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Olshan's 2020 Hot Topics in Advertising Law

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:

  1. FTC faces significant legal challenges to its enforcement powers. For years, the Federal Trade Commission has recovered monetary awards in federal court  under the guise of “equitable relief.” Historically, courts have allowed such relief to include payments for disgorgement, restitution and refunds even though money awards do not traditionally fall under the category of equitable relief. Now, however, there are a number of significant appeals working their way through the federal judicial system that may greatly limit the availability of these types of claims to the FTC. These decisions are challenging the applicability of ancillary monetary relief and statutes of limitations, and may impose on the FTC a burden to show that a defendant is violating or about to violate a law enforced by the FTC. Should the FTC lose these legal battles in 2020, it will have to rely more on administrative proceedings or ask Congress to rewrite the law.
  2. Is there a decrease in federal enforcement actions under the Trump Administration? FDA warning letters have fallen by one-third since Trump’s inauguration through May 2019. FDA “official action indicated” inspection reports and injunctions also continue to trend downward. The number of publicly announced enforcement actions by the Consumer Financial Protection Board (“CFPB”) is also in steep decline since Trump took office.
  3. Joint FTC/FDA warning letters target online health claims. Unlike the FDA and the CFPB, the FTC and FDA, jointly, have expanded its use of warning letters, particularly relating to online health claims. The FTC and FDA have sent numerous joint letters aimed at companies’ advertising of dietary supplements and Cannabidiol (“CBD”) on their websites and social media channels.
  4. FTC focuses on fraudulent consumer reviews. The FTC has been directing  enforcement efforts at consumer reviews and their legitimacy. The agency has brought a number of claims against marketers for deceptively using fake or paid-for reviews on Amazon and other websites. The agency has also sued a seller of fake followers and “likes,” and sent warning letters to that company’s customers demanding that they take down the accounts of the purchased followers. Moreover, the FTC issued additional guidance to social media influencers.
  5. Privacy updates in California and beyond. The California Consumer Protection Act (“CCPA”) is slated to become effective on January 1, 2020. Nevada’s version has already gone into effect. California’s broader law imposes strict guidelines on the collection, storage and use of personal data. Other states are threatening to impose their own requirements on the collection and use of their residents’ data.  
  6. CBD consumer protection lawsuits. Plaintiff attorneys have been filing consumer protection lawsuits against CBD marketers. Some of these lawsuits  focus on quality control issues, such as the quantity of CBD in the product. A more recent wave has focused on health claims and the positioning of the product as a dietary supplement in light of the FDA’s position on the ingredient.
  7. New wave of ADA class actions target braille on gift cards. Many website retailers have been sued by plaintiffs’ attorneys seeking to enforce the Americans with Disabilities Act for failing to provide an appropriate online accommodation. These lawsuits are now expanding to retailers that offer gift cards. Plaintiffs are asserting claims that, among other things, gift cards should be printed in braille. 
  8. New York’s onerous telemarketing law. New York has just passed an update to its telemarketing law. The law, which is scheduled to go into effect in March 2020,  requires live voice outbound telemarketers to inform consumers that they have the option to be added to the seller’s internal do-not-call list. If a consumer opts to do so, the telemarketer must immediately end the call and add the number to the company’s internal do-not-call list. Previously, the requirement applied only to pre-recorded voice calls. Further, a customer’s express agreement must be obtained before sharing his/her contact information.   The existing law’s safe harbor for do-not-call compliance programs appear to remain.
  9. Negative option laws are becoming increasingly complex. This year saw the enactment of even more restrictions on negative option, leaving businesses with a patchwork of laws that will challenge even the most sophisticated online retailers. For example, Vermont requires a double opt-in (with the terms printed in bold font) for annual enrollments that renew for more than one month; North Dakota now prohibits multiple year enrollments; and Washington, D.C. requires additional notifications. California, which already had an onerous negative option law, has been aggressively enforcing its unique provisions. Furthermore, the FTC may significantly revise its negative option law, which currently applies only to “book of the month” type offerings.
  10. Copyright litigation brought by paparazzi photographers brings discussion regarding interplay between copyright and right of publicity to the forefront. There has been an uptick in cases brought by paparazzi against both models/influencers and brands for use of copyright-protected photographs on social media. Photographers have sued for copyright infringement based on the reposting of images (even when the model/influencer is reposting a picture of himself/herself) without first obtaining consent from the photographer.

Wishing you a happy, healthy and joyous holiday season!

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