Reebok will pay the money into a fund intended to return money to consumers who bought Reebok toning products, which retail for upwards of $100. Funds will be made available to consumers either directly from the FTC or through a court-approved class-action lawsuit. Consumers have been asked to visit ftc.gov/reebok for details.
In a statement, Reebok said it is standing behind its shoes and agreed to the settlement only to avoid a protracted legal battle. "The allegations suggested that the testing we conducted did not substantiate certain claims used in the advertising of our EasyTone line of products. In order to avoid a protracted legal battle, Reebok has chosen to settle with the FTC. Settling does not mean we agreed with the FTC's allegations; we do not." The company went on to say that it has received "overwhelmingly enthusiastic feedback from thousands of EasyTone customers and we remain committed to the continued development of our EasyTone line of products." Indeed, the RunTone shoes are among the products being featured on the Reebok website as of noon today.
According to the FTC site, refunds will vary depending on the product purchased and the volume of the claims. Refunds exceeding $200 may require proof of purchase. Proof of purchase may also be requested if the total amount of requests from consumers exceeds $25 million.
"[We're here] to remind advertisers big and small that they must have adequate proof for the claims they make in their ads," said David Vladeck, director of the FTC's Bureau of Consumer Protection, during a press conference that the agency began promoting yesterday. "Reebok's claims didn't withstand scrutiny. Consumers expected to get a workout, not worked over."
Reebok worked with ad agency DDB on campaigns for the products. It spent $23 million, or more than 80% of its total measured-media budget on advertising EasyTone in 2009, according to Kantar Media. In 2010, the athletic brand devoted $31 million to marketing EasyTone. And in the first half of this year it spent $10 million marketing toning products. And that 's just in the U.S.
Earlier this year, Reebok unveiled a new global EasyTone campaign featuring the "Reetoners," a group of seven women who hail from a variety of countries and are fans of the brand's toning shoes. That campaign additionally introduced the brand's EasyTone apparel line, which was also cited by the FTC.
Mr. Vladeck said that Reebok has been cooperative and pulled those ads in the midst of the investigation, because the FTC had "serious problems" with the campaign.
The sporting-goods company doesn't break out sales of specific products, but execs told Ad Age in late 2010 that it had sold 5 million pairs of EasyTone in the U.S. and double that globally. Ad Age named Reebok EasyTones one of America's Hottest Brands in 2010. Most EasyTone styles retail for about $100. Toning was a $1.1 billion category in 2010, accounting for 5.5% of all sport footwear sold, according to Matt Powell, an analyst with SportsOneSource. Toning sales are dominated by Skechers, which has a 60% share, and Reebok, which has a 33% share.
Under the settlement, Reebok is barred from making claims that toning shoes or apparel strengthen muscles or that using the products will result in a specific percentage or amount of muscle toning or strengthening, unless the claims can be supported by scientific evidence. Up until this point, Reebok claimed, consumers would see a 28% increase in the strength and tone of the butt, as well as an 11% increase in the strength and tone of hamstrings and calf muscles.
Reebok is also barred from making health or fitness-related efficacy claims, unless they are true and backed by scientific evidence. And the company must not misrepresent any tests, studies or research regarding toning products.
Reebok has stopped manufacturing boxes and materials that make those claims, and is notifying retailers about the settlement. Retailers will also be instructed to remove any prohibited marketing materials.
"Advertisers can not make claims about their products, particularly not objective claims like this without having some basis for it," Mr. Vladeck said. "That's the message we enforce. If you're going to make health claims about your products, you better have substantiated claims."
The category is focused on two basic concepts. The first involves simulating walking on a soft surface, causing the wearer to use muscles not normally used when walking on hard surfaces. The second involves creating instability, causing the wearer to engage muscles in order to balance. Though the technology varies from brand to brand, advertised benefits range from weight loss and more-toned muscles to improved posture and reduced cellulite.
Mr. Vladeck declined to comment on whether the FTC was investigating other brands that have made claims similar to those of Reebok. Skechers put a spotlight on the category during this year's Super Bowl with a spot featuring Kim Kardashian. Skechers declined to comment.
Reebok has also run afoul of the National Advertising Division of the Council of Better Business Bureaus over claims related to toning products. In January, NAD said it was recommending that the company discontinue certain claims related to its EasyTone shoes. At the time, Reebok said it would take NAD's findings into account in future advertising.