## Facts

- Cliffdale Associates, Inc. marketed the “Ball-Matic Gas Saver Valve,” an automotive device advertised to improve fuel economy.
- Advertising represented that the device would improve gas mileage by about 20% (approximately four miles per gallon) and described it as a major automotive breakthrough that every car needs.
- The FTC alleged the product’s fuel-efficiency claims were false and not supported by competent testing, and that the advertising implied scientific substantiation that did not exist.
- The FTC further alleged the device was similar to existing products and performed no better than standard carburetion functions.

## Issues

1. Whether the Ball-Matic advertising conveyed representations about fuel savings and substantiation that were likely to mislead consumers in violation of § 5 of the FTC Act.
2. What elements constitute deception under § 5, including how to evaluate consumer interpretation and materiality.

## Decision

- The Commission affirmed liability, holding Cliffdale’s fuel-savings and related performance messaging deceptive under § 5 of the FTC Act.
- The Commission evaluated the advertising by its overall net impression, including implied claims about product efficacy and substantiation.
- The Commission publicly set out a general deception framework through an appended policy statement used to guide § 5 deception analysis.

## Legal Principles

- Deception under § 5 requires: (1) a representation, omission, or practice that is likely to mislead consumers; (2) assessed from the standpoint of a consumer acting reasonably in the circumstances (or the relevant targeted group); and (3) materiality, meaning the claim is likely to affect a consumer’s conduct or decision regarding the product.
- The FTC need not prove actual deception; a likelihood of misleading consumers is sufficient.
- Liability turns on the net impression of an advertisement, not on technical truth or isolated phrases.
- Performance and efficacy claims that bear on the value of a product are generally material because they are likely to influence purchasing decisions.
- Express or implied claims of scientific support can be deceptive when the asserted substantiation does not exist or does not support the represented performance level.

## Conclusion

The Commission held Cliffdale’s fuel-savings advertising deceptive under § 5 and formalized a three-part deception standard—likely to mislead, reasonable consumer interpretation, and materiality—grounded in net impression and applicable without proof of actual consumer deception.


Cliffdale Assocs., Inc., 103 F.T.C. 110 (1984)