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
The FTC filed a complaint against Volkswagen alleging that the company violated the FTC Act when it deceived consumers through an advertising campaign promoting its supposedly “clean diesel” Volkswagen and Audi automobiles. The FTC alleges that Volkswagen fitted those cars with illegal emission defeat devices designed to mask high emissions during government emissions testing. The marketing campaign featured high-profile Super Bowl ads, online social media campaigns, and print advertisements that often target “environmentally-conscious” consumers.
Andrew Lustigman, head of the firm’s Advertising, Marketing & Promotions Practice Group, was quoted in the article “Under the Influence” published in Contently on April 20th, 2016, following the FTC’s Lord & Taylor settlement focusing on native advertisements and influencers.
Andrew Lustigman, head of the firm’s Advertising, Marketing & Promotions Practice Group, was quoted following the FTC’s Lord & Taylor settlement focusing on native advertisements and endorsements in the article, “FTC's Lord & Taylor Action Shows Perils Of New Ad Strategies,” published in Law360 on March 15, 2016.
The Federal Trade Commission issued its annual list of consumer complaints received by its Consumer Sentinel Network.
Retailers across the country have been facing private class action lawsuits alleging that certain discount pricing practices constitute false advertising based on the allegation that the discount is fictitious. Discount retailer, Kohl's, recently obtained dismissal of one such action.
The FTC’s Enforcement Policy Statement on Deceptively Formatted Advertisements and business guidance detailing the agency’s position with respect to native advertising reinforces advertisers’ obligation to be transparent and authentic. Moreover, with the increasing prevalence of native ads, the FTC’s announcements likely will trigger enforcement actions in the not too distant future.
Lumosity and FTC reach a settlement with regard to Lumosity’s Brain Training Program
Olshan Advertising, Marketing & Promotions Practice Group Leader Andrew Lustigman was extensively quoted in the Electronic Commerce & Law Report published by Bloomberg BNA addressing the outlook of social media advertising.
Payment methods, Verification, Do Not Call provisions among those modified
Brands must actively monitor the posts by social media influencers, particularly where there is a business relationship, either directly or indirectly, between them.
Andrew Lustigman to speak at IZEAFest 2015 on October 23, 2015.
Mobile Marketer Daily recently highlighted the Firm client alert from Olshan Advertising Partner Andrew Lustigman addressing the new social media and endorsement guidance from the FTC.
Olshan Advertising Partner Andrew Lustigman was quoted regarding FTC’s power to penalize companies for insufficient cybersecurity practices.
Olshan Advertising, Marketing & Promotions Partner Andrew Lustigman was quoted in a Law360 article on the Federal Trade Commission’s revised advertising endorsement guidelines addressing paid product reviews on social media.
As part of its recent bankruptcy proceeding, RadioShack sought to auction off its vast collection of personal information about its customers. However 38 states and the FTC objected to the sale on the grounds that it violated RadioShack's existing privacy policy. The limitations on the transfer of data RadioShack agreed to in an eventual deal with the states shows that companies need to be forward thinking regarding future transfers of data when crafting their data privacy policies.
The FTC recently updated its Endorsement Guides FAQs, entitled “The FTC’s Endorsement Guides: What People Are Asking”. As advertisers increasingly rely on third parties to promote their products and services, the revised FAQs provide guidance as to appropriate disclosures and compliance obligations that should be considered in connection with such marketing efforts. This highlights the revisions to the FAQs and discusses key steps advertisers should take to support their compliance efforts.
Despite obtaining an appellate ruling rejecting an across the board fixed substantiation requirement and an endorsement of first amendment rights to truthful promote certain health claims, POM is now seeking a rehearing from the broader appellate court on the issue of the constitutionality of POM’s advertising. While such a challenge is a long shot, the stakes are high for the FTC and marketers alike.
A District Court has ruled that LeadClick Media, an affiliate marketing network, and its parent company, CoreLogic, Inc., must turn over $16 million they received from Leanspa LLC, an advertiser that sold purported weight-loss products.
Partners Andrew Lustigman and Howard Smith authored an article published by Inside Counsel entitled, "When self-regulatory remedies can be the better alternative."
The FTC and the makers of the Jungle Rangers mobile App game, which is geared towards children, have reached a settlement regarding the company's unsubstantiated cognition-related claims in their advertisements.
Mobile provider settles with FTC for deceptive advertising claims about its data plans.
Complaint says Ring Pop promotion violated children’s privacy law, serves as an important reminder of COPPA.
A recent Facebook change is just another reminder that brands need to be aware of the traditional legal rules governing promotional marketing, as well as the social media terms and policies.
In response to its dispute with Amazon, the FTC has revised some of its FAQs with regard to parental consent.
The appellate court has rejected the FTC’s argument that internal sales cannot be considered sales to ultimate users for purposes of a pyramid scheme analysis.
The new FTC report “Data Brokers: A Call for Transparency and Accountability” proposes specific legislation as well as best practices.
The FTC’s settlement with Fortune Hi-Tech continues the agency’s push to permit only commissions on third-party sales.
Entry into a contest to receive a prize in exchange for endorsing a product through social media constitutes a material connection and the endorsement needs to be disclosed.
Companies that use lead generators must exercise due diligence when they buy lists of phone numbers.
The FTC and the Information Commissioner’s Office of the United Kingdom (UK) entered into a memorandum of understanding (MOU) intended to promote increased cooperation and communication between the two agencies to protect consumer privacy.
Paid spokespersons must disclosure their connection.
An important reminder for those featuring or referring to the Safe Harbor mark on their websites.
In United States vs. Mortgage Investors Corp. of Ohio, filed in the Middle District of Florida on June 25, 2013, a home loan refinancing company agreed to pay a $7.5 million civil penalty for allegedly violating Do Not Call provisions of the Telemarketing Sales Rule (TSR).
On June 19, 2013, the Federal Trade Commission (FTC) held an industry roundtable in Washington, D.C. to discuss potential revisions to its Jewelry Guides.
The FTC has proposed new amendments to the Telemarketing Sales Rule. Importantly, the proposed changes would bar non-traditional payment mechanisms such as remotely created checks. The proposed rules also clarify other provisions of the Rule.
By William MacDonald*
In response to alleged industry inaction, Senator Jay Rockefeller (who plans to retire at the end of next year) recently reintroduced a bill, the "Do-Not-Track Online Act of 2013", that would require all Web browsers, online companies, and app makers to give users a choice of opting-out of being tracked online.
By William MacDonald*
A recent settlement with HTC America, a major mobile device manufacturer, illustrates that the FTC's interest in securing such payment systems isn't just academic.
On March 12, 2013 the Federal Trade Commission released an update of its guidance known as Dot Com Disclosures, which was first released in 2000.
By William MacDonald*
The FTC notes that mobile payment systems, which are gaining popularity, can provide innovative and convenient options for consumers. The report, however, highlights three primary areas of potential concern for consumers.
The categories in the 2012 Annual Report are important as they typically portend future FTC scrutiny and enforcement for businesses in such areas.
On the same day that the FTC released its new report on mobile privacy, the Commission also announced its latest online mobile privacy enforcement action, an $800,000 settlement with the operator of the Path social networking app.
On February 1, 2013, the FTC released its latest privacy-focused report, Mobile Privacy Disclosures: Building Trust Through Transparency.
After a number of rounds of public comment and workshops, the FTC has released its revised regulations under the Children's Online Privacy Protection Act of 1998 ("COPPA").
In recent days, numerous Facebook users have posted a legal-sounding statement as an update to their pages containing some version of the following:
The FTC is seeking comments on the benefits and cost of the Textile Labeling Rules, as well as other issues.
Kindle Fire's unusual Web browser, called Amazon Silk, is" cloud-accelerated," and raises concerns.
The FTC has been seeking public comment and input for a number of years on whether its regulations under the Children's Online Privacy Protection Act of 1998 need to be revised or updated to address changes in technology and business.