The National Advertising Division of the Better Business Bureau ("NAD") recently announced updates to its procedures. The change was announced by the Director of the NAD, Laura Brett, at the NAD's Annual Conference and is the self-regulatory body's response to a recommendation from the ABA Antitrust Section's Working Group.
The new procedural process is codified in sections 3.8-3.9 of The Advertising Industry's Process of Voluntary Self-Regulation (available here). In sum, the change comes into play when the NAD reaches a decision that an advertiser's claim must be discontinued. Previously, a case could be re-opened only in "extraordinary circumstances" but under the updated procedures, new evidence to support a claim can be grounds for re-opening a case.
Where the NAD has decided that an advertiser must discontinue its claim, the advertiser can either (1) continue using the claim at issue and ask the NAD to consider the new substantiation in a compliance proceeding, or (2) re-open the case by seeking the NAD's review of the new substantiation before resuming use of the claim at issue. Whether or not the NAD allows a case to be re-opened is up to the Director of the NAD, and she can consider whether the new evidence was available to the party at the time the NAD case closed and whether the new evidence would have changed the NAD's decision in a material way.
According to the Director of the NAD, this change "balances allowing advertisers to make truthful, substantiated claims with the need for speed and finality in the self-regulatory process for competitive challenges."
TAKEAWAY: Under the updated procedures, advertisers may introduce new materials to support a previously discontinued claim. This opens the door to allow advertisers to re-introduce claims that were otherwise discontinued due to an NAD action.
This article is presented for informational purposes only and is not intended to constitute legal advice.
