The Advertising Law Blog provides commentary and news on developing legal issues in advertising, promotional marketing, Internet, and privacy law. This blog is sponsored by the Advertising, Marketing & Promotions group at Olshan. The practice is geared to servicing the needs of the advertising, promotional marketing, and digital industries with a commitment to providing personal, efficient and effective legal service.
Influencer marketing, native advertising and online reviews have become popular marketing tools for many companies given the popularity of social media. To address consumer protection concerns relating to the use of such endorsements, the FTC has issued guidelines. With the popularity of social media and marketers’ reliance on this form of advertising, it is important that companies review and implement these guidelines into their online marketing. Notably, the guidelines require that endorsements reflect the honest opinion of the endorser, that the endorsements are not misleading, that the endorsements are not used to make a claim that the product’s marketer could not legally make, and that if there is a connection between an endorser and the marketer that consumers would not expect and would affect how consumers evaluate the endorsement, that connection should be disclosed.
Conference call outlines FTC efforts at bureaucratic reform
An online lingerie marketer has agreed to settle charges brought by the Federal Trade Commission (“FTC”), claiming that the company engaged in deceptive conduct when it enrolled consumers in a negative-option membership program without fully disclosing how the ongoing charges may be applied, in addition to making it difficult for those consumers to opt out of the program. The FTC charged the company’s subscription model and cancellation procedures violated Section 5 of the FTC Act and the Restore Online Shopper’s Confidence Act (“ROSCA”).
A recent decision highlights the risk in relying on confidential support, as well the difficulty in substantiating extraordinary cosmetic benefit claims. Benefit Cosmetics recently challenged Too Faced Cosmetics’ advertising before NAD. The challenge was focused on Too Faced’s mascara advertising claims relating to clinic studies, the degree to which the product increased eyelash volume, and the representations made in the advertiser’s use of “before” and “after” comparative photographic demonstrations.
Online review websites typically offer reviewers the ability to post their views anonymously. Given the lack of transparency, many times the subject business is unable to meaningfully address the allegations levied against it because it may not know the details of the reviewer’s experience. A recent Ninth Circuit decision, may portend a change in the ability to hide a reviewer’s identity.
Many marketers rely on advance consent auto-renewal programs, particularly for online subscription sign-ups. In the wake of the booming subscription-based business model and a rise in class action filings under state automatic renewal laws, many states are enacting or updating their laws to strengthen consumer protection. California’s recently enacted Senate Bill 313 enhances what was already one of the most stringent auto-renewal laws in the nation.
President Trump will nominate Washington lawyer Joseph Simon to chair the Federal Trade Commission, replacing acting chair Maureen Ohlhausen.
Legislation enhancing law enforcement efforts and increasing penalties for crimes targeted at America’s senior citizens now awaits President Trump’s signature after passing the House of Representatives earlier this month and the Senate in early August 2017.
Andrew Lustigman Is the featured legal source of the Racked article "Brands Want Students to Sell to Each Other"
Digital Business Lawyer Publishes Article by Andy Lustigman on the FTC’s COPPA Compliance Update