Airborne Settlement May Reach $30 Million

Marketer Agrees to Pay Up to $6.5 Million Extra in False-Advertising Suit

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BATAVIA, Ohio (AdAge.com) -- Herbal-remedy marketer Airborne has agreed to pay up to $6.5 million to settle a false-advertising complaint from the Federal Trade Commission, with the sum added to a $23.5 million settlement the company already agreed to earlier this year to settle a class-action lawsuit.
The settlement adds the $6.5 million to the compensation pool from the March class-action settlement and also prohibits Airborne from making false, unsubstantiated cold-prevention, germ-fighting and efficacy claims.
The settlement adds the $6.5 million to the compensation pool from the March class-action settlement and also prohibits Airborne from making false, unsubstantiated cold-prevention, germ-fighting and efficacy claims.

The settlement adds the $6.5 million to the compensation pool from the March class-action settlement and also prohibits Airborne from making false, unsubstantiated cold-prevention, germ-fighting and efficacy claims, the FTC said in a statement.

"There is no credible evidence that Airborne products, taken as directed, will reduce the severity or duration of colds, or provide any tangible benefit for people who are exposed to germs in crowded places," said Lydia Parnes, director of the FTC's Bureau of Consumer Protection, in the commission's statement.

Of course, that's not quite how Airborne, or its inventor, former school teacher Victoria Knight-McDowell, or her husband, Thomas John McDowell -- both also named in the FTC complaint -- put it in a variety of TV, print and radio ads. The FTC complaint cites a number of ads in which the company and the McDowells claim Airborne fights germs and prevents colds.

Deal will avoid 'distraction'
In its own statement, Airborne denied wrongdoing or illegal conduct, as it did in making the previous class-action settlement, but said it made the deal to "avoid continued expense and distraction from management of the business."

"Consumers can feel confident that the advertising and labeling going into the marketplace accurately reflects what Airborne products do," Airborne CEO Elise Donahue said in the statement. "Our products help support the immune system. In fact, the key ingredients in Airborne have been studied in scientific research and reported in medical journals."

The FTC authorized the complaint against Airborne in a 3-1 vote, with Commissioner J. Thomas Rosch dissenting, and the staff filed it Aug. 13 along with the agreed-upon final order.

The class-action settlement provides refunds for purchases of Airborne-branded products made between May 1, 2001 and Nov. 29, 2007. The additional $6.5 million from the FTC settlement will be used should claims filed by the deadline of Sept. 15 exhaust the original $23.5 million settlement pool.

Airborne said it remains in talks with 28 state attorneys general to resolve their investigations into Airborne's former advertising and labeling practices, which were modified last year after a report by ABC News questioned the legitimacy of clinical research behind the claims.
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