Advertising Law Blog

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.

Starting in 2023, several new privacy laws go into effect in California, Virginia, Colorado, Connecticut, and Utah. These laws apply not only to businesses based in those states but to any business that meets certain thresholds and collects, stores, or processes personal information from any residents in those states. Penalties for non-compliance with these laws can be steep.

The National Advertising Division of the Council of Better Business Bureaus (“NAD”) recently reviewed claims made by subscription-based meal kit company Blue Apron related to its subscription cancellation process. In doing so, NAD has provided additional guidance as to what is expected from companies that enroll customers in automatically renewing continuity programs from a self-regulatory perspective.  

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.   

Tom Brady and Gisele Bundchen join Kim Kardashian and Floyd Mayweather as defendants.

* 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.

Federal Court rules CFPB funding mechanism is unconstitutional

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.