Advertising Law Blog

Andrew Lustigman, head of Olshan’s Advertising, Marketing & Promotions Practice Group, was quoted in Luxury Daily and Mobile Marketer on what the future of net neutrality—which protects online data from potential discrimination by Internet Service Providers (ISP’s) or by the government—could hold for digital marketers and consumers alike, especially in light of the recent appointment of Ajit Pai, an opponent of net neutrality, as the new FCC Chairman.

Companies and advertisers need to ensure that any “Made in USA” claims they make are not misleading, as the FTC  has increased scrutiny of such claims.

Lee Peeler, the President and CEO of the Advertising Self-Regulatory Council (ASRC) and Executive Vice President, National Advertising, Council of Better Business Bureaus (CBBB) recently announced that Andrea Levine, who has headed NAD for 20 years, is set to retire.

Is there a constitutional right to social media? The ongoing dialogue surrounding First Amendment concerns born out of the Internet and social media was the focus of Supreme Court oral arguments on Monday, February 27, 2017. Discussing a North Carolina law that prohibits registered sex offenders from participating in social media sites like Facebook and Twitter, the justices’ comments seemed to suggest a likelihood that they would strike down such a law on First Amendment grounds.

Many think that the Federal Trade Commission will no longer be the significant enforcement power it has been in recent decades. While time will tell how things play out with the new administration and, presumably, new FTC Commissioners, it is likely that the FTC will remain a very powerful and thoughtful consumer protection agency, focused on protecting consumers from harm. What constitutes consumer harm, however, and the appropriate remedy for noncompliance, may change under the current administration.   

NAD has been at the forefront of scrutinizing social media content for compliance with applicable advertising standards. Its recent decisions challenging Fit Tea’s social media advertising, including bringing a proceeding against three of the Kardashians, exemplifies the reality that both brands and influencers are potential liable for improper claims.

While the FTC’s Mail Order Sales Rule pre-dates the Internet by decades, the Rule remains relevant with today’s online marketing practices, particularly for pre-orders. Companies that rely on pre-orders for a concept product need to take careful note of recent action filed by the San Francisco District Attorney against Lily Robotics, Inc. for false advertising and unfair business practices. After acquiring tens of millions of dollars’ worth of capital investment and pre-order revenue for a conceptual drone, the company repeatedly delayed release of the product in 2015 and 2016, and has since failed to produce a saleable product.

Many early stage technology-based companies with promising ideas may compromise substantiating their product’s performance claims with the belief that there is time for compliance down the road.   The FTC’s recent case against the marketers of two app-supported smartphone accessories, advertised to accurately measure consumers’ blood alcohol content, and who received funding on Shark Tank, highlights the risk in waiting.

Olshan Advertising Chair Andrew Lustigman will speak at the IZEAFest 2017 which is being held in Orlando, FL.

Section 230 of the Communications Decency Act immunizes websites that merely provide an outlet for another party to provide its content.