A Utah-based nasal spray company wants to continue promoting one of its products as a prevention for diseases like COVID-19, but the FTC Act — the rule that regulates against “unfair or deceptive acts” in business — does not allow businesses to make such claims without substantial proof.
And while Xlear thinks it has such evidence, they now want to remove the burden altogether. So it is suing the federal government.
It is a new chapter in a four-year legal battle between Xlear and the Federal Trade Commission that appeared to come to an end earlier this year.
Xlear is asking a federal judge to declare that the FTC Act does not include any requirement for companies to substantiate their marketing claims. The rule does not explicitly require substantiation, Xlear argues, and so the agency should not, either.
“I think the FTC is harming Americans,” said Xlear CEO Nathan Jones. “But it’s also stifling innovation. ... it’s harmful to innovation and industry, which is what American culture was built on.”
But Sam Levine, who led the FTC’s Consumer Protection Bureau when the original suit against Xlear was filed, told The Salt Lake Tribune in April that the federal law exists to level the playing field for businesses and consumers. A free and fair market, Levine said, only works if consumers can trust companies’ claims.
“If we have a world where people can say anything they want and not be held accountable, that’s a very worrying development for the marketplace,” Levine said when the FTC’s original lawsuit was dismissed in April. “It’s a worrying development for consumer protection.”
Xlear’s new case, if successful, could “sharply diminish the FTC’s power” to regulate marketing claims and “reshape rules for an entire industry,” said Guillermo Meneses, a spokesperson for the company.
The FTC declined to comment on the new lawsuit.
(Bethany Baker | The Salt Lake Tribune) Xlear CEO Nate Jones poses for a portrait at Xlear, Inc. in American Fork on Wednesday, April 16, 2025.
The FTC sued Xlear in 2021 for claiming its xylitol nasal spray could help treat or prevent COVID-19. The claims, the FTC argued, were not supported by real evidence and were therefore misleading.
Xlear argued all along that the claims were, in fact, based in science. Several studies supported its claims, the company said. The fact that those studies did not meet the FTC’s onerous standards did not mean they were not real. If anything, it was a sign of market censorship, Jones said.
The federal government abruptly dismissed the case in April. It cannot be refiled.
But the damage was done, and persists, Xlear claims in its new lawsuit. Xlear spent “millions of dollars” defending itself in court, said attorney Rob Housman. And now, it cannot say things Jones says he knows to be true for fear of retaliation.
“That’s the ongoing harm,” Housman said. “It’s a chilling effect on the company’s speech.”
The complaint, filed Wednesday afternoon, alleges requiring a company to substantiate its claims amounts to federal overreach, especially under Loper — the 2024 Supreme Court case that overturned the Chevron deference doctrine. The change gives judges the authority to overrule a federal agency’s interpretation of an ambiguous or broad statute.
Xlear’s is the first major legal challenge to a federal agency since Loper, according to Meneses.
The FTC statute, though, is broad on purpose, Levine told The Tribune in April. It is written so that it can respond to “emerging forms of fraud and deception.”
And the standard for medical claims is especially high because claiming a product can prevent, treat or cure a potentially deadly disease without “competent, reliable evidence” could cause greater harm, he said.
Jones and Housman, though, want the burden of proof to fall on the FTC. Rather than companies having to prove their statements are true, “you’ve got to prove that what I said was untrue,” Housman said.
Shannon Sollitt is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.
