FTC’s warning letters ripple though lab-grown industry

Rob Bates

The Federal Trade Commission’s (FTC) warning letters to eight companies that sell man-made diamonds and diamond simulants have clearly made an impact on that business.

One lab-grown seller told me that, after the news broke, he took a thorough look at all his communications. And even though his company was always extremely careful, it still changed a few things, out of prudence.

But that isn’t bad, he said. He found it a worthwhile exercise. Companies should hold themselves to high standards.

I checked another lab-grown e-tailer whose Facebook ads don’t seem to have much disclosure. Now—voilà—it’s been beefed up. Others still lag behind, which is perplexing, given that the FTC is clearly interested in this issuePlus, if lab-grown diamonds are as popular as we keep hearing, why wouldn’t a seller tout their origin in its advertising?

None of this should have been a surprise. These issues—particularly regarding simulants—have been around for years. Some companies have been warned repeatedly about their lack of disclosure.

I’ve heard lab-grown sellers grumble that the FTC’s actions must have been spurred by pressure from big mining companies. There were similar conspiratorial murmurs from the

This is a misunderstanding of what the FTC’s role should be. It’s supposed to weigh the evidence, then decide. Clearly, its decisions—particularly on controversial issues—won’t always be popular. But, ideally, it shouldn’t be seen as favoring one side, or sector, over another. (I would also argue that there shouldn’t be “sides” here, and that’s part of the problem.)

You may not always agree with the FTC’s decisions or methods. I don’t. The actions and rulings of government agencies are fair game for criticism.

For instance, lab-grown seller Ada told me that it received an FTC warning letter for using the word cultured accompanied by #labdiamonds in three Instagram posts. That doesn’t seem likely to fail the “net impression” test. I’ve found Ada clear in its communications.

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Source JCK Online