The FTC’s action against Reebok, although seemingly extreme was justified, because Reebok’s claim that their “toning shoes could strengthen leg and buttock muscles” was not supported by sound science. Reebok was essentially tricking people into buying their shoes to generate revenue for their company; instead of providing a superior product justified by science, they were just using clever, sneaking marketing to make money.
Still, Reebok’s response of paying $25 million in customer refunds to settle charges was a smart move. It was a smart move because Reebok owns 42% of the market share in the industry for these shoes. With the 2010 market revenue being $1.1 billion, this means that Reebok alone... View More »