Advertising Law Blog

FTC’s Proposed New Rules for Businesses Selling Subscriptions Heighten Compliance Obligations, published in The New York Law Journal

The National Advertising Division’s (“NAD”) streamlined Fast-Track SWIFT (Single Well-Defined Issue Fast Track) process is an expedited process by which single-issue truth in advertising claims in national advertising may be reviewed and assessed. The popularity of SWIFT challenges, which are structured to resolve designated challenges expeditiously, has been continuing to grow as competitors take advantage of the streamlined process.

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Rulemaking (“NPRM”), proposing several specific changes to the Negative Option Rule, as the existing rule was woefully out of date.

Defendant disputes the factual basis for the precedential ruling

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group, will speak on the panel “Evolution of Food Advertising and Marketing: From Print Ads to Social Media to the Metaverse” as part of ACI’s 7th Annual Summit on Food Law – Regulation, Compliance and Litigation on April 19, 2023, at 10:30am at The Metropolitan Club, Chicago, IL.

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.