The Federal Trade Commission is pressing its claims that weight-loss marketer Roca Labs engaged in an unfair business practice by attempting to squelch bad reviews.
In papers filed Tuesday, the agency asks U.S. District Court Judge Mary Scriven in Tampa, Florida to reject Roca Labs' argument that the FTC's suit should be dismissed because it didn't give companies "fair notice" that suppressing reviews could be illegal.
"Defendants’ gag clause practices are at odds with clear, well-established public policy," the FTC argues in papers filed Tuesday with U.S. District Court Judge Mary Scriven in Tampa, Florida. "Most significantly, defendants’ practices undermine the public’s right, recognized by the Supreme Court, to receive truthful commercial information under the First Amendment."
The legal battle dates to 2015, when the FTC sued weight-loss marketer Roca Labs for allegedly engaging in unfair business practices, including attempting to prevent consumers from posting reviews. The FTC argues that the company's attempt to stifle bad reviews was likely to leave consumers with an overly favorable impression of its products.
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 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.
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 has asked Scriven to dismiss the case for a host of reasons, including that it lacked fair notice that suppressing reviews was unlawful. The company adds that the prosecution marks an attempt to apply the Consumer Review Fairness Act retroactively. That law, passed in 2016, outlaws non-disparagement clauses in form contracts.
The FTC counters in its newest papers that Roca Labs should have known that its review-suppression practices went against public policy.
Roca Labs also argued that its gag clauses weren't 100% effective, and therefore didn't prevent consumers from seeing bad reviews.
But the FTC says that even if some consumers ignored Roca Labs' attempts at review suppression, other customers may have been discouraged from posting. "The fact that some individuals resisted the gag clause practices would not make the injury reasonably avoidable as to information withheld by dissatisfied consumers who did not take that risk," the FTC writes.