We always look forward to the thoughtful and data-rich report National Advertising Division (NAD) issues each year summarizing the work it has accomplished in the past year. Some of the data can be a bit difficult to parse, as some numbers are reported in cases decided in the prior year, while other numbers are reported in cases filed. Nonetheless, it is always an impressive compilation and highlights many of the trends in case filings as well as dispositions, and it is a good indicator of the state of self-regulation. Here are the highlights:
Tracks: This marks the second full year of Fast-Track SWIFT and Complex Track options for challengers in addition to the traditional Standard Track. Use of the SWIFT program continues to grow, making up 12 percent of the cases NAD decided in 2022. In 2023, we can expect to see some changes in the SWIFT procedures reflecting the NAD’s experience handling these cases that are decided in less than a month, including expanding SWIFT jurisdiction in appropriate cases to implied claim challenges. The Complex Track has been slower to take off, with only a few cases opting for this process that is decided by a collaborative panel of NAD staff lawyers. The Standard Track continues to be the primary choice for challengers, making up 68 percent of the cases NAD decided in 2022.
Participation: In the past two years, the number of FTC referrals for nonparticipation or noncompliance is down considerably, with only two referrals in 2022 and four in 2021 (whereas in prior years we would see about 10 referrals). Appeals also seem to be trending down, as this year there was a roughly 40 percent drop in appeal filings (11) compared to 2020 (18) and 2021 (17).
Cases by Industry: NAD’s docket is consistently heavy with telecommunications challenges, and this year was particularly active, with 27 percent of the docket being telecom cases. Close to 40 percent of the cases fell into the food/beverage (13%), drugs/health (12%), dietary supplements (9%) and household products (8%) categories.
Trends in Case Filings: This year marked the first in recent memory that NAD looked at cases involving privacy and data security advertising claims. Perhaps reflecting concerns with the state of the economy, 17 percent of the cases included a challenge to pricing or value messages. While always a staple at NAD, challenges to superiority claims made up a surprising 21 percent of the cases, and another 21 percent involved health-related claims. NAD focused a good amount of time in is monitoring program looking at environmental and sustainability claims, with such cases representing about 11 percent of the docket.
The 2022 report in full can be accessed here.
