and orders
in these cases go further, demanding a
high level of substantiation for a wide
range of potential advertising claims.
Specifically, the orders require rigorous,
well-accepted, blinded, human clinical
tests to substantiate any claim that the
app increases consumers’ chances of
detecting skin cancer in the early
stages.4 Both orders also impose the
same high substantiation standard on
any claim that an app ‘‘detects or
diagnoses melanoma or risk factors of
melanoma.’’ 5 The orders could thus be
read to require the app developers to
demonstrate that their apps assess
cancer risk as well as dermatologists,
even if their ads make much more
limited claims.
Substantiation requirements must
flow from the claims made by the
advertiser. Under Pfizer, the
Commission should require a high level
of substantiation if the advertiser
expressly claimed or implied that the
apps provide dermatologist-level
accuracy and efficacy, and a lower level
of substantiation if the advertiser claims
a lower level of capability.6 The
2 Concurring Statement of Commissioner
Maureen K. Ohlhausen, POM Wonderful, at 3.
3 I agree with the majority that the companies
claimed, without substantiation, that the apps’
automated risk assessments were more accurate
than a user’s unaided self-assessment using the
ABCDE factors, and I therefore would support
complaints narrowly challenging this claim.
Further, I would support orders prohibiting claims
that an app ‘‘detects melanoma or risk factors of
melanoma, thereby increasing, as compared to
unaided self-assessment, users’ chances of detecting
melanoma in early stages,’’ unless substantiated by
competent and reliable scientific evidence.
4 Mole Detective Order at 5. The MelApp Order
includes a similar prohibition. See MelApp Order
at 3.
5 Mole Detective Order at 5; MelApp Order at 3.
6 Under Pfizer, the Commission determines the
level of evidence an advertiser must have to
substantiate its product efficacy claims by
examining six factors: (1) The type of product
advertised; (2) the type of claim; (3) the benefits of
a truthful claim; (4) the cost of developing
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majority’s statement appears to agree
with that approach:
‘‘[I]f scientific testing demonstrates that
the app is accurate 60% of the time, the
advertisers would be able to make a
60% accuracy claim. It would be
incumbent upon these marketers to
make sure that their advertising
conveyed that level of accuracy and did
not suggest a stronger level of science to
reasonable consumers.’’ 7
Yet, having acknowledged that the
app developers need only ensure that
their advertising conveys the
appropriate level of accuracy, the
majority still supports complaints that
do not specify what claimed level of
accuracy their advertisements conveyed
to consumers. Instead, the complaints
describe the allegedly unlawful
advertising claims amorphously. The
Mole Detective complaint, for example,
characterizes the defendants’ ads as
claiming that the app ‘‘accurately
analyzes moles for the ABCDE
symptoms of melanoma; and/or
increases consumers’ chances of
detecting skin cancer in early stages.’’ 8
This amorphous claim construction
leaves two unresolved questions:
‘‘Accurate compared to what?’’ and
‘‘Increases chances compared to what?’’
We must know how reasonable
consumers answered those questions—
and thus establish what claims
consumers likely took from the ads—
before we can determine whether
defendants provided the appropriate
level of substantiation for those claims.9
There is little reason to think that
consumers interpreted the ads to
promise early detection as accurate and
efficacious as a dermatologist. The ads
never claim that the apps substitute for
a dermatologist exam. In fact, the ads
describe the apps as tools to enhance
self-assessment in conjunction with
visits to dermatologists, and both apps
emphasize the importance of regular
dermatologist visits. Without extrinsic
evidence, I do not have reason to believe
that a reasonable consumer would take
away the implied claim that using these
apps would increase their chances of
detecting skin cancer in the early stages
substantiation for the claim; (5) the consequences
of a false claim; and (6) the amount of
substantiation that experts in the field would
require. Pfizer, Inc., 81 F.T.C. 23, 64 (1970).
7 Statement of Chairwoman Ramirez,
Commissioner Brill, and Commissioner McSweeny
at 2.
8 Mole Detective Complaint ¶ 23. The MelApp
complaint contains similar language. See MelApp
Complaint at 4.
9 Because the ads do not expressly quantify (in
absolute terms or by comparison) the accuracy or
efficacy of the apps, any purported claims by the
ads about accuracy or efficacy must be implied, not
express.
E:\FR\FM\03MRN1.SGM
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Federal Register / Vol. 80, No. 41 / Tuesday, March 3, 2015 / Notices
as compared to an examination by a
dermatologist.10
Thus, the orders impose a high level
of substantiation despite lacking
evidence that the marketing claims
require such substantiation, and the
complaints’ vague claim construction
obscures this flawed approach.11
Despite the assurances in the majority’s
statement as to what the orders require,
the complaints imply—and the majority
appears to agree 12—that reasonable
consumers expected the apps to
substitute for professional medical care.
This disconnect raises the possibility
that the Commission may use vague
complaints to impose very high
substantiation standards on healthrelated apps even if the advertising
claims for those apps are more modest.
This approach concerns me. Healthrelated apps have enormous potential to
improve access to health information for
underserved populations and to enable
individuals to monitor more effectively
their own well-being, thereby improving
health outcomes. Health-related apps
need not be as accurate as professional
care to provide significant value for
many consumers. The Commission
should not subject such apps to overly
stringent substantiation requirements,
so long as developers adequately convey
the limitations of their products. In
particular, the Commission should be
very wary of concluding that consumers
interpret marketing for health-related
apps as claiming that those apps
substitute for professional medical care,
unless we can point to express claims,
clearly implied claims, or extrinsic
evidence. If the Commission continues
to adopt such conclusions without any
mstockstill on DSK4VPTVN1PROD with NOTICES
10 When
the FTC cannot ‘‘conclude with
confidence’’ that a specific implied claim is being
made—for example, if the ad contains ‘‘conflicting
messages’’—the FTC ‘‘will not find the ad to make
the implied claim unless extrinsic evidence allows
us to conclude that such a reading of the ad is
reasonable.’’ In re Thompson Med. Co., 104 F.T.C.
648, 788–89 (1984).
11 These onerous substantiation requirements
cannot be defended as ‘‘fencing-in.’’ The FTC does
not traditionally fence in companies by requiring a
heightened level of substantiation. Instead, past
FTC decisions fence in companies by extending the
scope of a substantiation requirement beyond the
specific product, parties, or type of conduct
involved in the actual violation. See Federal Trade
Commission v. Springtech 77376, LLC, et al.
(‘‘Cedarcide Industries’’), Matter No. X120042,
Dissenting Statement of Commissioner Maureen K.
Ohlhausen at 3 (July 16, 2013). Requiring past
violators to meet a higher burden of substantiation
would not fence them in—it would only make it
more difficult for them to make truthful claims that
could be useful to consumers. Id.
12 ‘‘Commissioner Ohlhausen . . . believes . . .
that it is not reasonable to read the ads as claiming
that the automated assessment is as accurate as a
dermatologist. We disagree.’’ Statement of
Chairwoman Ramirez, Commissioner Brill, and
Commissioner McSweeny at 1.
VerDate Sep<11>2014
19:24 Mar 02, 2015
Jkt 235001
evidence of consumers’ actual
interpretations, and thus requires a very
high level of substantiation for healthrelated apps, we are likely to chill
innovation in such apps, limit the
potential benefits of this innovation,
and ultimately make consumers worse
off.13
I therefore respectfully dissent.
[FR Doc. 2015–04348 Filed 3–2–15; 8:45 am]
BILLING CODE 6750–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Meeting of the National Preparedness
and Response Science Board
Office of the Secretary,
Department of Health and Human
Services.
ACTION: Notice.
AGENCY:
As stipulated by the Federal
Advisory Committee Act, the
Department of Health and Human
Services (HHS) is hereby giving notice
that the National Preparedness and
Response Science Board (NPRSB), also
known as the National Biodefense
Science Board, will be holding a public
teleconference.
DATES: The NPRSB will hold a public
meeting on March 30, 2015, from 1:00
p.m. to 2:00 p.m. EST. The agenda is
subject to change as priorities dictate.
ADDRESSES: Individuals who wish to
participate should send an email to
NPRSB@HHS.GOV with ‘‘NPRSB
Registration’’ in the subject line. The
meeting will occur by teleconference.
To attend via teleconference and for
further instructions, please visit the
NPRSB Web site at WWW.PHE.GOV/
NPRSB.
FOR FURTHER INFORMATION CONTACT:
Please submit an inquiry via the NPRSB
Contact Form located at www.phe.gov/
NBSBComments.
SUPPLEMENTARY INFORMATION: Pursuant
to section 319M of the Public Health
Service Act (42 U.S.C. 247d–7f) and
section 222 of the Public Health Service
Act (42 U.S.C. 217a), HHS established
the NPRSB. The Board shall provide
expert advice and guidance to the
Secretary on scientific, technical, and
SUMMARY:
13 See, e.g., Scott Gottlieb and Coleen Klasmeier,
‘‘Why Your Phone Isn’t as Smart as It Could Be,’’
Wall Street Journal (Aug. 7, 2014) (blaming heavy
regulation of consumer-directed health apps and
devices for smartphones that are ‘‘purposely
dumbed down’’ and ‘‘products that are never
created because mobile-tech entrepreneurs choose
to direct their talents elsewhere’’), available at
https://online.wsj.com/articles/scott-gottlieb-andcoleen-klasmeier-why-your-phone-isnt-as-smart-asit-could-be-1407369163.
PO 00000
Frm 00055
Fmt 4703
Sfmt 4703
11441
other matters of special interest to HHS
regarding current and future chemical,
biological, nuclear, and radiological
agents, whether naturally occurring,
accidental, or deliberate. The NPRSB
may also provide advice and guidance
to the Secretary and/or the Assistant
Secretary for Preparedness and
Response (ASPR) on other matters
related to public health emergency
preparedness and response.
Background: This public meeting via
teleconference will be dedicated to the
NPRSB’s deliberation and vote on the
findings from the ASPR Future
Strategies Working Group. Subsequent
agenda topics will be added as priorities
dictate. Any additional agenda topics
will be available on the NPRSB March
30, 2015, meeting Web page, available at
WWW.PHE.GOV/NPRSB.
Availability of Materials: The meeting
agenda and materials will be posted
prior to the meeting on the March 30th
meeting Web page at WWW.PHE.GOV/
NPRSB.
Procedures for Providing Public Input:
Members of the public are invited to
attend by teleconference via a toll-free
call-in phone number which is available
on the NPRSB Web site at
WWW.PHE.GOV/NPRSB. All members
of the public are encouraged to provide
written comment to the NPRSB. All
written comments must be received
prior to March 29, 2015, and should be
sent by email to NPRSB@HHS.GOV with
‘‘NPRSB Public Comment’’ as the
subject line. Public comments received
by close of business one week prior to
each teleconference will be distributed
to the NPRSB in advance.
Dated: February 24, 2015.
Nicole Lurie,
Assistant Secretary for Preparedness and
Response.
[FR Doc. 2015–04303 Filed 3–2–15; 8:45 am]
BILLING CODE P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Disease Control and
Prevention
Advisory Committee on Immunization
Practices (ACIP)
Correction: This notice was published
in the Federal Register on January 30,
2015, Volume 80, Number 20, Page
5116–5117. Due to inclement weather in
the Atlanta, Georgia area, the first day
of the meeting scheduled for February
25 and 26, 2015 was not held. The
second day of the meeting will take
place as follows:
E:\FR\FM\03MRN1.SGM
03MRN1
Agencies
[Federal Register Volume 80, Number 41 (Tuesday, March 3, 2015)]
[Notices]
[Pages 11437-11441]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-04348]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
[File No. 132 3211]
Health Discovery Corporation; Analysis of Proposed Consent Order
To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
-----------------------------------------------------------------------
SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices. The attached Analysis to Aid Public Comment describes both
the allegations in the draft complaint and the terms of the consent
order--embodied in the consent agreement--that would settle these
allegations.
DATES: Comments must be received on or before March 25, 2015.
ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/melappsconsent/ online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``Health Discovery
Corporation--Consent Agreement; File No. 1323211'' on your comment and
file your comment online at https://ftcpublic.commentworks.com/ftc/melappsconsent/ by following the instructions on the web-based form. If
you prefer to file your comment on paper, write ``Health Discovery
Corporation--Consent Agreement; File No. 1323211'' on your comment and
on the envelope, and mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver
your comment to the following address: Federal Trade Commission, Office
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor,
Suite 5610 (Annex D), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Karen Mandel, Bureau of Consumer
Protection, (202) 326-2491, 600 Pennsylvania Avenue NW., Washington, DC
20580.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is
[[Page 11438]]
hereby given that the above-captioned consent agreement containing
consent order to cease and desist, having been filed with and accepted,
subject to final approval, by the Commission, has been placed on the
public record for a period of thirty (30) days. The following Analysis
to Aid Public Comment describes the terms of the consent agreement, and
the allegations in the complaint. An electronic copy of the full text
of the consent agreement package can be obtained from the FTC Home Page
(for February 23, 2015), on the World Wide Web, at https://www.ftc.gov/os/actions.shtm.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before March 25, 2015.
Write ``Health Discovery Corporation--Consent Agreement; File No.
1323211'' on your comment. Your comment--including your name and your
state--will be placed on the public record of this proceeding,
including, to the extent practicable, on the public Commission Web
site, at https://www.ftc.gov/os/publiccomments.shtm. As a matter of
discretion, the Commission tries to remove individuals' home contact
information from comments before placing them on the Commission Web
site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment does not include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which . . . is privileged or confidential,'' as discussed in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, do not include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept
confidential only if the FTC General Counsel, in his or her sole
discretion, grants your request in accordance with the law and the
public interest.
---------------------------------------------------------------------------
\1\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------
Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/melappsconsent/ by following the instructions on the web-based
form. If this Notice appears at https://www.regulations.gov/#!home, you
also may file a comment through that Web site.
If you file your comment on paper, write ``Health Discovery
Corporation--Consent Agreement; File No. 1323211'' on your comment and
on the envelope, and mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver
your comment to the following address: Federal Trade Commission, Office
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor,
Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your
paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at https://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before March 25, 2015. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/ftc/privacy.htm.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``FTC'' or ``Commission'') has
accepted, subject to final approval, an agreement containing a consent
order as to Health Discovery Corporation (hereafter ``the company'').
The proposed consent order (``proposed order'') has been placed on
the public record for thirty (30) days for receipt of comments by
interested persons. Comments received during this period will become
part of the public record. After thirty (30) days, the Commission will
again review the proposed order and the comments received, and will
decide whether it should withdraw or make final the agreement's
proposed order.
This matter involves the company's advertising for the MelApp
mobile device software application. The Commission's complaint alleges
that the company violated Sections 5(a) and 12 of the Federal Trade
Commission Act by representing that MelApp accurately analyses moles
and other skin lesions for melanoma and increases consumers' chances of
detecting melanoma in early stages, because such claims were false or
misleading, or were not substantiated at the time the representations
were made. The complaint also alleges that the company violated
Sections 5(a) and 12 by making the false or misleading representation
that scientific testing proves that MelApp accurately detects melanoma.
The proposed order includes injunctive relief that prohibits these
alleged violations and fences in similar and related violations. The
proposed order covers any Device, as the term is used within the
meaning of Sections 12 and 15 of the FTC Act, 15 U.S.C. 52, 55. As
additional fencing-in relief, the proposed order requires the company
to follow appropriate recordkeeping and compliance reporting
requirements, as well as document preservation requirements for human
clinical studies that it conducts or sponsors on the Device.
Part I prohibits any representation that a Device detects or
diagnoses melanoma or risk factors of melanoma, or increases users'
chances of detecting melanoma in early stages, unless it is non-
misleading and supported by competent and reliable scientific evidence.
Such evidence must consist of human clinical testing of the Device that
is sufficient in quality and quantity, based on standards generally
accepted by experts in the field, is blinded, conforms to actual use
conditions, includes a representative range of skin lesions, and is
conducted by researchers qualified by training and experience to
conduct such testing. In addition, the company must maintain all
underlying or supporting data that experts in the relevant field
generally would accept as relevant to an assessment of such testing.
Part II prohibits any representation about the health benefits or
health efficacy of a Device, unless it is non-
[[Page 11439]]
misleading and supported by competent and reliable scientific evidence
that is sufficient in quality and quantity based on standards generally
accepted in the relevant scientific fields, when considered in light of
the entire body of relevant and reliable scientific evidence, to
substantiate that the representation is true. For purposes of this
Part, competent and reliable scientific evidence means tests, analyses,
research, or studies that have been conducted by a qualified person in
an objective manner and are generally accepted in the profession to
yield accurate and reliable results. When that evidence consists of a
human clinical trial, the company must maintain all underlying or
supporting data and documents that experts in the relevant field
generally would accept as relevant to an assessment of such testing.
Part III triggered when the human clinical testing requirement in
Parts I or II applies, requires the company to secure and preserve all
underlying or supporting data and documents generally accepted by
experts in the relevant field as relevant to an assessment of the test,
such as protocols, instructions, participant-specific data, statistical
analyses, and contracts with the test's researchers. There is an
exception for a ``Reliably Reported'' test, defined as a test that is
published in a peer-reviewed journal and that was not conducted,
controlled, or sponsored by any proposed respondent or supplier. Also,
the published report must provide sufficient information about the test
for experts in the relevant field to assess the reliability of the
results.
Part IV prohibits the company from misrepresenting, including
through the use of a product or service name, endorsement, depiction,
or illustration, the existence, contents, validity, results,
conclusions, or interpretations of any test, study, or research, or
that any benefits of such product or service are scientifically proven,
including, but not limited to, that studies, research, testing, or
trials prove that a product or service detects or diagnoses a disease
or the risks of a disease.
Part V provides the company will pay an equitable monetary payment
of Seventeen Thousand Six Hundred Ninety-three Dollars ($17,693).
Part VI contains recordkeeping requirements for advertisements and
substantiation relevant to representations covered by Parts I through
III, as well as order receipts covered by Part VII.
Parts VII through IX require the company to deliver a copy of the
order to officers, employees, and representatives having managerial
responsibilities with respect to the order's subject matter, notify the
Commission of changes in corporate structure that might affect
compliance obligations, and file compliance reports with the
Commission.
Part X provides that, with exceptions, the order will terminate in
twenty years.
The purpose of this analysis is to facilitate public comment on the
proposed order, and it is not intended to constitute an official
interpretation of the complaint or proposed order, or to modify the
proposed order's terms in any way.
By direction of the Commission, Commissioner Ohlhausen
dissenting.
Donald S. Clark,
Secretary.
Statement of Chairwoman Ramirez, Commissioner Brill, and Commissioner
McSweeny
In the Matter of Health Discovery Corporation, File No. 132 3211, and
FTC v. Avrom Boris Lasarow, et al., File No. 132 3210
February 23, 2015
Today the Commission is announcing actions in two matters
challenging the advertising for the mobile apps MelApp and Mole
Detective.\1\ Both of these apps claimed to provide an automated
analysis of moles and skin lesions for symptoms of melanoma and
increase consumers' chances of detecting melanoma in its early stages.
---------------------------------------------------------------------------
\1\ The Commission has voted to accept for public comment a
consent agreement with the sole respondent in In the Matter of
Health Discovery Corporation (addressing the MelApp mobile app). In
FTC v. Avrom Boris Lasarow, et al. (addressing the Mole Detective
mobile app), the Commission has authorized the filing of a federal
court complaint against four defendants and approved a proposed
settlement with two of those defendants, Kristi Zuhlke Kimball and
New Consumer Solutions LLC.
---------------------------------------------------------------------------
Advertising for MelApp stated that it used ``patent protected
state-of-the-art mathematical algorithms and image-based pattern
recognition technology to analyze the uploaded image [of a skin
lesion],'' to ``provide a risk analysis of the uploaded picture being a
melanoma'' and ``assist[ ] in the early detection of melanoma.'' \2\
Advertising for Mole Detective stated that it ``is the first and only
app to calculate symptoms of melanoma right on the phone,'' and that it
could ``analyze[] your mole using the dermatologist ABCDE method and
give[] you a risk factor based on the symptoms your mole may or may not
be showing,'' ``increase the chance of detecting skin cancer in early
stages,'' and ``save[] lives through the early detection of potentially
fatal melanoma,'' using ``shape recognition software.'' \3\
---------------------------------------------------------------------------
\2\ See MelApp Complaint ] 6(A).
\3\ See Mole Detective Complaint ]] 18(A)-(B), 18(D); Ex. A-2.
---------------------------------------------------------------------------
The claims that these apps would provide an accurate, automated
analysis of skin lesions were the central selling points for both
MelApp and Mole Detective, and these claims needed to be
substantiated.\4\ Although Commissioner Ohlhausen does not appear to
disagree with this assessment, she believes the Commission's complaint
needs to articulate a comparative reference point for any ``accuracy''
claim to set an appropriate level of substantiation in the accompanying
orders. Absent extrinsic evidence, she believes it is reasonable to
read the ads as claiming that the automated assessment is more accurate
than unaided self-assessment, and that it is not reasonable to read the
ads as claiming that the automated assessment is as accurate as a
dermatologist.
---------------------------------------------------------------------------
\4\ FTC Policy Statement Regarding Advertising Substantiation,
104 F.T.C. 839 (1984) (appended to Thompson Med. Co., 104 F.T.C. 648
(1984)) (``[W]e reaffirm our commitment to the underlying legal
requirement of advertising substantiation--that advertisers and ad
agencies have a reasonable basis for advertising claims before they
are disseminated.''), aff'd, 791 F.2d 189, 193 & 196 (D.C. Cir.
1986), cert. denied, 479 U.S. 1086 (1987).
---------------------------------------------------------------------------
We disagree. We think the powerful language of the advertising,
such as that quoted above, is clear on its face, so no extrinsic
evidence of consumer interpretation is needed to support the challenged
representations that the apps accurately analyze moles for symptoms of
melanoma and increase the chance of detecting skin cancer in its early
stages. Because the defendants and the respondent lacked substantiation
for those claims, we have reason to believe they violated Section 5.
Thus, it is not necessary to hypothesize about what implied claims,
such as the accuracy relative to different types of assessments,
consumers may have read into the advertising.
Commissioner Ohlhausen also suggests that the orders would, de
facto, require any future app the advertisers market to be as accurate
as a dermatologist or biopsy. Again, we respectfully disagree. The
orders do not prescribe a particular level of accuracy the apps must
achieve prior to being marketed; rather, they require scientific
testing demonstrating accuracy at a level appropriate to the claims
being made.\5\
[[Page 11440]]
Thus, if scientific testing demonstrates that the app is accurate 60%
of the time, the advertisers would be able to make a 60% accuracy
claim. It would be incumbent upon these marketers to make sure that
their advertising conveyed that level of accuracy and did not suggest a
stronger level of science to reasonable consumers.
---------------------------------------------------------------------------
\5\ Based on our application of the factors set out in Pfizer,
81 F.T.C. 23, 64 (1970), if these advertisers make future claims
that any device detects or diagnoses melanoma, or increases a user's
chances of detecting melanoma in its early stages, the orders would
require that such claims be substantiated by human clinical testing.
The orders specify that such testing must be blinded, conform to
actual use conditions, include a representative range of skin
lesions, and be conducted by researchers qualified by training and
experience to conduct such testing. These conditions are designed to
ensure the accuracy and reliability of testing used to support a
narrow and clearly defined set of claims relating specifically to
the detection and diagnosis of melanoma, a serious and progressively
deadly disease.
If these advertisers make other claims about the health
benefits or efficacy of any product or service, the orders require
such claims to be non-misleading and supported by competent and
reliable scientific evidence. The orders further describe what
constitutes competent and reliable scientific evidence and make it
quite clear that the evidence required is directly tied to the claim
made, expressly or implicitly, by the advertiser.
---------------------------------------------------------------------------
Technologies such as health-related mobile apps have the potential
to provide tremendous conveniences and benefits to consumers. However,
the same rules of the road apply to all media and technologies--
advertisers must have substantiation to back up their claims. The
Commission will continue to hold advertisers accountable for the
promises they make to consumers, especially when they pertain to
diseases and other serious health conditions.
For the foregoing reasons, we have reason to believe that the
complaint allegations and proposed relief reached by consent of the
settling parties are appropriate.
Dissenting Statement of Commissioner Maureen K. Ohlhausen
In the Matter of Health Discovery Corporation, File No. 132-3211 and
FTC v. Avrom Boris Lasarow, et al., File No. 132-3210
February 23, 2015
These matters are another example of the Commission using an unduly
expansive interpretation of advertising claims to justify imposing an
inappropriately high substantiation requirement on a relatively safe
product.\1\ As I have previously stated, ``We must keep in mind . . .
that if we are too quick to find stronger claims than the ones
reasonable consumers actually perceive, then we will inadvertently, but
categorically, require an undue level of substantiation for those
claims.'' \2\ Because I fear this course of action will inhibit the
development of beneficial products and chill the dissemination of
useful health information to consumers, I dissent.
---------------------------------------------------------------------------
\1\ See Statement of Commissioner Maureen K. Ohlhausen
Dissenting in Part and Concurring in Part In the Matter of GeneLink,
Inc. and foru International Corp., (Jan. 7, 2014); Concurring
Statement of Commissioner Maureen K. Ohlhausen, POM Wonderful,
Docket No. 9344, at 3 (Jan. 10, 2013). These statements are
available at https://www.ftc.gov/about-ftc/biographies/maureen-k-ohlhausen#speeches.
\2\ Concurring Statement of Commissioner Maureen K. Ohlhausen,
POM Wonderful, at 3.
---------------------------------------------------------------------------
I do not dispute that companies must have adequate substantiation
to support the claims that they make, and I thus would have supported
complaints and substantiation requirements based on the app developers'
claims that their apps automatically assessed cancer risk more
accurately than a consumer's unaided self-assessment using the ABCDE
factors.\3\
---------------------------------------------------------------------------
\3\ I agree with the majority that the companies claimed,
without substantiation, that the apps' automated risk assessments
were more accurate than a user's unaided self-assessment using the
ABCDE factors, and I therefore would support complaints narrowly
challenging this claim. Further, I would support orders prohibiting
claims that an app ``detects melanoma or risk factors of melanoma,
thereby increasing, as compared to unaided self-assessment, users'
chances of detecting melanoma in early stages,'' unless
substantiated by competent and reliable scientific evidence.
---------------------------------------------------------------------------
However, the complaints and orders in these cases go further,
demanding a high level of substantiation for a wide range of potential
advertising claims. Specifically, the orders require rigorous, well-
accepted, blinded, human clinical tests to substantiate any claim that
the app increases consumers' chances of detecting skin cancer in the
early stages.\4\ Both orders also impose the same high substantiation
standard on any claim that an app ``detects or diagnoses melanoma or
risk factors of melanoma.'' \5\ The orders could thus be read to
require the app developers to demonstrate that their apps assess cancer
risk as well as dermatologists, even if their ads make much more
limited claims.
---------------------------------------------------------------------------
\4\ Mole Detective Order at 5. The MelApp Order includes a
similar prohibition. See MelApp Order at 3.
\5\ Mole Detective Order at 5; MelApp Order at 3.
---------------------------------------------------------------------------
Substantiation requirements must flow from the claims made by the
advertiser. Under Pfizer, the Commission should require a high level of
substantiation if the advertiser expressly claimed or implied that the
apps provide dermatologist-level accuracy and efficacy, and a lower
level of substantiation if the advertiser claims a lower level of
capability.\6\ The majority's statement appears to agree with that
approach:
---------------------------------------------------------------------------
\6\ Under Pfizer, the Commission determines the level of
evidence an advertiser must have to substantiate its product
efficacy claims by examining six factors: (1) The type of product
advertised; (2) the type of claim; (3) the benefits of a truthful
claim; (4) the cost of developing substantiation for the claim; (5)
the consequences of a false claim; and (6) the amount of
substantiation that experts in the field would require. Pfizer,
Inc., 81 F.T.C. 23, 64 (1970).
``[I]f scientific testing demonstrates that the app is accurate 60% of
the time, the advertisers would be able to make a 60% accuracy claim.
It would be incumbent upon these marketers to make sure that their
advertising conveyed that level of accuracy and did not suggest a
stronger level of science to reasonable consumers.'' \7\
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\7\ Statement of Chairwoman Ramirez, Commissioner Brill, and
Commissioner McSweeny at 2.
Yet, having acknowledged that the app developers need only ensure
that their advertising conveys the appropriate level of accuracy, the
majority still supports complaints that do not specify what claimed
level of accuracy their advertisements conveyed to consumers. Instead,
the complaints describe the allegedly unlawful advertising claims
amorphously. The Mole Detective complaint, for example, characterizes
the defendants' ads as claiming that the app ``accurately analyzes
moles for the ABCDE symptoms of melanoma; and/or increases consumers'
chances of detecting skin cancer in early stages.'' \8\
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\8\ Mole Detective Complaint ] 23. The MelApp complaint contains
similar language. See MelApp Complaint at 4.
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This amorphous claim construction leaves two unresolved questions:
``Accurate compared to what?'' and ``Increases chances compared to
what?'' We must know how reasonable consumers answered those
questions--and thus establish what claims consumers likely took from
the ads--before we can determine whether defendants provided the
appropriate level of substantiation for those claims.\9\
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\9\ Because the ads do not expressly quantify (in absolute terms
or by comparison) the accuracy or efficacy of the apps, any
purported claims by the ads about accuracy or efficacy must be
implied, not express.
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There is little reason to think that consumers interpreted the ads
to promise early detection as accurate and efficacious as a
dermatologist. The ads never claim that the apps substitute for a
dermatologist exam. In fact, the ads describe the apps as tools to
enhance self-assessment in conjunction with visits to dermatologists,
and both apps emphasize the importance of regular dermatologist visits.
Without extrinsic evidence, I do not have reason to believe that a
reasonable consumer would take away the implied claim that using these
apps would increase their chances of detecting skin cancer in the early
stages
[[Page 11441]]
as compared to an examination by a dermatologist.\10\
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\10\ When the FTC cannot ``conclude with confidence'' that a
specific implied claim is being made--for example, if the ad
contains ``conflicting messages''--the FTC ``will not find the ad to
make the implied claim unless extrinsic evidence allows us to
conclude that such a reading of the ad is reasonable.'' In re
Thompson Med. Co., 104 F.T.C. 648, 788-89 (1984).
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Thus, the orders impose a high level of substantiation despite
lacking evidence that the marketing claims require such substantiation,
and the complaints' vague claim construction obscures this flawed
approach.\11\ Despite the assurances in the majority's statement as to
what the orders require, the complaints imply--and the majority appears
to agree \12\--that reasonable consumers expected the apps to
substitute for professional medical care. This disconnect raises the
possibility that the Commission may use vague complaints to impose very
high substantiation standards on health-related apps even if the
advertising claims for those apps are more modest.
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\11\ These onerous substantiation requirements cannot be
defended as ``fencing-in.'' The FTC does not traditionally fence in
companies by requiring a heightened level of substantiation.
Instead, past FTC decisions fence in companies by extending the
scope of a substantiation requirement beyond the specific product,
parties, or type of conduct involved in the actual violation. See
Federal Trade Commission v. Springtech 77376, LLC, et al.
(``Cedarcide Industries''), Matter No. X120042, Dissenting Statement
of Commissioner Maureen K. Ohlhausen at 3 (July 16, 2013). Requiring
past violators to meet a higher burden of substantiation would not
fence them in--it would only make it more difficult for them to make
truthful claims that could be useful to consumers. Id.
\12\ ``Commissioner Ohlhausen . . . believes . . . that it is
not reasonable to read the ads as claiming that the automated
assessment is as accurate as a dermatologist. We disagree.''
Statement of Chairwoman Ramirez, Commissioner Brill, and
Commissioner McSweeny at 1.
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This approach concerns me. Health-related apps have enormous
potential to improve access to health information for underserved
populations and to enable individuals to monitor more effectively their
own well-being, thereby improving health outcomes. Health-related apps
need not be as accurate as professional care to provide significant
value for many consumers. The Commission should not subject such apps
to overly stringent substantiation requirements, so long as developers
adequately convey the limitations of their products. In particular, the
Commission should be very wary of concluding that consumers interpret
marketing for health-related apps as claiming that those apps
substitute for professional medical care, unless we can point to
express claims, clearly implied claims, or extrinsic evidence. If the
Commission continues to adopt such conclusions without any evidence of
consumers' actual interpretations, and thus requires a very high level
of substantiation for health-related apps, we are likely to chill
innovation in such apps, limit the potential benefits of this
innovation, and ultimately make consumers worse off.\13\
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\13\ See, e.g., Scott Gottlieb and Coleen Klasmeier, ``Why Your
Phone Isn't as Smart as It Could Be,'' Wall Street Journal (Aug. 7,
2014) (blaming heavy regulation of consumer-directed health apps and
devices for smartphones that are ``purposely dumbed down'' and
``products that are never created because mobile-tech entrepreneurs
choose to direct their talents elsewhere''), available at https://online.wsj.com/articles/scott-gottlieb-and-coleen-klasmeier-why-your-phone-isnt-as-smart-as-it-could-be-1407369163.
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I therefore respectfully dissent.
[FR Doc. 2015-04348 Filed 3-2-15; 8:45 am]
BILLING CODE 6750-01-P