Three years ago, the Federal Trade Commission sued weight-loss marketer Roca Labs for allegedly engaging in unfair business practices, including attempting to prevent consumers from posting reviews.
The FTC argues in the case -- which is pending in federal court in Tampa, Florida -- that Roca Labs' prior practice of attempting to stifle bad reviews were likely to leave people with an overly favorable impression of its products.
On Tuesday, Roca Labs argued in new court papers that the FTC's claims should be dismissed for several reasons, including that its attempts to prevent bad reviews failed.
The FTC "provides the court with no basis upon which to find that any consumer or potential consumer actually suffered any ... intangible harm as a result of the alleged chilling effect of the disparagement clause," Roca Labs writes in papers filed with U.S. District Court Judge Mary Scriven. "In fact, there is ample evidence that the disparagement clause did not work, and as a result, there were, and still are, negative reviews posted online by defendants' customers."
Roca Labs, which touts its weight-loss products as more effective than gastric bypass surgery, allegedly said in a prior version of its sales terms (sent in package inserts and also available online) that any negative online reviews would be considered defamatory. The company also told consumers that they would be subject to $100,000 in damages for posting reviews, according to the FTC.
Roca Labs followed up on its threats by suing at least four customers, according to the FTC.
Roca Labs says in its newest papers that dropped all of those matters. "At no time did defendants receive any settlement or favorable verdict or judgment in any case involving the non-disparagement clause," it writes.
While the FTC has brought other enforcement actions regarding marketers' use of social media, the lawsuit against Roca Labs appeared to mark the first time the agency alleged in a lawsuit that suppressing commentary is in itself an unfair practice.
Roca Labs also contends that the FTC is attempting to apply the Consumer Review Fairness Act retroactively. That law, passed in 2016, outlaws non-disparagement clauses in form contracts.
But the FTC counters that Roca Labs' non-disparagement clause was illegal even before Congress passed the Consumer Review Fairness Act.