Thursday, May 15, 2014

Small is a beautiful target

We're regulators from the government and we're here to stifle competition from teeth to toes;
The consumer products giant [Procter and Gamble] and maker of Crest toothpaste wanted Hello to retract its claim—on its labels, in a print ad and on its website—that its toothpaste was "99% Natural." "It really puts the fear of God into you," says Mr. Dubitsky, a 48-year-old entrepreneur.
Though he stood by the claim, Mr. Dubitsky said he offered to remove it on the next batch of toothpaste labels, to be printed within a few months. That wasn't good enough. In January, P&G sued Hello, charging it with false advertising as a direct competitor under federal law.
And since Dubitsky wasn't able to sustain a legal defense, due to financial constraints on his little firm, he had to give in;
On top of legal fees, which Mr. Dubitsky said came to "six figures," his company was also left with roughly 100,000 tubes of toothpaste that couldn't be sold. Mr. Dubitsky wouldn't disclose the company's annual revenue, saying only that it's "well over" $1 million. The company currently has seven employees. 
A firm that grosses less than $2 million is operating at starvation level, and can't afford legal counsel. Even bigger fish can't;
Last week, Vibram USA Inc., the maker of FiveFingers running shoes, settled a class-action lawsuit, filed in U.S. District Court in Massachusetts in March 2012, over ads claiming its five-toed shoes strengthened muscles and prevented injuries. The Concord, Mass., company offered to pay a total of $3.75 million to customers, who paid about $100 for the shoes, and agreed to stop making the claims.
"For us it was a decision based on legal costs," said Vibram USA CEO Mike Gionfriddo, adding that the legal fees to date are already higher than the cost of the settlement.  
 Anyone surprised that America is having trouble putting people (other than lawyers) back to work?

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