• Posts by Andrew B. Lustigman
    Andrew B. Lustigman
    Partner

    Marketers, advertisers, agencies and suppliers, among others, regularly seek Andy’s counsel regarding legal aspects of their advertising and promotional marketing businesses. He’s pragmatic and always looks for ...

Olshan Frome Wolosky LLP has been recognized by The Legal 500 US in its 2024 edition as a Leading Law Firm. The Advertising Practice has again been ranked along with three attorneys. The Shareholder Activism Practice has again been ranked as a Tier One practice, a position it has held since the rankings’ inception, including six of the practice’s attorneys. The rankings are based on feedback from clients, peers and The Legal 500’s independent research.

Without waiting for new federal laws or federal regulators to take action against drip pricing, California is once again leading the way by enacting “Hidden Fee Statute” SB 478, which prohibits businesses from advertising or listing a price for a good or service that does not include all required fees or charges other than certain taxes (such as sales tax) and shipping costs. While this law applies to California sales, given the borderless nature of ecommerce, the mandatory pricing disclosure law will likely impact many businesses, particularly those that use the internet for sales.

The failure to comply with National Advertising Division (“NAD”) review processes typically results in a referral to the Federal Trade Commission (“FTC”). This strong enforcement deterrent results in a reported 97% compliance rate with NAD decisions. Recently, NAD has been expanding the agencies to which it refers advertisers that have failed to comply with its rulings or participate in its processes. As discussed below, NAD recently referred the advertising claims of a crisis pregnancy center to the Massachusetts Attorney General for possible enforcement action. In addition, NAD has developed a referral relationship with leading social media platforms, such as Meta, resulting in prompt enforcement of NAD’s recommendations.

I recently had the privilege of co-presenting on legal issues involving “green” claims at ACI’s 2024 Food Regulation Conference. A notable developing trend that was discussed during our panel is the increasing scrutiny of aspirational environmental benefit claims, such as a pledge to be carbon free by 2050. 

Olshan’s Advertising, Marketing & Promotions Group was named a leading Tier 1 law firm by Media Law International. MLI’s 2024 ranking guide, covering firms and practitioners with media law experience across 60 jurisdictions globally, recognized Olshan for its excellence. Employing a multidisciplinary approach, Olshan integrates Brand Management & Protection and Advertising lawyers to offer knowledgeable, solutions-focused advice. View the rankings and editorial in MLI’s 2024 guide.

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group, will speak on the panel “What It Really Means to be ‘Green’ in 2024: Mastering the Intricacies of Making and Substantiating Green Claims in Today’s Regulatory Landscape” as part of ACI’s 8th Annual Summit on Food Law – Regulation, Compliance and Litigation on May 1, 2024, at 1:15 p.m. at The Metropolitan Club, Chicago, IL. The panel will explore the new proposed changes to the Green Guides and the impact that FTC’s contemplated rulemaking could have on environmental marketing claims, differences in the FTC’s guidance and state law requirements for the term “recyclable,” how to manage the risks associated with vendors making claims about your products and green claim trends that are vulnerable to class-action activity.

You can register for the Summit here.

The war on drip pricing continues. New York’s new credit surcharge law is now in effect requiring businesses to provide important pricing disclosures. The law amends and clarifies New York’s existing credit card surcharge law, General Business Law Section 518. Key requirements are outlined below.

Chair of the firm's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group Andrew Lustigman will speak on the panel “Shining a Light on ‘Dark Patterns’: What All Companies Must Know About this Rising Area of FTC Advertising Enforcement” as part of ACI’s 7th Annual Legal, Regulatory, and Compliance Forum on Advertising Claims Substantiation on February 9, 2024, at 9:45 a.m. The panel will explore how the Federal Trade Commission (FTC) and other enforcers are rapidly increasing their focus on “dark patterns” in advertisement designs, which are practices that regulators believe can trick or manipulate consumers into buying products or giving up their privacy. In addition, the Commission also just released a new proposed rule governing subscription offerings/negative options. Topics to be considered will include: specific website design and advertising practices that are currently triggering enforcement activity; the types of allegations being brought by the FTC in cases where dark advertising patterns are alleged; how companies can avoid being the next target in this rising wave of deceptive advertising enforcement; restoring your product’s reputation after it falls prey to a dark pattern; and the FTC’s latest amendments to the rules governing subscription offerings/negative options and junk fees.

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group, and associate Morgan Spina published an article in New York Law Journal entitled “Regulation of Automatic Renewals Remains Key Issue for Lawmakers.” In the article, Andy and Morgan discuss the revision of statutes surrounding subscription renewal fees, specifically those that are relevant to the cancellation of automatic renewals.

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group, published an article in Bloomberg Law entitled “New Laws, Consumer Actions Will Help Us Say Goodbye to Junk Fees.” In the article, Andy discusses the increasing significance of surcharges and undisclosed fees impacting consumer purchasing decisions.

Both federal and state legislators and regulators continue to focus on auto-renewal/continuous service programs, particularly emphasizing the necessity of online cancellation for orders initiated via the Internet. In March 2023, the FTC aimed to modernize its “negative option rule,” aligning it with state laws and increasingly common continuity programs. The proposed FTC Rule Concerning Recurring Subscriptions and Other Negative Option Plans would mandate  disclosure of continuity program terms and cancellation processes before acquiring a consumer's billing ...

Public comments to the FTC now extended until February 7, 2024

Chair of Olshan’s Intellectual Property Law Group and Co-Chair of the firm’s Brand Management & Protection Group Mary Grieco and Olshan Co-Managing partner, Chair of the firm's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group Andrew Lustigman published a Law360 (subscription required) article entitled “Open Issues At The USPTO And Beyond After Biden AI Order” In the article, they discuss how President Biden’s Executive Order relating to AI could potentially make it harder for businesses to protect AI-created inventions.

Chair of Olshan’s Intellectual Property Law Group and Co-Chair of the firm’s Brand Management & Protection Group Mary Grieco and Olshan Co-Managing partner, Chair of the firm's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group Andrew Lustigman published a New York Law Journal (subscription required) guest column entitled “Will Biden’s AI Executive Order Give Clarity on the Issue of Inventorship?” concerning President Biden's AI Executive Order and how AI output will be categorized as intellectual property.

It has been de rigueur to void Québec when offering a sweepstakes to Canadian residents due to its historically onerous registration requirements. While Québec still has strong language requirements, and Canada prohibits pure chance promotions, the Province of Québec will no longer require registration of publicity contests with the Régie des alcools, des courses et des jeux (the “Régie”).

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group, was quoted in a Corporate Counsel article (subscription required) on the ruling by the U.S. Court of Appeals for the Fifth Circuit that the Biden administration had likely violated the First Amendment for “coercing” social media platforms to take down “disfavored” content from their sites that it deemed to be misinformation about topics such as COVID-19 or the 2020 elections.

Andrew Lustigman, Chair of Olshan’s Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group, and associate Morgan Spina will present a webinar on myLawCLE entitled “The Nuts and Bolts of Structuring and Promoting a Lawful Sweepstakes,” on September 27, 2023, from 3-4 p.m. (EST). In this CLE webinar, Andy and Morgan provide an introduction to sweepstakes law, covering the key legal areas of concern that arise in structuring a sweepstakes, including lottery law and gambling concerns and how to address them. Topics they will discuss include why bespoke rules are important and key provisions that should be incorporated when preparing a sweepstakes, as well as how to promote a sweepstakes on Instagram, Tik Tok and other social media platforms.

You can register for this CLE webinar here.

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group, and Jeremy King, Chair of Olshan’s Insurance Coverage Practice, published an article in Bloomberg Law (subscription required) entitled “Social Media Influencers Must Weigh Liability Insurance Options.” In the article, the authors warn that certain promotional behaviors undertaken by social media influencers could potentially expose brands to legal liabilities. Accordingly, many brands require influencers to purchase ...

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group, will serve as co-moderator on the panel “Distinct Politics –Politicians Using Music, Names, Signs and Logos” as part of the International Bar Association’s 2023 Annual Conference in Paris from October 29 – November 3, 2023, the leading conference for legal professionals worldwide to meet, share knowledge, build contacts and develop business. The panel will address how political parties and politicians distinguish ...

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group, published an article in Bloomberg Law (subscription required) on how the launch of the new social media app Threads may feature some of the same pitfalls for brands, though it means to offer a “less toxic” alternative to Twitter. Accordingly, it is incumbent upon brands to remain hyper-cognizant of the spaces in which they advertise, including on this new platform from Facebook parent company Meta. “By combining the interactivity ...

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group, will speak on the panel “Food Marketing, Advertising and Promotion Essentials: Ensuring Claims Compliancy and Meeting Substantiation Standards Relative to Health, Nutrition, Structure and Function” as part of ACI’s Food Law and Regulation Boot Camp virtual conference on July 19, 2023, at 1:45pm (CT). The panel will explore the relationship between food product labels and advertising and promotion, how to distinguish ...

The Federal Trade Commission (“FTC”) has filed a complaint against Amazon.com, Inc. (“Amazon”), asserting that the online retail giant “knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service.” Specifically, the FTC alleges that Amazon has used “dark patterns” to trick consumers into enrolling in automatically-renewing Prime subscriptions, and made it incredibly difficult for consumers to cancel those subscriptions.

The complaint, filed in the District Court for the Western District of Washington on June 21, 2023, is ...

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotions Group and Co-Chair of the firm's Brand Management & Protection Group, will be presenting at the webinar "Stand By Your Word - Global Marketing and Sales Regulation 2023" on June 26th. The webinar is sponsored by the Association of Corporate Counsel Israel, Barnea Jaffa Lande, and Olshan Frome Wolosky LLP. Andy will discuss Extraterritoriality and US Enforcement of Advertising and Marketing Laws. Reserve your spot here.

Olshan partner Andrew Lustigman, Chair of the firm's Advertising, Marketing, and Promotion's Practice and Co-Chair of the Brand Management & Protection Practice, and associate Morgan Spina published an article on April 21 in Sports Litigation Alert (subscription required) focusing on how services such as MLB's Apple TV+ arrangement must adhere to compliance obligations in a rapidly changing regulatory environment.

On April 13, 2023, the Federal Trade Commission (FTC) issued Notices of Penalty Offenses (NPOs) to approximately 670 companies in order to ensure that the companies are aware of the FTC’s standards for product claim substantiation. The Notices were sent to companies marketing over-the-counter drugs, homeopathic products, dietary supplements, and functional foods.

FTC’s Proposed New Rules for Businesses Selling Subscriptions Heighten Compliance Obligations, published in The New York Law Journal

The National Advertising Division’s (“NAD”) streamlined Fast-Track SWIFT (Single Well-Defined Issue Fast Track) process is an expedited process by which single-issue truth in advertising claims in national advertising may be reviewed and assessed. The popularity of SWIFT challenges, which are structured to resolve designated challenges expeditiously, has been continuing to grow as competitors take advantage of the streamlined process.

The Federal Trade Commission (“FTC”) has been interested in pursuing amendments to the Negative Option Rule for several years. In 2019, the FTC published an Advance Notice of Proposed Rulemaking (“ANPR”), soliciting public comment on certain issues related to negative options and automatic renewal contracts, including disclosures, consent, and cancellation. Following receipt of such comments, the FTC issued an Enforcement Policy Statement Regarding Negative Option Marketing in 2021. Now, in its latest and potentially most impactful effort, the FTC has issued a Notice of Proposed Rulemaking (“NPRM”), proposing several specific changes to the Negative Option Rule, as the existing rule was woefully out of date.

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group, will speak on the panel “Evolution of Food Advertising and Marketing: From Print Ads to Social Media to the Metaverse” as part of ACI’s 7th Annual Summit on Food Law – Regulation, Compliance and Litigation on April 19, 2023, at 10:30am at The Metropolitan Club, Chicago, IL.

Happy New Year! As we begin 2023, Olshan’s Advertising and Branding law groups share their list of hot topics that look to be on the horizon this year and should be of particular interest to you.  

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group, was quoted in Law360 (subscription required) on the Federal Trade Commission’s (“FTC”) consumer protection rulemaking and enforcement efforts in 2023. The agency’s focus on pricing disclosures—specifically its October 2022 proposed rulemaking on addressing “junk fees,” unnecessary, unavoidable, or surprise charges that inflate costs while adding little to no value to consumers—will potentially affect “a wide array of industries,” Andy commented. “Similar rulemaking has been proposed by the U.S. Department of Transportation relating to airline pricing and ancillaries like baggage fees,” he added. Additionally, the FTC is expected to continue focusing on advertisers’ use of endorsements and testimonials that consumers increasingly rely on in digital commerce.

Rihanna’s lingerie company, Lavender Lingerie, LLC dba Savage X Fenty (“Savage X Fenty”), has agreed to pay $1.2 million to settle a consumer protection lawsuit brought by members of the California Automatic Renewal Task Force (“CART”) relating to the company’s automatic renewal practices.   

On October 20, 2022, the Federal Trade Commission issued an advance notice of proposed rulemaking for a rule that would seek to address so called “junk fees” – unnecessary, unavoidable, or surprise charges that inflate costs while adding little to no value to consumers.

* Rachel Gold is a law clerk in the Corporate/Securities Law practice group.

Following up on its action against other celebrities who have promoted crypto investments without disclosing their compensation interest, the Securities and Exchange Commissions (“SEC”) announced “unlawful touting” charges and Order against reality star Kim Kardashian for promoting a cryptocurrency on social media without acknowledging that she was being compensated for the post. This enforcement action is a reminder that it is not just the Federal Trade Commission (“FTC”) who is enforcing compensation disclosures on social media.

The Federal Trade Commission (“FTC”), along with six states, filed a lawsuit against housing rental listing platform, Roomster Corp. (“Roomster”), its co-founders, John Shriber and Roman Zaks, and the principal of a related app that provided allegedly fake reviews, Jonathan Martinez. The lawsuit, filed in the Southern District of New York, alleges that the defendants used fake reviews to entice consumers to join and pay for access to its platform. The lawsuit is a reminder that federal and state regulators are increasingly focused on the legitimacy of consumer reviews, particularly given their impact on purchasing decisions.  

Sweepstakes entrants’ lack of knowledge of free method of entry insufficient to constitute violation of California Penal Code.

A Northern District of California case styled Suski v. Marden-Kane, Inc. (decided August 31, 2022) has resulted in a significant ruling in the field of sweepstakes law. A sweepstakes sponsored by Coinbase, a popular cryptocurrency exchange, and administered by Marden-Kane offered the chance to win valuable prizes to Coinbase users who bought or sold Dogecoin, a well-known “meme” token, on Coinbase for a total of $100 or more. The sweepstakes offered an alternative method of entry that did not require the trading of Dogecoin or incurrence by the entrants of any other expense. However, this free alternative method of entry was not well-publicized.

The Federal Trade Commission (“FTC”) is set to issue updates to both its Endorsement Guides and .com Disclosure Guidance. The proposed updates to both guidance documents signifies the FTC’s ongoing attention to online and social media advertising, as the regulator takes steps to bring its guidance into focus with contemporary advertising issues.

On July 1, 2022, California Assembly Bill 390 will take effect, adding new notice and cancellation requirements to California’s existing Automatic Renewal Law (“ARL”). 

Andrew Lustigman, Chair of the firm's Advertising, Marketing and Promotion's Group and Co-Chair of Brand Management & Protection Group, will speak on the panel “Rethinking the Role of Loyalty Programs: Considerations for Food Manufacturers” as part of ACI’s Food Law Conference.

Defendants plagued by failure to include arbitration clause in sweepstakes rules

A class-action lawsuit against an online sweepstakes operator will go forward despite the plaintiffs’ admitted agreement to an arbitration clause. The sweepstakes offered the chance to win $1.2 million in Dogecoin, a type of cryptocurrency. The plaintiffs in the Northern District of California district court action, styled Suski v. Marden-Kane et al., initially agreed to arbitrate all disputes at the time they opened their online accounts with defendant Coinbase Global, Inc.

On May 12, 2022, Andrew Lustigman, Chair of the firm’s Advertising, Marketing & Promotion’s Group and Co-Chair of Brand Management & Protection Group and associate Morgan Spina will present at the Federal Bar Association webinar “Suppressing Negative Reviews Can Lead to Legal Trouble.”

FTC's recent actions regarding earnings claims makes clear that the agency is focused on challenging earnings claims, particularly those that are atypical.

Weight-loss app Noom has agreed to make substantial changes to its enrollment processes and pay $56 million, in addition to providing $6 million in subscription credits, in order to resolve a federal court case where the plaintiffs alleged that the company utilized deceptive automatic renewal tactics.

Olshan’s Advertising, Marketing & Promotions practice group has been named a Tier 2 firm as part of the 2022 release of Media Law International.

Fashion retailer agrees to $4.2 million settlement with the FTC and the issuance of guidance regarding consumer reviews

The current global supply chain delays has impacted many aspects of our lives.

Andrew Lustigman, Chair of the firm's Advertising, Marketing and Promotion's Group and Co-Chair of Brand Management & Protection Group, was quoted in Law360 (subscription required).

Happy holidays! We hope you are safe and healthy. As we enter the new year, Olshan’s Advertising and Branding law groups shares their list of hot topics that look to be on the horizon for 2022. If you have any questions on these or other issues, please reach out to us. 

Andrew Lustigman,  Chair of the firm's Advertising, Marketing and Promotion's Group and Co-Chair of Brand Management & Protection Group, and associate Morgan Spina will speak on a virtual panel entitled “Advertising, Sweepstakes, Promotions and Competitions Workshop” hosted by LAWorld.

Olshan attorneys Andrew LustigmanMary Grieco and Morgan Spina will present a webinar entitled The Legal Side of the Digital Marketing World hosted by the Social Media Association.

The New York Law Journal published an Expert Opinion article authored by attorneys Andrew Lustigman and Scott Shaffer, entitled “Are College Athletes the Next Fashion Stars?”. 

While many marketers of CBD products label such products as “dietary supplements,” the FDA has made clear that it rejects the designation under the current regulatory standards.  The FDA’s recent pronouncement is consistent with its previously stated position that such products may not be marketed as dietary supplements because of a drug approval for the ingredient.

The self-regulatory body that oversees advertising aimed at children, the Better Business Bureau (“BBB”) National Programs’ Children’s Advertising Review Unit (“CARU”), has issued revised CARU Advertising Guidelines (the “Revised Guidelines”). The Revised Guidelines state that advertisers recognize that children have limited knowledge and sophistication, and as such their ability to evaluate the credibility of advertising is limited. It is within this context that the Revised Guidelines seek to ensure that advertising directed to children is not deceptive or inappropriate. The Revised Guidelines apply to advertising content targeting children under the age of 13.

On July 9, 2021, the Colorado Governor signed Colorado House Bill No. 1239 into law, resulting in Colorado becoming the latest state to enact new automatic renewal and cancellation procedures applicable to consumer sales contracts. In addition to addressing general automatic renewal contracts, the new Colorado law establishes certain requirements regarding the execution and enforcement of dating service contracts.

An overwhelming number of US/Canada international sweepstakes promotions typically void the Canadian province of Quebec, resulting in Quebec residents being ineligible to participate. The province is typically voided because of a French translation requirement and a novel registration and tax regime based on prize value with the Regie des alcools, des courses et des jeux (the “Régie”). In an effort to expand sweepstakes offerings to this highly populated Canadian province, it has been reported that Quebec recently changed its promotion registration and tax requirements, making it easier to run international promotions open to Quebec residents.

Dark patterns, an increasingly popular ecommerce marketing technique, seek to encourage users to make a particular purchasing decision.  They are also the subject of increasing regulatory scrutiny, including the FTC’s ABC Mouse enforcement action.

Andrew Lustigman, head of Olshan’s Advertising, Marketing & Promotions Practice Group, was interviewed on Round Table Group’s Engaging Experts podcast in an episode entitled “How to Effectively Deal With False Advertising Disputes.” The episode explores various options for responding to false advertising claims and examines the variety of directions a business can take regarding an advertising dispute. Topics include how lawsuits concerning false representations have been filed under the Lanham Act, the founding of the National Advertising Division (NAD), strategies in a well-constructed cease and desist letter, and more.

The change in the Presidential administrations also brings a change at the Commissioner and senior staffing levels at the Federal Trade Commission (FTC), as well as other agencies.

Olshan Advertising attorneys Andrew LustigmanScott Shaffer, Mary Grieco and Morgan Spina presented a webinar for the Consumer Protection Monthly Update hosted by the American Bar Association Antitrust Law Section.

Olshan’s Advertising, Marketing & Promotions Practice Group chair Andrew Lustigman and associate Morgan Spina have authored an article published in NYSBA Inside entitled “Check Your Enrollment Path: New York Enacts Comprehensive Automatic Renewal Law.”

Andrew Lustigman, head of Olshan’s Advertising, Marketing & Promotions Practice Group, was quoted in Law360 on major upcoming U.S. Supreme Court fights concerning consumer protection, namely, the Federal Trade Commission’s (FTC) ability to seek monetary restitution for bad marketplace behavior under Section 13(b) of the Federal Trade Commission Act. Specifically, the Court’s arguments scheduled for January 13 in AMG Capital Management LLC et al. v. FTC challenge allegations that payday loan companies engaged in predatory loan practices. Mr. Lustigman described disgorgement as an “enormous hammer” for the FTC, as a monetary fine equal to sales of a targeted product neglects to take into account a company's other expenses, like taxes and advertising. "There's no setoff," he explained. "They're saying you have to give up everything you took in."

Olshan Advertising partners Andrew Lustigman and Scott Shaffer, along with Olshan Intellectual Property partner Mary Grieco—all of whom are members of Olshan’s Brand Management & Protection Practice Group—will present a webinar entitled “Marketing in the COVID-19 Era” for the Bronx Third Avenue Business Improvement District on December 16 at 9am. Areas to be covered include ecommerce marketing, advertising claims, social media marketing, and data privacy, followed by a Q&A.

The Legal 500 published a Q&A authored by attorneys Andrew Lustigman and Morgan Spina, entitled “United States: Pharmaceutical Advertising”

The client alert addresses how New York has now joined other states with some of the most burdensome automatic renewal laws, enacting a sweeping law that regulates automatic renewal disclosures and cancellation procedures.

Olshan’s Advertising, Marketing & Promotions Practice is providing pro bono legal support on a sweepstakes run by In Good Taste, a fundraising initiative whose goal is to help ease the suffering caused by COVID-19 and racial inequality.

Our fast-moving webinar discussed key issues involving marketing and business practices in the current environment.

Online children’s education company Age of Learning, Inc., also doing business as ABCmouse, has agreed to pay $10 million to settle the FTC’s charges that it made it difficult and confusing for subscribers to cancel their memberships.  The settlement highlights the importance of a compliant subscription enrollment pathway, including readily-accessible cancellation processes.  It also highlights a growing focus by regulators and others on “dark patterns” online marketing techniques.

As we have previously reported, like other regulators, the FTC has been quick to take action against companies that it believes are seeking to take advantage of the coronavirus pandemic. The FTC has sent warning letters to approximately 300 companies that it has alleged were making unsubstantiated or potentially misleading claims about products related to the coronavirus. Recently, the FTC has taken decisive action against a company to which it has previously sent a warning letter, alleging that such company has continued to make deceptive and misleading advertising claims in spite of the FTC’s warning.

The importance of timely delivery remains a top priority, particularly when making enhanced delivery promises. In light of the impact of the COVID-19 pandemic, the FTC has filed complaints against three online merchandisers it believes have failed to deliver on quick shipping promises in contravention of the FTC’s Mail, Internet and Telephone Order Rule, commonly known as the Mail Order Sales Rule.

In the context of the coronavirus pandemic, many companies have turned to online sweepstakes and promotions as a means of both promoting their brand and showing support to coronavirus relief efforts. Certainly, sweepstakes and promotions can be an effective way to achieve these dual purposes.   As we previously reported, brands that have hastily run promotions without thinking through the consequences of various events have run into a firestorm of negative publicity as well as potential class actions.  Making sure that the promotion incorporates the items below can help ensure that a promotion is legal, properly structured, and contains appropriate protections for the brand.

Andrew Lustigman, head of Olshan’s Advertising, Marketing & Promotions Practice Group, was featured in a Companies Digest article comprising assessments by leading business law attorneys.

The New York Law Journal published an Expert Opinion article authored by attorneys Andrew Lustigman and Morgan Spina, entitled “Avoiding Viral Fashion Promotion Malfunctions.”

Andrew Lustigman, head of Olshan’s Advertising, Marketing & Promotions Practice Group, was quoted in The Legal Examiner on the recent class action lawsuit filed against TikTok by a group of parents who are suing the social media app under allegations that it illegally collects and shares identification information to send to China.

Andrew Lustigman, head of Olshan’s Advertising, Marketing & Promotions Practice Group, was quoted in AdAge (subscription required) regarding the impending ban that may happen to TikTok and how it would affect the brands that use the platform to publish its advertisements.

Olshan Advertising & Marketing attorneys have authored a comprehensive Q&A, published by The Legal 500, which can be used as a general key to the legal framework and issues that surround the pharmaceutical advertising law in the United States. The attorneys that contributed to this Q&A include the Chair of Advertising, Marketing and Promotions Group Andrew Lustigman and attorneys, Safia Anand, and Morgan Spina

Click here for The Legal 500: Pharmaceutical Advertising Comparative Guide:United States: Pharmaceutical Advertising Q&A

Olshan’s Advertising, Marketing & Promotions Practice Group chair Andrew Lustigman spoke at a virtual event held on July 17 for American Conference Institute’s (ACI) Food Advertising & Marketing Law Master Symposium. Entitled “Clarifying the Role of Influencers/Virtual Influencers in the Food Industry,” Mr. Lustigman’s session explored implementing practical best practices for engaging with influencers and how to effectively audit what they say, contracting with influencers (and knowing when a contract is not enough), the legal challenges the food industry faces when working with virtual influencers, and understanding why what an influencer says is not considered a testimonial.

Advertising, Marketing & Promotions practice chair Andrew Lustigman, Intellectual Property/Privacy partner Mary Grieco, AMP partner Scott Shaffer, and associate Morgan Spina authored four Guidance Notes on direct marketing in California recently published in the prestigious OneTrust DataGuidance (subscription required). The first, entitled “California – Emarketing,” covers both the state and federal legislation, as well as regulatory guidance from the Federal Trade Commission, concerning emarketing. In the second, “California – Telemarketing,” the authors examine the numerous pieces of state and federal legislation governing telemarketing, including the “Automatic Dialing Law” and the “Unwanted Calls Law.” The third, entitled “California – SMS/MMS Marketing,” discusses various state and federal laws on SMS/MMS, including the Telephone Consumer Protection Act, and the consent requirements that advertisers must follow when using these services. In the fourth, “California – Postal Marketing,” the authors explore various state and federal laws on postal marketing, such as California’s “Mail Solicitation Law” and the federal “Deceptive Mail Act.”

To expedite advertising challenges on discrete issues, the National Advertising Division (NAD) of the Better Business Bureau has launched a new fast-track process.  The new process will resolve eligible matters within 20 business days from initiation of the challenge.

Andrew Lustigman, head of Olshan’s Advertising, Marketing & Promotions Practice Group, was quoted in a Bloomberg Law article on the coordinated attack on coronavirus scams led by The Justice Department (“DOJ”), the Federal Trade Commission (“FTC”), and the Food and Drug Administration (“FDA”). All three agencies have filed charges against and have sent warning letters to people and companies for advertising unapproved COVID-19 treatments or preventatives. Given the import that these efforts have to public health during the pandemic, the agencies’ attention is intensely focused on preventing coronavirus fraud, so while the DOJ is investigating a wide range of fraudulent activity, the FTC and the FDA are evaluating false claims about treatments and cures. “That intensity is shown by how quickly the agencies are taking cases to court and asking for orders to stop the fraudsters,” said Mr. Lustigman. Wasting no time, the DOJ has filed at least four civil lawsuits against people allegedly selling fraudulent cures/treatments, obtaining temporary restraining orders against three of the defendants. The FTC and FDA, meanwhile, have sent warning letters both to sellers of unapproved treatments and to multi-level marketing companies for unsubstantiated claims made by their independent distributors.

Online fast fashion retailer, Fashion Nova, has agreed to pay $9.3 million to settle FTC charges that it failed to properly notify consumers and give them a chance to cancel their orders that were not shipped in a timely manner. The FTC also alleged that Fashion Nova used gift cards to compensate consumers for unshipped merchandise instead of providing refunds, as required. 

The FTC has reached a settlement with Teami, LLC (“Teami”), a tea and skincare company that allegedly used deceptive health claims and a bevy of undisclosed social media influencer endorsements to promote its products. This settlement, comprised in part of a significant monetary judgment, comes on the heels of the FTC seeking public comment on its Endorsement Guides in light of the changing social media advertising landscape. The FTC’s recent policy and enforcement actions seem focused on online influencer advertising campaigns.

In 2017, California-based clothing company, Sunny Co. Clothing, posted a photo to its Instagram account displaying a model wearing Sunny Co. Clothing’s “Pamela” red, full-piece bathing suit. The caption stated that every person who reposts the image tagging Sunny Co. Clothing “will receive a FREE Pamela Sunny Suit.” Sunny Co. Clothing failed to set a maximum on the number of swimsuits available for the promotion. The post quickly went viral and Sunny Co. Clothing found itself in the undesirable position of not being able to fulfil its promotional obligations as it simply did not have enough swimsuits to meet the demand. Sunny Co. Clothing publicly learned the importance of having complete and conspicuously disclosed contest rules for social media giveaways. Reese Witherspoon’s fashion label, Draper James, is now learning the same lesson several years later.

Advertising, Marketing & Promotions partner Andrew Lustigman, Intellectual Property partner Mary Grieco and associate Morgan Spina authored a chapter entitled, “USA – Cookies & Similar Technologies” in a recent publication included in the prestigious OneTrust DataGuidance (subscription required).  The chapter covers the current laws and information regarding the use of cookies and third parties on the Internet. 

Vermont, which already has one of the most unique automatic renewal laws on the books, has further increased the compliance obligations for sellers utilizing continuity arrangements. On March 5, 2020, Governor Phil Scott signed Vermont Senate Bill 110 into effect. This new law primarily tackles issues surrounding privacy, but also updates Vermont’s automatic renewal provisions to bring cancellation of consumer contracts in line with California’s online requirements. The law goes into effect on July 1, 2020.

The FDA and FTC have issued joint warning letters to companies selling products that they claim are able to treat or prevent coronavirus. The regulators sent the first set of such warning letters to several companies on March 6, 2020 and have continued to send such warning letters since.

FTC Chairman Joe Simons has released a statement addressing the FTC’s ongoing efforts to enforce consumer protections laws during the coronavirus pandemic.

Sponsors and promoters of sweepstakes are facing the decision as to whether to cancel or postpone planned promotions due to COVID-19. With respect to promotions that have already been registered and bonded in Florida, the Florida Department of Agriculture and Consumer Affairs (“FDACS”) has provided certain advice as to how these promotions will be treated. The FDACS has advised that there will be no refunds of filing fees in the event a promotion is cancelled due to COVID-19. However, if revisions to the Official Rules are required due to COVID-19, the FDACS has agreed to waive late penalties. In addition, the FDACS will permit substitution of trip or sports related prizes due to COVID-19.

With the federal government and most states under a state of emergency due to the COVID-19 pandemic, telemarketers should be aware of laws that restrict telemarketing calls during a state of emergency.  

As part of a periodic review of its rules and guidance, the Federal Trade Commission is seeking public comment as to whether changes should be made to its Endorsement Guides, which provide insight as to the agency’s thinking on influencer marketing and testimonials/endorsements. Initially published in 1980, the Guides were most recently revised in 2009 to provide guidance on a wide array of internet marketing techniques. Since 2009, social media and the use of influencer marketing has become an integral part of many companies’ advertising and marketing portfolio and has grown significantly. Against this backdrop, the FTC is seeking public comments to determine if and how it should revise the Guides to reflect this continually evolving landscape of social media and online advertising.

In the current fight over the enforcement authority of the Federal Trade Commission (“FTC”) – see previous Olshan blog posts here for background – Complete Merchant Solutions, LLC (“CMS”), an independent sales organization (“ISO”) that serves as an intermediary between merchants interested in processing credit card transactions and credit card payment networks, is the latest challenger.

Andrew Lustigman, head of Olshan’s Advertising, Marketing & Promotions Practice Group, was quoted in a LegalTech News article on the use of social media by attorneys and the ethical implications that accompany it. 

Happy holidays! As we enter a new year, Olshan’s Advertising & Branding groups share their list of current hot topics in advertising law. In no particular order (drum roll please), here is our top 10 list:

New York has just passed legislation that has the capacity to be one of the most onerous telemarketing compliance laws. The legislation may potentially impact telemarketers’ outbound calling and data sharing practices.

Olshan Advertising & Marketing attorneys have authored an extensive Q&A, published by The In-House Lawyer which can be used as a general key to the legal framework and issues that surround the pharmaceutical advertising law in the United States.

The Federal Trade Commission (“FTC”) announced that it is seeking public comment on ways to improve its existing regulations for negative option marketing, namely, the need for amendments to its Rule Concerning the Use of Prenotification Negative Option Plans (the “Negative Option Rule” or “Rule”).

The National Advertising Division of the Council of Better Business Bureaus (“NAD”) recently recommended that Bayer Healthcare LLC (“Bayer” or the “advertiser”) discontinue particular comparative superiority claims for Aleve, including “Proven Better on Pain than Tylenol,” following a challenge by Johnson & Johnson Consumer Inc., maker of Tylenol products.  The decision shows the scrutiny NAD will give to broad and unqualified superior efficacy claims.

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