The Advertising Law Blog provides commentary and news on developing legal issues in advertising, promotional marketing, Internet, and privacy law. This blog is sponsored by the Advertising, Marketing & Promotions group at Olshan. The practice is geared to servicing the needs of the advertising, promotional marketing, and digital industries with a commitment to providing personal, efficient and effective legal service.

The war on drip pricing continues. New York’s new credit surcharge law is now in effect requiring business to provide important pricing disclosures. The law amends and clarifies New York’s existing credit card surcharge law, General Business Law Section 518. Key requirements are outlined below.

Chair of the firm's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group Andrew Lustigman will speak on the panel “Shining a Light on ‘Dark Patterns’: What All Companies Must Know About this Rising Area of FTC Advertising Enforcement” as part of ACI’s 7th Annual Legal, Regulatory, and Compliance Forum on Advertising Claims Substantiation on February 9, 2024, at 9:45 a.m. The panel will explore how the Federal Trade Commission (FTC) and other enforcers are rapidly increasing their focus on “dark patterns” in advertisement designs, which are practices that regulators believe can trick or manipulate consumers into buying products or giving up their privacy. In addition, the Commission also just released a new proposed rule governing subscription offerings/negative options. Topics to be considered will include: specific website design and advertising practices that are currently triggering enforcement activity; the types of allegations being brought by the FTC in cases where dark advertising patterns are alleged; how companies can avoid being the next target in this rising wave of deceptive advertising enforcement; restoring your product’s reputation after it falls prey to a dark pattern; and the FTC’s latest amendments to the rules governing subscription offerings/negative options and junk fees.

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group, and associate Morgan Spina published an article in New York Law Journal entitled “Regulation of Automatic Renewals Remains Key Issue for Lawmakers.” In the article, Andy and Morgan discuss the revision of statutes surrounding subscription renewal fees, specifically those that are relevant to the cancellation of automatic renewals.

Lawsuit dismissed for failure to allege a physical nexus

A recent decision in the Western District of Pennsylvania has provided a rare defendant’s victory in an ADA (Americans with Disabilities Act) website accessibility lawsuit. In Murphy v. Spongelle LLC (decided on January 24, 2024), the plaintiff alleged that Spongelle’s website did not meet the ADA requirements for accessibility to visually impaired individuals. There have been thousands of similar lawsuits over the past decade, and the main reason for this proliferation is that there are still no clear guidelines for ADA compliance that businesses can follow when setting up a website. What made Spongelle unusual is that Judge Richard A. Lanzillo dismissed the lawsuit, raising critical questions about whether a website can be deemed a “public accommodation” under Title III of the ADA.

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group, published an article in Bloomberg Law entitled “New Laws, Consumer Actions Will Help Us Say Goodbye to Junk Fees.” In the article, Andy discusses the increasing significance of surcharges and undisclosed fees impacting consumer purchasing decisions.

Next year will likely see recommendations and rules from the U.S. Patent and Trademark Office (USPTO) and the U.S. Copyright Office in relation to artificial intelligence and its impact on intellectual property. Recognizing the lack of laws governing AI, on October 20, 2023, President Biden issued an Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (Order). The Order acknowledges AI’s “extraordinary potential for both promise and peril,” and parts of the Order deal specifically with intellectual property.

2024 is poised to be a year that the FTC increases its authority over the abuse of artificial intelligence in advertising. FTC chair Lina M. Khan wrote in a New York Times opinion piece, “As companies race to deploy and monetize A.I., the FTC is taking a close look at how we can best achieve our dual mandate to promote fair competition and to protect Americans from unfair or deceptive practices.” In late November, the FTC authorized its staff members to begin issuing non-public subpoena-like information demands for products and services that use or claim to be produced using AI. One of the FTC’s main concerns will be how AI uses consumer data. For example, in 2023, Amazon was accused of, and settled charges, that its Alexa software indefinitely kept recordings of children in order to perfect its voice recognition algorithm.

Privacy laws relating to the collection and use personal information continue to be a hot topic for 2024. While there is still no over-arching federal privacy law in the United States, several states have passed privacy laws that affect businesses that collect (whether online or off-line) and use personal information. California, Connecticut, Virginia, and Colorado already have privacy laws in effect. Utah’s privacy law goes into effect on December 31, 2023. Five more states’ privacy laws will become effective in 2024 – Washington (3/31/24), Oregon (7/1/24), Texas (7/1/24), Florida (7/1/24), and Montana (10/1/24). Additional state laws will become effective beyond 2024 – Delaware (1/1/25), Iowa (1/1/25), Tennessee (7/1/25), and Indiana (1/1/26). Beyond the laws that have been enacted, numerous state legislatures will be reviewing and debating proposed privacy legislation in 2024, namely: Missouri, Wisconsin, Michigan, Ohio, Pennsylvania, New Jersey, North Carolina, Maine, and Massachusetts.

Although not final as of the time this is being published, the FCC is poised to make life difficult for lead generators and the companies that rely on them. In late November, the FCC proposed a rule that would require texters and robocallers obtain prior express written consent that is specific to a single seller in order to comply with the Telephone Consumer Protection Act. The problem, according to the FCC, is the “lead generator loophole,” which currently allows lead generators to obtain consent on behalf of multiple sellers from consumers who complete a single lead form, often hyperlinked to a long list of sellers. The FCC is expected to pass the rule during in mid to late December, effective in 2024. Another possible change will be extending the National Do-Not-Call Registry to text messages instead of just phone calls.

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