Advertising Law Blog

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.

Without waiting for new federal laws or federal regulators to take action against drip pricing, California is once again leading the way by enacting “Hidden Fee Statute” SB 478, which prohibits businesses from advertising or listing a price for a good or service that does not include all required fees or charges other than certain taxes (such as sales tax) and shipping costs. While this law applies to California sales, given the borderless nature of ecommerce, the mandatory pricing disclosure law will likely impact many businesses, particularly those that use the internet for sales.

The Consumer Financial Protection Bureau (“CFPB”) has survived a Supreme Court challenge that threatened to render its source of funding unconstitutional. In CFPB v. Community Financial Services Assoc. of America, the Supreme Court, by a ruling of 7-2, approved the ability of the Federal Reserve to provide operational funds to the CFPB. Opponents of the CFPB unsuccessfully argued that the only permissible means of funding should be a congressional appropriation.

In a number of recent high profile cases, the U.S. Department of Justice’s Fraud Section, together with agents from the U.S. Postal Inspection Service, have been targeting fraudulent mail solicitations scams in the U.S. On May 31, 2024, a federal jury in Colorado returned guilty verdicts against two former senior officers of the Epsilon corporation who were charged with selling consumer lists to fraudsters targeting the elderly and vulnerable. The consumer mailing lists provided by the executives to the fraudsters were then used to send scam letters to the victims promising large prizes or falsely personalized astrological mailings promising wealth.  In order to convict, the jury had to find that the two executives knew that the mailing lists would be used in the fraud scams. The case represents an expansion by the government in the scope of those charged in false mailing schemes, beyond the actual perpetrators, seeking to charge all those who knowingly aid and abet these schemes, and not just the mailers.

The failure to comply with National Advertising Division (“NAD”) review processes typically results in a referral to the Federal Trade Commission (“FTC”). This strong enforcement deterrent results in a reported 97% compliance rate with NAD decisions. Recently, NAD has been expanding the agencies to which it refers advertisers that have failed to comply with its rulings or participate in its processes. As discussed below, NAD recently referred the advertising claims of a crisis pregnancy center to the Massachusetts Attorney General for possible enforcement action. In addition, NAD has developed a referral relationship with leading social media platforms, such as Meta, resulting in prompt enforcement of NAD’s recommendations.

Click here for the May 2024 Newsletter

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.

I recently had the privilege of co-presenting on legal issues involving “green” claims at ACI’s 2024 Food Regulation Conference. A notable developing trend that was discussed during our panel is the increasing scrutiny of aspirational environmental benefit claims, such as a pledge to be carbon free by 2050. 

Chair of Olshan’s Intellectual Property Law Group and Co-Chair of the firm’s Brand Management & Protection Group Mary Grieco and litigation counsel Katherine Mateo published an IPWatchdog article entitled “The Rise of IP Lawsuits When Posting Images: How to Navigate and Avoid Copyright Infringement Issues.” In the article, Mary and Kat discuss how the unlicensed use of another person’s photograph, even if that photograph is of yourself, comes with potentially robust legal ramifications.

The Federal Trade Commission (“FTC”) has amended the Telemarketing Sales Rule (“TSR”). The simplest change is the expansion of the TSR to explicitly cover all business-to-business (“B2B”) telemarketing and artificial intelligence-enabled calls, which takes effect on May 16, 2024. Oddly, the only B2B calls previously covered by the TSR were those selling office and cleaning supplies.