Health Discovery Corporation; Analysis of Proposed Consent Order To Aid Public Comment, 11437-11441 [2015-04348]

Download as PDF 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 Commission would like to keep this collection in OMB’s inventory. We will receive OMB final approval once the final rulemaking is adopted by the Commission. mstockstill on DSK4VPTVN1PROD with NOTICES FOR FURTHER INFORMATION CONTACT: VerDate Sep<11>2014 19:24 Mar 02, 2015 Jkt 235001 11437 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). PO 00000 Frm 00051 Fmt 4703 Sfmt 4703 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: E:\FR\FM\03MRN1.SGM 03MRN1 mstockstill on DSK4VPTVN1PROD with NOTICES 11438 Federal Register / Vol. 80, No. 41 / Tuesday, March 3, 2015 / Notices 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 http:// 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 http://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 VerDate Sep<11>2014 19:24 Mar 02, 2015 Jkt 235001 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 http:// 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 http://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 http://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). PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 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- E:\FR\FM\03MRN1.SGM 03MRN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 80, No. 41 / Tuesday, March 3, 2015 / Notices 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 VerDate Sep<11>2014 19:24 Mar 02, 2015 Jkt 235001 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). PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 11439 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 E:\FR\FM\03MRN1.SGM Continued 03MRN1 11440 Federal Register / Vol. 80, No. 41 / Tuesday, March 3, 2015 / Notices 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 mstockstill on DSK4VPTVN1PROD with NOTICES 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 http:// www.ftc.gov/about-ftc/biographies/maureen-kohlhausen#speeches. VerDate Sep<11>2014 19:24 Mar 02, 2015 Jkt 235001 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 PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 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 03MRN1 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 http://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 http://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 http://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 http://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 http://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 http://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 http://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\
---------------------------------------------------------------------------

    \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\
---------------------------------------------------------------------------

    \8\ Mole Detective Complaint ] 23. The MelApp complaint contains 
similar language. See MelApp Complaint at 4.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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 http://online.wsj.com/articles/scott-gottlieb-and-coleen-klasmeier-why-your-phone-isnt-as-smart-as-it-could-be-1407369163.
---------------------------------------------------------------------------

    I therefore respectfully dissent.

[FR Doc. 2015-04348 Filed 3-2-15; 8:45 am]
BILLING CODE 6750-01-P