Markets Wired

The marketers of two app-supported smartphone accessories, marketed to accurately measure consumers’ blood alcohol content (BAC), have agreed to settle Federal Trade Commission charges that they lacked scientific evidence to back up their advertising claims.

Under the terms of the FTC settlement, defendants Breathometer, Inc., and the company’s founder and chief executive officer Charles Michael Yim, are barred from making future accuracy claims for a consumer breathalyzer product unless such claims are supported by rigorous testing. The defendants also are required to notify and pay full refunds to consumers who bought their devices.

“People relied on the defendant’s products to decide whether it was safe to get behind the wheel,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Overstating the accuracy of the devices was deceptive — and dangerous.”

According to the FTC’s complaint, Mr. Yim obtained initial financing for his breathalyzer product by successfully pitching it to the investors on the television show “Shark Tank.”  The defendants sold two versions of the Breathometer – Original and Breeze. Ads for both products claimed that their accuracy was proven by “government-lab grade testing.”  

Ads for Breeze further claimed that it was a “law-enforcement grade product.”  In truth, neither Original nor Breeze were adequately tested for accuracy, the FTC alleged. Further, the FTC charged that the defendants were aware that Breeze regularly understated BAC levels. Nonetheless, they allegedly failed to notify users of these problems and continued their deceptive advertising.

As detailed in the complaint, Original is a small device that attaches to a smartphone through the audio jack. Sold on the defendants’ website, as well as through other online retailers such as Amazon.com, BestBuy.com, and Brookstone, Original typically retailed for $49.99. Breeze is a small Bluetooth-enabled device, sold through the same retailers, typically for $99.99. To use either device, consumers would download the free Breathometer app to their phone and blow into the device. Within five seconds, a purported BAC level would be displayed on the consumer’s phone.

According to the complaint, sales of Original and Breeze totaled $5.1 million. The order requires the company to pay full refunds to consumers who request them. The refund claim forms will soon be available online at www.breathometer.com.

The Commission vote authorizing the staff to file the complaint and stipulated order was 3-0, with Commissioner Maureen K. Ohlhausen issuing a concurring statement. The FTC filed the complaint and order in the U.S. District Court for the Northern District of California.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.

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