- Posts by Morgan E. Spina
AssociateAs a member of Olshan’s Brand Management and Protection Group, Morgan helps guide clients on all facets of brand management, including privacy, advertising and intellectual property optimization, enforcement and defense ...
2024 has been another huge year for automatic renewal laws and rules, both on the state and federal levels. A number of states, including Utah, Virginia, South Carolina, Tennessee, Minnesota, Illinois, and California, have introduced new laws or updated existing ones to include a range of different requirements, including those related to automatic renewal enrollment and cancellation pathways. These new and updated states laws, some of which go into effect in 2025, have added to the ever-evolving web of state laws that govern automatic renewals for residents of those specific states.
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 will present a myLawCLE webinar entitled “Sweepstakes, Contests, and Giveaways: Mastering the Legal and Regulatory Landscape” on December 3 from 1:00 – 3:10 P.M. (EST).
On November 15, 2024, the Federal Trade Commission (“FTC”) published its amendments to its Negative Option Rule, retitled as the Rule Concerning Recurring Subscriptions and Other Negative Option Programs (the “Final Rule”) in the Federal Register.
Chair of Olshan’s Intellectual Property Law Group and Co-Chair of the firm’s Brand Management & Protection Group Mary Grieco and associate Morgan Spina published a New York Law Journal article entitled “The Long Road To Settling a Trademark Case: Proactive Steps for Success” about the lengthy, and often expensive, legal proceedings surrounding trademark disputes.
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 “FTC's New 'Click To Cancel' Rule Is Here, But Will It Survive Judicial Challenge?.” In the article, Andy and Morgan discuss how automatic renewals for services—or “negative options”—continue to face amended laws. However, this has resulted in a patchwork of various regulations at the state and federal level, making absolute compliance a difficult proposition for companies.
Highlighting the increasing regulatory focus on paid subscription cancellation, the Federal Trade Commission has taken action against Care.com, alleging that the company systematically deceived users as to the wages and jobs information they could access on Care.com, and failed to provide a simple method for users to cancel their paid memberships. As part of its settlement, Care has agreed to pay $8.5 million to the FTC.
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 Bloomberg Law entitled “FTC’s Focus on Subscriptions Protects Consumers: Legal Insight.” In the article, Andy and Morgan provide a comprehensive overview of the complexities surrounding automatic renewal subscriptions, a payment model increasingly used by e-commerce businesses. The article offers critical advice for companies looking to navigate the evolving regulatory landscape, particularly in light of recent state and federal developments. Andy and Morgan highlight key areas of focus, including the importance of clear enrollment terms, streamlined cancellation processes and the implications of the FTC’s recent actions against major players like Amazon and Adobe. "Companies should ensure customers aren’t forced to reject a barrage of offers before the cancellation request is processed or are somehow taken out of the cancellation path if they are considering a save offer," they advise. Andy and Morgan emphasize that businesses must stay ahead of regulatory changes to avoid costly litigation and maintain consumer trust.
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 Attorney at Law Magazine entitled “FTC and States Continue to Prioritize Automatic Renewal Regulation and Enforcement.” In the article, Andy and Morgan discuss the recent regulations impacting subscription paths and payment models. “Because consumers are charged until they affirmatively cancel,” they note, “the regulatory scrutiny of these programs has continued to increase, both on the federal and state levels.” In light of the Biden administration's recently announced proposals regarding cancellations, this topic continues to be at the top of consumers' minds. Staying compliant requires vigilance and adaptation to evolving legal landscapes. Andy and Morgan write, “As active litigation unfolds ahead of the 2025 trial, attorneys should be mindful of the FTC’s position on automatic renewal programs and the newfound emphasis on transparent user experiences for consumers.”
On the heels of California’s “Hidden Fees Statute,” Minnesota has enacted its own price transparency law. Under the new Minnesota law, any business must disclose all mandatory fees or surcharges any time that that business advertises, displays or offers a price for goods or services.
Automatic renewal programs and frictionless cancellation processes continue to garner significant regulatory scrutiny. Now, the Federal Trade Commission (“FTC”) is taking action against the software company, Adobe, and two of the company’s executives, Maninder Sawhney and David Wadhwani, regarding the company’s automatic renewal subscription practices, particularly as such practices relate to the company’s subscription enrollment and cancellation pathways. After investigating the company’s subscription practices, the FTC referred the matter to the United States Department of Justice, who in turn filed a complaint in federal court in the Northern District of California.
As part of its routine monitoring activities, the Children’s Advertising Review Unit (“CARU”) of the BBB National Programs recently investigated videos and advertising on Vlad and Niki’s YouTube channel, owned and operated by Content Media Group FZC, LLC (“CMG”), for potential violations of CARU’s Advertising Guidelines and FTC laws and regulations.
Olshan Frome Wolosky LLP has been recognized by The Legal 500 US in its 2024 edition as a Leading Law Firm. The Advertising Practice has again been ranked along with three attorneys. The Shareholder Activism Practice has again been ranked as a Tier One practice, a position it has held since the rankings’ inception, including six of the practice’s attorneys. The rankings are based on feedback from clients, peers and The Legal 500’s independent research.
The Federal Trade Commission (“FTC”) has filed a complaint against Doxo, Inc. (“Doxo”), a bill payment company, and its co-founders, alleging that the company utilized misleading ads to imitate consumers’ billers, as well as deceptive practices to mislead consumers into paying millions of dollars in junk fees. As demonstrated by this latest enforcement action, the FTC is continuing to focus on manipulative marketing techniques known as “dark patterns.” This should serve as a reminder to marketers that the use of such practices may result in enforcement actions.
Olshan’s Advertising, Marketing & Promotions Group was named a leading Tier 1 law firm by Media Law International. MLI’s 2024 ranking guide, covering firms and practitioners with media law experience across 60 jurisdictions globally, recognized Olshan for its excellence. Employing a multidisciplinary approach, Olshan integrates Brand Management & Protection and Advertising lawyers to offer knowledgeable, solutions-focused advice. View the rankings and editorial in MLI’s 2024 guide.
The war on drip pricing continues. New York’s new credit surcharge law is now in effect requiring businesses 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.
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.
Significant developments in the FTC’s treatment of endorsements and reviews occurred this year. In June, the FTC finalized its revised Endorsement Guides. In addition to adding a definition of “clear and conspicuous,” explaining the potential liability advertisers, endorsers and intermediaries, and highlighting child-directed advertising as an area of specific concern, the revised guides include a new principle regarding procuring, suppressing, boosting, organizing, publishing, upvoting, downvoting, or editing consumer reviews that can alter how consumers interpret a product. In addition to the revised Endorsement Guides, the FTC has proposed a new rule that would specifically address deceptive practices involving consumer reviews. Further, it has continued to pursue enforcement actions against advertisers that utilize such consumer reviews in what the FTC purports to be a deceptive manner. For example, this year the FTC reached a settlement with room and roommate-finder platform, Roomster, in relation to charges that the company bought fake reviews to encourage consumers to pay for the platform. The FTC’s rulemaking process will continue into 2024, and we expect that the FTC will continue to prioritize this issue through both the rulemaking process and potential enforcement efforts.
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 will present a webinar on myLawCLE entitled “The Nuts and Bolts of Structuring and Promoting a Lawful Sweepstakes,” on September 27, 2023, from 3-4 p.m. (EST). In this CLE webinar, Andy and Morgan provide an introduction to sweepstakes law, covering the key legal areas of concern that arise in structuring a sweepstakes, including lottery law and gambling concerns and how to address them. Topics they will discuss include why bespoke rules are important and key provisions that should be incorporated when preparing a sweepstakes, as well as how to promote a sweepstakes on Instagram, Tik Tok and other social media platforms.
You can register for this CLE webinar here.
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 ...
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.
FTC’s Proposed New Rules for Businesses Selling Subscriptions Heighten Compliance Obligations, published in The New York Law Journal
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.
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.
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.
* Rachel Gold is a law clerk in the Corporate/Securities Law practice group.
Panera Bread Company (“Panera”) is facing a class action lawsuit that alleges its Unlimited Sip Club (“Club”) is in fact not so unlimited. According to Panera’s own promotional materials, the Club is a refill program where members pay $10.99 per month for access to lemonade, soda, coffee, and tea drinks of “any size” at “any time.”
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.
On July 1, 2022, California Assembly Bill 390 will take effect, adding new notice and cancellation requirements to California’s existing Automatic Renewal Law (“ARL”).
On May 12, 2022, Andrew Lustigman, Chair of the firm’s Advertising, Marketing & Promotion’s Group and Co-Chair of Brand Management & Protection Group and associate Morgan Spina will present at the Federal Bar Association webinar “Suppressing Negative Reviews Can Lead to Legal Trouble.”
FTC's recent actions regarding earnings claims makes clear that the agency is focused on challenging earnings claims, particularly those that are atypical.
Weight-loss app Noom has agreed to make substantial changes to its enrollment processes and pay $56 million, in addition to providing $6 million in subscription credits, in order to resolve a federal court case where the plaintiffs alleged that the company utilized deceptive automatic renewal tactics.
Olshan’s Advertising, Marketing & Promotions practice group has been named a Tier 2 firm as part of the 2022 release of Media Law International.
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.
Andrew Lustigman, Chair of the firm's Advertising, Marketing and Promotion's Group and Co-Chair of Brand Management & Protection Group, and associate Morgan Spina will speak on a virtual panel entitled “Advertising, Sweepstakes, Promotions and Competitions Workshop” hosted by LAWorld.
Olshan attorneys Andrew Lustigman, Mary Grieco and Morgan Spina will present a webinar entitled “The Legal Side of the Digital Marketing World” hosted by the Social Media Association.
The self-regulatory body that oversees advertising aimed at children, the Better Business Bureau (“BBB”) National Programs’ Children’s Advertising Review Unit (“CARU”), has issued revised CARU Advertising Guidelines (the “Revised Guidelines”). The Revised Guidelines state that advertisers recognize that children have limited knowledge and sophistication, and as such their ability to evaluate the credibility of advertising is limited. It is within this context that the Revised Guidelines seek to ensure that advertising directed to children is not deceptive or inappropriate. The Revised Guidelines apply to advertising content targeting children under the age of 13.
On July 9, 2021, the Colorado Governor signed Colorado House Bill No. 1239 into law, resulting in Colorado becoming the latest state to enact new automatic renewal and cancellation procedures applicable to consumer sales contracts. In addition to addressing general automatic renewal contracts, the new Colorado law establishes certain requirements regarding the execution and enforcement of dating service contracts.
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.
Olshan’s Advertising, Marketing & Promotions Practice Group chair Andrew Lustigman and associate Morgan Spina have authored an article published in NYSBA Inside entitled “Check Your Enrollment Path: New York Enacts Comprehensive Automatic Renewal Law.”
The Legal 500 published a Q&A authored by attorneys Andrew Lustigman and Morgan Spina, entitled “United States: Pharmaceutical Advertising”
The client alert addresses how New York has now joined other states with some of the most burdensome automatic renewal laws, enacting a sweeping law that regulates automatic renewal disclosures and cancellation procedures.
Our fast-moving webinar discussed key issues involving marketing and business practices in the current environment.
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.
The New York Law Journal published an Expert Opinion article authored by attorneys Andrew Lustigman and Morgan Spina, entitled “Avoiding Viral Fashion Promotion Malfunctions.”
Olshan Advertising & Marketing attorneys have authored a comprehensive Q&A, published by The Legal 500, which can be used as a general key to the legal framework and issues that surround the pharmaceutical advertising law in the United States. The attorneys that contributed to this Q&A include the Chair of Advertising, Marketing and Promotions Group Andrew Lustigman and attorneys, Safia Anand, and Morgan Spina.
Click here for The Legal 500: Pharmaceutical Advertising Comparative Guide:United States: Pharmaceutical Advertising Q&A
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.
To expedite advertising challenges on discrete issues, the National Advertising Division (NAD) of the Better Business Bureau has launched a new fast-track process. The new process will resolve eligible matters within 20 business days from initiation of the challenge.
Multinational corporation, 3M Company (“3M”), has filed a string of lawsuits alleging trademark infringement against distributors of its 3M-branded N95 respirator masks. N95 respirator masks have become crucial in the fight against COVID-19. 3M has supplied healthcare workers and other first responders with 3M-branded N95 respirators. 3M’s recent lawsuits target false and deceptive price-gouging on the part of unauthorized third-party distributors, seeking to take advantage of the heightened demand for N95 respirators during the COVID-19 pandemic. Interestingly, these lawsuits do not allege that the defendants are selling counterfeit products. Instead, 3M alleges that the defendants, unauthorized resellers, are implying a direct relationship with 3M when selling 3M-branded products at inflated prices.
Resolving a circuit split, the Supreme Court (the “Court”) has held that willfulness is not a precondition for disgorgement of an infringer’s profits from the infringement in a trademark infringement case. In Romag Fasteners, Inc. v. Fossil Group, Inc., the Court considered willfulness as but one of the factors that may be considered in deciding whether or not to award an infringer’s profits to a trademark holder, rejecting the premise that a showing of willfulness is required before an infringer’s profits may be awarded.
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.
In 2017, California-based clothing company, Sunny Co. Clothing, posted a photo to its Instagram account displaying a model wearing Sunny Co. Clothing’s “Pamela” red, full-piece bathing suit. The caption stated that every person who reposts the image tagging Sunny Co. Clothing “will receive a FREE Pamela Sunny Suit.” Sunny Co. Clothing failed to set a maximum on the number of swimsuits available for the promotion. The post quickly went viral and Sunny Co. Clothing found itself in the undesirable position of not being able to fulfil its promotional obligations as it simply did not have enough swimsuits to meet the demand. Sunny Co. Clothing publicly learned the importance of having complete and conspicuously disclosed contest rules for social media giveaways. Reese Witherspoon’s fashion label, Draper James, is now learning the same lesson several years later.
Advertising, Marketing & Promotions partner Andrew Lustigman, Intellectual Property partner Mary Grieco and associate Morgan Spina authored a chapter entitled, “USA – Cookies & Similar Technologies” in a recent publication included in the prestigious OneTrust DataGuidance (subscription required). The chapter covers the current laws and information regarding the use of cookies and third parties on the Internet.
Vermont, which already has one of the most unique automatic renewal laws on the books, has further increased the compliance obligations for sellers utilizing continuity arrangements. On March 5, 2020, Governor Phil Scott signed Vermont Senate Bill 110 into effect. This new law primarily tackles issues surrounding privacy, but also updates Vermont’s automatic renewal provisions to bring cancellation of consumer contracts in line with California’s online requirements. The law goes into effect on July 1, 2020.
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.
Sponsors and promoters of sweepstakes are facing the decision as to whether to cancel or postpone planned promotions due to COVID-19. With respect to promotions that have already been registered and bonded in Florida, the Florida Department of Agriculture and Consumer Affairs (“FDACS”) has provided certain advice as to how these promotions will be treated. The FDACS has advised that there will be no refunds of filing fees in the event a promotion is cancelled due to COVID-19. However, if revisions to the Official Rules are required due to COVID-19, the FDACS has agreed to waive late penalties. In addition, the FDACS will permit substitution of trip or sports related prizes due to COVID-19.
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.
Olshan Advertising & Marketing attorneys have authored an extensive Q&A, published by The In-House Lawyer which can be used as a general key to the legal framework and issues that surround the pharmaceutical advertising law in the United States.
Ariana Grande has filed a lawsuit against Forever 21 and its related beauty brand, Riley Rose (founded by the daughters of Forever 21 founder, Do Wan Chang), alleging that the fast fashion and beauty brands capitalized on the success of Ms. Grande’s Thank U, Next album by posting images of Ms. Grande on the brands’ social media accounts as well as images of a model bearing a striking resemblance to Ms. Grande.
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.”
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.”
The National Advertising Division of the Better Business Bureau (“NAD”) recently found two separate “#1” claims to be sufficiently supported, thereby providing valuable insight to advertisers regarding the type and degree of information required to support such a claim.
The Electronic Retailing Self-Regulation Program (“ERSP”) has recommended that Alo, LLC (“Alo Yoga”) modify the Instagram posts of certain influencers of its products to disclose the material connection between Alo Yoga and the influencers.
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.
An advertising agency that promoted sales events on behalf of numerous Indiana motor vehicle dealerships is the subject of an Indiana Attorney General lawsuit focusing on allegedly false sweepstakes promotions. The lawsuit highlights the governments’ continued focus on direct mail sweepstakes promotions.
5-4 decision rejects traditional principles of contract interpretation
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.
As we have previously reported, California’s Consumer Privacy Act (the “CCPA”) was passed in 2018 and goes into effect in January 2020, which provides broad protections for consumers in their ability to control the use of their personal data. You can see our prior article here. On February 25, 2019, California Attorney General Xavier Becerra and Senator Hannah-Beth Jackson introduced SB 561, legislation intended to strengthen and clarify the CCPA. The Attorney General’s press release can be viewed here. Senator Jackson has stated that the bill is designed to ensure that “the most significant privacy protections in the nation are robustly enforced”.
As we have discussed in previous blog posts, subscription-based business models and the automatic renewal techniques they popularly employ have garnered attention from regulators in recent years. The District of Columbia has now passed its own law regulating automatic renewals. With the passage of this law, D.C. joins many other states in requiring specific disclosures from advertisers who utilize automatic renewals as an integral part of their business model. The law has provisions similar to those in certain states, but also has important timing requirements.
The repurposing of social media images has its risks and should only be undertaken in accordance with the platform’s terms of use and applicable law. PopSugar has been unable to shake a copyright infringement class action brought by social media Influencer and law school graduate, Nita Batra.
Reflecting California’s continuing challenge to automatic renewal programs, direct marketing firm, Guthy-Renker, agreed to settle claims brought by multiple California city and district attorneys (CART) alleging that the direct marketing firm engaged in improper automatic renewal practices with respect to its sale of ProActiv skin products and Wen hair products.
Businesses with websites have been besieged by plaintiffs seeking to assert ADA claims that e-commerce websites fail to comply with accessibility requirements. A recent Ninth Circuit decision finding that the ADA applies to websites and mobile apps strengthens these plaintiffs’ positions in what is at best a grey area for businesses to address compliance.
The Supreme Court has unanimously vacated a Fifth Circuit decision concerning arbitrability. The court held that courts my not override a contract that tasks arbitrators with determining whether a claim should be arbitrated or litigated, even in the case that the quest for arbitration is “wholly groundless.”
The recently enacted Farm Bill amends the Controlled Substances Act so that hemp and CBD products containing trace amount of THC are not classified as Schedule 1 controlled substances. While many are excited about this amendment, the law does not change FDA’s regulatory requirements for CBD-containing products under its regulatory jurisdiction.
Many online ecommerce companies operate on a subscription model. Such companies need to be cognizant of federal and state laws governing advertising and enrollment in continuous service plans. The failure to consider particular state requirements can have significant consequences given the aggressive plaintiffs’ bar. A recent federal-court approved settlement between Yahoo Inc. and users of Rivals.com highlights this exposure.
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 New York Law Journal (subscription required) published an article authored by Andrew Lustigman and Morgan Spina titled "Deceptive Pricing: Unlawful Trickery or Skillful Selling?"
Olshan Advertising attorneys Andrew Lustigman, Safia Anand, Claudia Dubón, Katelyn Patton, and Morgan Spina will give a telephonic presentation for the Consumer Protection Monthly Update on June 18, 2018, hosted by the American Bar Association. This monthly update, which will be moderated by Andrew Lustigman, will summarize the significant developments in consumer protection law that occurred during May 2018. The presentation will include cases, settlements, and other initiatives at the federal and state levels, as well as consumer class actions, Lanham Act litigation, and National Advertising Division case decisions.
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 Leading Internet Case Law entitled “Court Rules Embedded Photos on Websites May Constitute Infringement.”
Andrew Lustigman and Morgan Spina published an article in BNA Big Law Business entitled “Understanding Advertising Disclosure Obligations Within Virtual Reality.”