How is "Law + Story" a changemaker's equation
This explainer discusses a popular case that lies precisely on the intersection of law + story to show how this equation is any modern business' holy grail
Visualize this: You are are browsing through the Internet and you come across a website that offers skincare products that are “clinically proven” to give certain specific results. In the next few days, a dozen similar products with the same features and claims are presented to you courtesy the targeted advertising algorithm. The question is, how do you choose which of these companies to rely on?
Storytelling strategy : This first company’s website stands out to you because it tells you a compelling story - it conveys its narrative convincingly by showing the world’s top super models and iconic women in every sphere of work, backing its products. Once you are taken in with the women of substance flooding your screen, you start reading about these products that are touted as being "clinically proven" to "boost genes”, leading to "visibly younger skin in just seven days”.
The other companies you come across don’t carry as compelling a narrative as this one, so which company’s story do you naturally gravitate towards and ultimately invest in?
Extensive research in consumer psychology has shown that one gets drawn to stories that are most aspirational for them. Obviously, you get drawn to the resonating story and buy the former company’s magnifique products. (Kudos to this company’s persuasive narrative and to the creative team that put it together.)
But now you use these products and don’t really experience "visibly younger skin” in just seven many days and you certainly don’t experience the “clinically proven” “gene boost”. And thus fails the company’s glorious marketing campaign and its compelling story.
The L’Oréal USA case
You might have guessed by now that the aforementioned company here is L’Oréal USA Inc. and the products in question are - “Lancôme Génifique” and “L’Oréal Paris Youth Code”. The above was an actual account of what resulted in a complaint against L’Oréal USA Inc. in public interest in 2014 by the United States Federal State Commission (FTC). The FTC cited the company’s false and unsubstantiated claims claims through various ads, campaigns and promotional material from February 2009 to April 2013. Ultimately, L'Oréal USA was barred from making future anti-aging claims without solid scientific evidence. While the company avoided a monetary fine by consenting to settle the FTC charges of false advertising, it faced the risk of paying up to $16,000 for each future violation.
Was there a way L’Oréal could avoid the FTC charges and the reputational damage that ensued? YES, this is how -
If the creative writing and communications team had consulted with the the legal team at L’Oréal, one can safely assume that they would’ve made a few observations on the following lines :-
- Interpretation of the clinical study undertaken : FTC noted that in this study - “Subjects were not asked to rate the magnitude of results achieved, but merely to indicate whether there was any improvement in a particular measure (e.g., the women were not asked how radiant or luminous their skin felt after using Génifique, but how strongly they agreed or disagreed that there was any improvement in their skin’s radiance or luminosity after using the product).” Later L’Oréal agreed that the representation and claims made in their story was clearly based on false deductions of this study. While assessing the clinical study in question any trained lawyer would point out the framework of interpretation of the conclusions.
- Repercussions of the “Boost genes” claim - The bar graph of the study accompanying this representation presented the results of a study that did not involve a L’Oréal Paris Youth Code product, or the ingredients in any such product. Fact checking every phrase would have made it clear that this would be an unsubstantiated claim and if made publicly as a blanket generalisation, it would have far reaching ramifications (as it eventually did)
- Lastly, the lawyers would have made a preliminary assessment of potential violations from this narrative and made a list of laws and penalties that could be imposed. For instance, it would be reasonable to assume retrospectively that the creative team would have gone back to the drawing board had they known of some of the laws they would be in violation of. For instance consider the two laws in question here - first, Section 5 of the FTC Act (15 USC 45) prohibits ‘‘unfair or deceptive acts or practices in or affecting commerce’’, and this prohibition applies to all persons engaged in commerce, including cosmetics and skincare companies. And second, Section 12 of the Federal Trade Commission Act declares the false advertisement of food, drugs, cosmetics or devices are deemed to be an unfair or deceptive act and, as such, a violation of law that the FTC is mandated to prevent.
The Law + Story Equation
The L’Oréal case is one of many such examples that are a perfect depiction of the damage that could’ve been prevented, had the seemingly unconnected departments - creative and legal, worked in tandem to amplify the power of storytelling. For the paucity of word limit in this post, we will discuss other noteworthy cases involving giants such as Volkswagen, Red bull, Stevia, Tesco and Olay in the coming newsletters. Closer to home, we will dedicate a post solely to the the law on misleading advertisement in India and discuss this concept of law + story in the context of the Supreme Court judgement in the Tata Press case and Delhi High Court judgements in the Horlicks case, Pepsi Co. case and the Dabur case.
Beyond the analysis of the established judgements of various courts across jurisdictions, there is the impending question of the new disruptors emerging in the tech clad online marketplace. It is evident that the rate of development of tech and its penetration across sectors is unmatched by the rate of development of the legislative framework to govern this complex terrain. Today it is not only important to tighten our grips on the narrative by reading into the existing laws, but also stay abreast of the developing body of laws on a global level to anticipate future ramifications and act accordingly.
The Law + Story equation involving two quintessential elements for any business - legal expertise and the need to develop a strong narrative through powerful storytelling, is not just for big established businesses. It is in-fact more important for those just starting out. In essence, it is the holy grail for any business looking to be sustainable and stay relevant for the long term. Through discussions about this intersection, The LOCSTALK Newsletter is determined to empower changemakers and be a repository of resources for their tech-enabled businesses, that intend to create a positive social or environmental impact.
In the next explainer we will discuss the concept of impact entrepreneurship, the definition of a changemaker and of course talk more about law + story.
Stay tuned for more talks by LOCS!
