General Nutrition Inc. Agrees to Pay $2.4 Million Civil Penalty
to Settle Charges It Violated Two Previous FTC Orders
FTC News Release
April 28, 1994
General Nutrition, Inc. (GNC), of Pittsburgh, Pennsylvania, the largest retailer of nutritional supplements in the United States, has agreed to pay a civil penalty of $2.4 million to settle charges it violated the terms of two previous Federal Trade Commission orders. The FTC charged that the company failed to substantiate disease-treatment, weight-loss, muscle-building and endurance claims for over 40 products. The FTC also alleged that GNC failed to make certain disclaimers when advertising the efficacy of "energy boosting" vitamin products it sold, and made prohibited claims about certain amino acid products.
In addition to the civil penalty, the proposed settlement — which also addresses allegedly deceptive claims for hair-loss products not covered under either order — would prohibit GNC from violating any provision of the 1970 or 1989 orders, and would require GNC to substantiate any future claims made for any hair-loss product.
GNC widely advertises and promotes its products through broadcast advertisements, newspaper and magazine ads, mail circulars and mail-order catalogs, product labels, and in-store displays and in-store handouts.
Weight Loss and Muscle-Building Claims
In 1989, GNC entered into a cease and desist order with the FTC that specifically prohibits the company from making muscle-building, weight-loss, and human-growth-hormone-release claims for products containing certain free-form amino acids. Further, the order requires GNC to substantiate weight-loss, muscle-building, and disease reduction claims for products it sells in specified circumstances.
The FTC's complaint alleges that in numerous instances, and in violation of this 1989 order, GNC has represented that a number of products containing certain free-form amino acids will stimulate greater production or release of human growth hormone in users than in non-users and/or will aid a user in achieving greater or faster muscular development than a non-user.
The complaint alleges also that GNC advertised and promoted a product containing certain free-form amino acids called "Sleepers Diet," purported to aid a user in attaining greater weight loss during sleep than a non-user.
Further, GNC allegedly represented that products such as "Dynamic Fat Burners," "Fat Burners," "Super Fat Burners," "Super Fat Blocker," "Fat Metabolizer Diet," "Primary Tablet," and "Diet Pep" would enable users to lose or control weight or fat and/or suppress their appetites. GNC failed to have competent and reliable scientific evidence to substantiate such claims; therefore, the FTC alleged, GNC violated the 1989 order.
Additionally, the complaint alleges that GNC made unsubstantiated representations that products such as "Protabalase ME," "Cybergenics Phase I," "Liquid Power Energy Lift," "Muscle Fire Power," "Hot Stuff," and "Cybergain," would enable users to achieve greater or faster muscular development, improve their endurance, strength, power or stamina, or shorten their exercise recovery or recuperation time, again, in violation of the 1989 order.
Disease-Treatment, Endurance Claims
Many of the complaint allegations involve GNC's role in a catalog sales licensing agreement with Nature's Bounty, Inc., of Bohemia, NY. In March 1989, according to the FTC, Nature's Bounty purchased the assets of GNC's mail-order catalog business, and under the agreement, GNC retained ultimate control over the content of advertising in subsequent catalogs. From April 1989, through February 1991, 17 such catalogs, portrayed in various ways as joint GNC/Puritan's Pride publications were disseminated to the public. (Puritan's Pride is a subsidiary of Nature's Bounty.) These catalogs, according to the complaint, contain representations for which GNC is liable under the 1989 order. For instance, the catalogs allegedly represent that a product called "New Zealand Green Lipped Mussel Extract" would cure, treat, prevent, or reduce the risk of developing any disease in humans. The complaint alleges that GNC made these representations without competent and reliable scientific evidence to substantiate them. For a product called CATA-Rx, later renamed Eye-Vites, a catalog advertisement allegedly misrepresented the results or conclusions of scientific tests and research articles with respect to the product's ability to cure, treat, prevent or reduce the risk of developing any disease in humans. The complaint also alleges that GNC failed to substantiate endurance-enhancing claims for a popular over-the-counter dietary supplement called "Ginsana."
In addition, the complaint states, the catalogs contain representations that users of a variety of products would achieve greater endurance, strength, power or stamina; for example the catalogs list products purported to stimulate greater production or release of human growth hormone. Other products were sold with claims that users would lose or control weight or fat and/or experience a suppressed appetite.
In 1969, GNC settled FTC charges regarding claims made for vitamin products and preparations advertised as beneficial in the prevention, relief, or treatment of tiredness, listlessness, lack of normal appetite, "run down" feeling, and other such symptoms. The resultant order, modified in 1970, requires GNC to clearly disclose, when advertising such products, that the great majority of persons suffering from such symptoms will not benefit from using them or that the products will not relieve such symptoms; and that a vitamin deficiency cannot be self-diagnosed and can be determined only by medical or laboratory testing under medical supervision. In violation of this order, the FTC complaint detailing the charges alleges that GNC, in numerous instances, represented that the vitamins in "Quick Shot Energy Pak," and "Sublingual B Total," would help prevent, relieve or treat tiredness, listlessness, or "depleted" feeling; without making the affirmative disclosures required by the order.
The FTC's complaint also addresses representations allegedly made by GNC for various hair-care products. The complaint charges that GNC has represented that "Biotin Hair Care Kit," "Biotin Shampoo," "Biotin Conditioner," "Biotin Vitamins and Minerals for the Hair," and "Polysorbate 80," will prevent or retard hair loss. According to the complaint, these products will not prevent or retard hair loss, and GNC did not possess and rely upon a reasonable basis for making these representations.
The proposed consent decree to settle the charges in this case would prohibit GNC from violating any provision of the 1989 and 1970 orders, and would require GNC to pay the civil penalty within five days of the court's approval of the settlement. In addition, the proposed consent would prohibit GNC from representing that the above-listed hair-care products or any other substantially similar product will prevent or retard hair loss. Similar claims for any other product or service would have to be substantiated with competent and reliable scientific evidence to substantiate the representations. Further, the proposed consent would prohibit GNC from advertising, selling or distributing any product that is represented as promoting hair growth or preventing hair loss, unless the product is approved by the Food and Drug Administration for that purpose.
On behalf of the FTC, the Department of Justice filed the complaint and proposed consent decree in the US District Court for the Western District of Pennsylvania, in Pittsburgh, today. The consent decree is subject to court approval.
The five-member Commission vote to refer the complaint and proposed consent to DOJ for filing was 5-0.
- United States v. General Nutrition, Civil Action No. 94-686 (Western District of Pennsylvania). FTC Docket Nos. C-1517, D-9175. Decision, 111 FTC 387.
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This page was posted on August 27, 2006.