Anecdotal evidence

"Anecdotal evidence" is used in more than one setting, and its meaning depends on the context. In consumer protection, it means reports of results from individual consumers or patients, or from a small group of them, offered to show what a product does.1 Source: FTC v. QT, Inc., Memorandum Opinion and Order

Experts in FTC matters treat it as a starting point for testing rather than as proof: it can be hypothesis generating, but hypotheses must be carefully tested because many do not prove to be accurate.2 Source: Report of Omer Kucuk, M.D., ¶ 45

A testimonial reports what happened to one person after using a product, and that sequence alone cannot show that the product caused the result. As the Seventh Circuit put it in FTC v. QT, Inc., 512 F.3d 858, 862 (7th Cir. 2008), testimonials are not a form of proof because most represent the post hoc ergo propter hoc fallacy, since a person who feels less pain after putting on a bracelet may have enjoyed the same reduction without it.6 Source: Initial Decision Filed by Chief Administrative Law Judge, D. Michael Chappell [Public Record Version], n.5 The FTC's Dietary Supplements: An Advertising Guide for Industry makes the same point about placebo effects, saying that even genuine experiences may be attributable to a placebo effect or other factors unrelated to the supplement.7 Source: Memorandum in Support of Plaintiff's Application for an Order to Show Cause Why Defendants Enforma Natural Products, Inc. and Andrew Grey and Nonparty Michael Ehrman Should Not Be Held in Civil Contempt (quoting FTC, Dietary Supplements: An Advertising Guide for Industry) A witness in an FTC administrative hearing added a second reason: an anecdote is typically an observation in one or a few patients that may have been seen by chance, and with so few patients it may not be generalizable to the population.8 Source: Testimony of James A. Eastham, M.D., FTC Docket No. 9344

The substantiation duty exists because buyers usually cannot sort out coincidence from effect on their own. An FTC administrative law judge reasoned that the placebo effect of consumer expectations when taking a purported remedy makes it difficult for consumers to verify product effectiveness for themselves.9 Source: Initial Decision Filed by Chief Administrative Law Judge, D. Michael Chappell [Public Record Version], n.5 Requiring controlled evidence before a health claim is made keeps a seller from collecting money on the strength of results the buyer has no means to check, and treating anecdotes as a reason to run a study, not as the study, preserves their legitimate role in generating hypotheses.

A business that rests health claims on anecdotes faces an injunction first. Once a challenged practice is found to be prohibited by Section 5 of the FTC Act, the appropriate remedy is an order requiring the respondents to cease and desist from it.47 Source: Initial Decision Filed by Chief Administrative Law Judge, D. Michael Chappell [Public Record Version], n.5 In the Sagee settlement that took the form of a permanent injunction that conditions future health, performance, and efficacy claims on competent and reliable scientific evidence.48 Source: Stipulated Final Judgment and Order for Permanent Injunction and Monetary Relief (Sagee) The order attached to the Daniel Chapter One initial decision also reaches beyond the challenged products, because it covers any dietary supplement, food, drug, or other health related product, service, or program.49 Source: Initial Decision Filed by Chief Administrative Law Judge, D. Michael Chappell [Public Record Version], n.5

Money exposure grows when a seller already operates under an order. In On Point, the court put the starting point for contempt damages at $102,768,235.47 and held the defendants jointly and severally liable for an amount not to exceed that figure, with any lesser final amount to be set after a claims process.50 Source: FTC v. On Point Global LLC, No. 19-25046-Civ-Scola (S.D. Fla. Nov. 15, 2021) In the Enforma matter, the Commission argued that where consumers are induced to buy a product through deceptive means, a contempt sanction in the amount of gross sales of the product is appropriate.51 Source: Memorandum in Support of Plaintiff's Application for an Order to Show Cause Why Defendants Enforma Natural Products, Inc. and Andrew Grey and Nonparty Michael Ehrman Should Not Be Held in Civil Contempt The B4B complaint, for its part, invoked authority to award monetary civil penalties of up to $46,517 for each violation of Section 5(a) of the FTC Act pursuant to the CCPA.52 Source: Complaint for Civil Penalties, Permanent Injunction, Monetary Relief, and Other Relief (Earth Tea)

Evidence of happy customers does not erase liability, though it can affect the size of a monetary sanction. The On Point court found significant and credible anecdotal evidence that many customers were satisfied, concluded that imposing over $100,000,000 in sanctions would be inequitable, and chose a claims process for unsatisfied consumers.53 Source: FTC v. On Point Global LLC, No. 19-25046-Civ-Scola (S.D. Fla. Nov. 15, 2021) Refund volume can cut the other way, as in the Q-Ray matter, where the company acknowledged at least a 25% refund request rate from dissatisfied purchasers.54 Source: FTC v. QT, Inc., Memorandum Opinion and Order Downstream sellers are exposed too, since a notice distributed under the Superior Products injunction warns that failure to follow any provisions of the order that apply to a distributor could result in civil or criminal sanctions.55 Source: Permanent Injunction, FTC v. Superior Products International II, Inc., No. 2:20-cv-2366-HLT-GEB (D. Kan.), Attachment A A notice sent to Seasilver distributors likewise warns that noncompliance may subject them to civil or criminal penalties.56 Source: Stipulated Final Judgment and Order for Permanent Injunction and Other Equitable Relief (Seasilver), Attachment C