Alleged “dark patterns” now in play in at least four separate actions
Last year, this blog reported about Dorobiala v. Amazon.com, a private class action pending in federal court in the Western District of Washington against Amazon over the "dark patterns” Amazon used to hamper consumers from canceling their subscriptions to the Amazon Prime program. As described in a recent blog post, the Federal Trade Commission (“FTC”) upped the ante in June by filing suit against Amazon in the same court.
Meanwhile, not only is Dorobiala is still pending, there are at least two other ...
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 ...
For late-shipped goods, Court deducts the value of benefits received by consumers
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.
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.
* Taylor Lodise is a law clerk in the Litigation practice group.
On November 9, 2022, amidst ongoing investigations by the FTC regarding “dark patterns” that Amazon allegedly employed to discourage subscribers from canceling their Amazon Prime memberships, a class-action lawsuit named Amazon as a defendant. The lawsuit was filed in United States District Court for the Western District of Washington and is styled Dorobiala v. Amazon.com, Inc.
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.
Internet phone service provider, Vonage, has agreed to pay $100 million to settle the Federal Trade Commission’s charges that it imposed fees and made it difficult for subscribers to cancel their service. Specifically, the FTC alleged that Vonage implemented “dark patterns” to create obstacles for subscribers looking to cancel their services, often resulting in consumers being charged even after they had requested cancellation. This settlement highlights the FTC’s continued focus on “dark pattern” marketing techniques, particularly as they are applied to cancellation of automatically renewing subscription arrangements.
* 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.
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.
FTC likely to eliminate the exemption
The Federal Trade Commission (“FTC”) is considering a proposed amendment to the Telemarketing Sales Rule (“TSR”) that would broaden the rule’s scope by prohibiting material misrepresentations and false or misleading statements in business-to-business (“B2B”) transactions.
FTC's recent actions regarding earnings claims makes clear that the agency is focused on challenging earnings claims, particularly those that are atypical.
Fashion retailer agrees to $4.2 million settlement with the FTC and the issuance of guidance regarding consumer reviews
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.
FTC trying to recover the right to seek disgorgement of unjust enrichment in federal court
Court allows FTC to withdraw disgorgement claims with eye towards possible reinstatement.
FTC can no longer go straight to court to recover monetary damages
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.
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 Lustigman, Scott Shaffer, Mary Grieco and Morgan Spina presented a webinar for the Consumer Protection Monthly Update hosted by the American Bar Association Antitrust Law Section.
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."
Court reverses award of $448 million in ill-gotten gains
The Court of Appeals for the Third Circuit rejected a district court’s award of $448 million against a pharmaceutical company in a lawsuit brought by the Federal Trade Commission (FTC). In an antitrust case styled FTC v. AbbVie, Inc. (decided on September 30, 2020), the Third Circuit ruled that district courts lack the power to order disgorgement under the FTC Act. While the Third Circuit ruled in favor of the FTC on other issues in this case, the reversal of the disgorgement award the FTC is the focus of this blog entry.
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.
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.”
The U.S. Securities and Exchange Commission (the “SEC”) filed enforcement actions on May 14, 2020, against two unrelated companies, Turbo Global Partners, Inc. (“Turbo”) and Applied BioSciences Corp. (“APPB”). The SEC charged both companies with securities fraud based on alleged materially misleading statements that the companies were offering and shipping products to combat the coronavirus (COVID-19). These actions taken by the SEC are consistent with approaches taken by other regulators, including the Federal Trade Commission and Food and Drug Administration (the “FDA”), with regard to misleading statements made in connection with coronavirus-related products. On the whole, regulators appear to be particularly cognizant of businesses and individuals seeking to take improper advantage of the circumstances created by the global pandemic, and as such are taking action against such companies and individuals.
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.
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.
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.
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:
Influencer marketing is one of the most popular marketing tools for companies in today’s market. Influencers can make substantial sums of money for just one post. While this is a great way for influencers to earn a living and for companies to get their message across to today’s consumers, there are risks involved with social media marketing if not executed properly. The Federal Trade Commission (“FTC”), among other responsibilities, works to stop deceptive advertising. As we have previously reported, everyone involved in social media marketing needs to be sure that influencers comply with the FTC’s Enforcement Guidelines (the “Guidelines”).
Liu v. SEC will also likely affect Federal Trade Commission’s powers
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”).
Focusing on its use of warning letters to crack down on impermissible health claims, the FTC recently sent warning letters to three companies that sell a variety of CBD products, including those taking the form of “oils, tinctures, capsules, gummies, and creams.” In its Press Release announcing the issuance of the warning letters, the FTC noted that it had cautioned the companies against advertising that products, including those containing CBD, can “prevent, treat, or cure human disease” in the absence of “competent and reliable scientific evidence to support such claims.”
On September 4, 2019, the Federal Trade Commission (“FTC”) announced that YouTube and its parent company, Google, agreed to pay a record-breaking $170 million fine to settle claims by the FTC and New York Attorney General (“NYAG”) that YouTube violated children’s privacy laws.
As we have discussed previously, the Federal Trade Commission (“FTC”) has consistently relied on Section 13(b) of the FTC Act (15 U.S.C. §53(b)) for authority to initiate and maintain federal court challenges against defendants it believes have violated the FTC Act. Section 13(b) states that when the FTC has “reason to believe” that an individual or corporate entity “is violating, or is about to violate” a law enforced by the FTC, it may bring suit in federal court “to enjoin such acts or practices.” Moreover, the statute states that “in proper cases, the Commission may seek, and after proper proof, the court may issue, a permanent injunction.”
Andrew Lustigman, head of Olshan’s Advertising, Marketing & Promotions Practice Group, was quoted in a Law360 (subscription required) article titled "Kids' Data Again In spotlight as FTC Revisits Privacy Rule"
Disgorgement Avoided Even Though Liability Established
As we have discussed in a prior post, the FTC and FDA have been involved in a joint effort to curb non-compliant labeling and/or advertising of e-liquids for use in e-cigarettes. For the most part, the agencies have been focused on protecting children and young people from the dangers of nicotine and tobacco products by cautioning manufacturers, distributors and retailers of e-liquid products against using labeling, packaging and/or advertising that resembles children’s food products, like juice boxes, candies or cookies.
Olshan’s Advertising, Marketing & Promotions Practice Group chair Andrew Lustigman and associate Morgan Spina authored an article for the ABA’s Spring 2019 What’s In Store newsletter titled “Are FTC Enforcement Powers Being Reined In?”
As we have discussed previously, the prevalence of Internet usage in everyday life has led to an e-commerce market whereby consumers are able to post online reviews of a vast range of products and services. For the most part, such reviews are made public without regard to the relevant expertise of the reviewers, and with little to no oversight as to the legitimacy of such reviews. You can see our prior articles on this topic here and here. Against this backdrop, the Federal Trade Commission (“FTC”) has brought a claim against a marketer for the deceptive use of fake, paid-for reviews on an independent retail website for the first time. The FTC’s enforcement efforts in this regard should signal to marketers that the FTC is taking such actions seriously.
The Food and Drug Administration (“FDA”) and Federal Trade Commission (“FTC”) have issued joint warning letters focusing on disease claims being made by dietary supplement marketers. In addition, the FDA announced new steps it is undertaking with a goal toward protecting the public from potentially harmful products and unapproved claims.
FTC must react to Eleventh Circuit’s LabMD ruling
The FTC heavily relies upon its statutory authority to seek injunctive relief in federal court. The FTC has broadly interpreted these powers to seek not just injunctive relief enjoining a particular practice, but monetary relief in the form of disgorgement. Moreover, the FTC has taken the position that defendants in such actions are not entitled to a jury trial, because the relief being sought is merely equitable.
The FDA and FTC together have recently issued 13 warning letters to manufacturers, distributors, and retailers, cautioning against the sale of e-liquids for use in e-cigarettes using labeling and/or advertising that is similar to that which is found on children’s food products, like juice boxes, candies, or cookies. The warning letters were sent in furtherance of the FDA and FTC’s efforts to protect young people from the dangers of nicotine and tobacco products.
The Federal Trade Commission (“FTC”) has approved revisions to its Jewelry Guides. The FTC’s Jewelry Guides aim to help marketers in the jewelry industry avoid consumer deception, while simultaneously interpreting how Section 5 of the FTC Act applies to certain practices in the industry. Section 5 of the FTC Act declares unlawful any “unfair or deceptive practices in or affecting commerce.” The FTC has released other similar industry-specific reports and guidelines including, for example, reports and guidelines related to the clothing and textiles industry, finance industry, and tobacco industry. As the jewelry industry evolved, it became clear to the FTC that a revision of its Jewelry Guides was warranted. As such, these recent revisions seek to encompass and address new issues facing the industry.
The FTC recently announced that it has given final approval to a settlement with PayPal, Inc. over allegations that Venmo, its peer-to-peer payment service, misled consumers about their ability to transfer funds to external bank accounts and control the privacy of their transactions.
On April 26, 2018, the Senate unanimously confirmed all its nominees to the Federal Trade Commission (“FTC”), allowing the FTC to regain full strength for the first time since President Trump took office. In the months since President Trump’s inauguration, the FTC has been operating with just two Commissioners.
Andrew Lustigman and Morgan Spina published an article in BNA Big Law Business entitled “Understanding Advertising Disclosure Obligations Within Virtual Reality.”
Even though products that are Made in the USA are sometimes more expensive than imported products, many American consumers prefer to buy Made in the USA products, especially in today’s climate. Products that are Made in the USA help to provide jobs to Americans, promote American independence, and presumes a better quality product. Companies should be warned that if they make a claim that their products are Made in the USA, the claim needs to be true so that consumers are not deceived.
Over the last several years, the use of social media as a vehicle for advertising has grown exponentially. As discussed in prior blog posts, examples of which you can find here and here, the Federal Trade Commission (“FTC”) has released guidelines pertaining to such paid social media posts, requiring that any material connections between advertisers/brands and those social media users posting the content is clearly and conspicuously disclosed.
The Federal Trade Commission recently filed a complaint in the United States District Court for the District of Utah against three defendants who purchase hotel room inventory through online travel agencies (“OTAs”) and then market those hotel rooms to consumers on the internet through search engine marketing such as Google.
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”).
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
The Children’s Advertising Review Unit (“CARU”) recently referred the maker of “My Friend Cayla Party Time” children’s doll and its related “My Friend Cayla App” owned and operated by Genesis Toys to the FTC after the company did not respond to CARU’s initial privacy inquiry.
The FTC has increasingly relied on equitable monetary remedies (such as disgorgement based on gross revenues less returns) to avoid the applicability of an analogous statute of limitations defense. The Supreme Court’s recent decision in Kokesh v. SEC may change that practice.
In April, the Federal Trade Commission (FTC) sent out 90+ letters to brands and influencers, notifying the parties of their obligations to disclose material connections in sponsored social media posts.
On June 29, 2017, the ABA Section of Antitrust Law, Economics Committee hosted a Fireside Chat with FTC Acting Bureau of Consumer Protection Director, Tom Pahl. The program offered an insightful behind the scenes view of the Bureau’s priorities now and in the future.
The Federal Trade Commission (FTC) has recently updated its compliance plan for businesses regarding the Children’s Online Privacy Protection Act (COPPA).
The FTC considers review sites to be advertising and will hold marketers responsible for their content
Ruling shows that fraud can trump homestead protection laws
The FTC is increasing its scrutiny of brands' use of social media influencers who fail to disclose to a material connection between the brand and the influencer.
Federal court rules that telemarketers may not use soundboard technology to avoid robocalling restrictions.
Data Breach Suits Could Be Limited By Trumps’ Future Appointees
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.
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.
On September 22, 2016, various branches of the U.S. government announced unprecedented enforcement actions targeting sweepstakes, prize promoters, and astrology direct mailers, as well as their suppliers. The actions will likely dramatically impact direct marketers and their suppliers for the foreseeable future.
InMobi deceptively tracked the locations of hundreds of millions of consumers, including children, without their knowledge or consent to serve them geo-targeted advertising.
On December 22, 2015, the Federal Trade Commission (“FTC”) issued the Native Advertising: A Guide for Business (the “Native Advertising Guide”). The Native Advertising Guide was published to help companies determine when and how to disclose what content is native advertising.
Andrew Lustigman, head of the firm’s Advertising, Marketing & Promotions Practice Group, was quoted in Fashion Law Blog in separate articles titled “A How-To Guide for Properly Disclosing Your Sponsored Posts” and “EXCLUSIVE: The Dirty Advertising Practices of the Industry's Biggest Brands, Bloggers” addressing native advertising and the FTC, social media influencers and bloggers not adhering to appropriate disclosure guidelines.
Four companies reached settlement with FTC on charges that their products were 'all natural' despite containing artificial ingredients or chemicals.
The FTC has approved a final consent order with Machinima, Inc., requiring the company to disclose when it has compensated influencers to post YouTube videos or other online product endorsements as part of influencer campaigns.
The FTC brought charges against Lord and Taylor claiming that it deceived consumers by paying for native advertisements, including a seemingly objective article in Nylon (an online publication) and a Nylon Instagram post, without disclosing that the posts actually were paid promotions for Lord & Taylor’s 2015 Design Lab clothing collection.
Federal Trade Commission, all Fifty States, and the District of Columbia v. Cancer Fund of America Inc., et al., No. 2:15-cv-00884-NVW (D. Ariz.)
App developers on the Google Play market received warning letters from the FTC
Federal Trade Commission v. Amazon.com, Inc., No. 2:14-cv-01038 (W.D. Wash.) April 26, 2016
- New York Protects Consumers from Expiration or Cancellation of Loyalty Points
- Vive le Québec libre!: Sweepstakes are Welcome!
- Fast Food Chains Are on a Roll in Hamburger Lawsuit
- Starbucks Faces Legal Battle Over Deceptive Product Labeling
- Andrew Lustigman Quoted in Corporate Counsel on What the Fifth Circuit's Content-Moderation Ruling Means for Social Media
- Fast-Food Chain Sued Over Not “Having the Meats”
- Lustigman and Spina Present CLE Webinar on the Nuts and Bolts of Structuring and Promoting a Lawful Sweepstakes
- Andrew Lustigman and Jeremy King Publish Article in Bloomberg Law on Why Social Media Influencers Must Weigh Liability Insurance Options
- Andrew Lustigman Speaking at IBA’s 2023 Annual Conference in Paris
- Andrew Lustigman Publishes Article in Bloomberg Law on the Potential Risks Threads Poses to Brands
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