FTC’s Proposed New Rules for Businesses Selling Subscriptions Heighten Compliance Obligations, published in The New York Law Journal
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.
Title III of the Americans with Disabilities Act (the “ADA”), 42 U.S.C. §§ 12181, et seq., prohibits discrimination against individuals “on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation." Among other things, ADA Title III requires places of public accommodation and other commercial facilities—restaurants, movie theaters, hotels, and other businesses—to be designed, constructed, and altered in a manner that permits broad accessibility to persons with disabilities, and provides individuals with a private right of action for discrimination in violation of its regulations. Remedies for discrimination in violation of ADA Title III include injunctive relief compelling compliance with ADA accessibility standards, as well as reasonable attorney’s fees awarded to a successful plaintiff.
Juice Joint facing catastrophic liability after jury decides against it on the merits
Faced with a series of class-action lawsuits over its Joint Juice drink, Premier Nutrition Corp. has lost the first jury trial and is now fighting back against what could be a devastating financial blow if it loses a post-trial motion scheduled to be heard next month in the Northern District of California. The company was found by a jury to have falsely touted the health benefits of the drink, so the issue is no longer whether the claims were defensible, but how much the marketer will have to pay to the class of purchasers.
FTC likely to eliminate the exemption
The Federal Trade Commission (“FTC”) is considering a proposed amendment to the Telemarketing Sales Rule (“TSR”) that would broaden the rule’s scope by prohibiting material misrepresentations and false or misleading statements in business-to-business (“B2B”) transactions.
Source: NAAG Press Release
The National Association of Attorneys General (“NAAG”) sent a letter to the Federal Communications Commission (“FCC”) on behalf of 41 states’ attorneys general commending the FCC for its leadership in combatting robocalls and sharing their commitment to working collaboratively with the FCC via information-sharing agreements. The lead states in this effort are Colorado, Tennessee and North Carolina.
Facebook joins Amazon in pursuing reviews for sale
Facebook, through its parent company Meta, has filed a federal lawsuit against a company that allegedly produces and sells fake reviews and feedback for ads designed to increase an advertiser’s Facebook Customer Feedback Score. The lawsuit was filed in the Northern District of California against Chad Taylor Cowan of Australia, who does business under the name Customer Feedback Score Solutions.
TCPA liability reduced to $500 for Gold’s Gym
A recent ruling out of the Central District of California will prove to be very useful for telemarketers faced with class actions under the Telephone Consumer Protection Act (“TCPA”). In Bustillos v. West Covina Corporate Fitness, Inc., United States District Judge Stanley Blumenfeld, Jr. denied an order seeking class certification where it was clear that the call in question violated the TCPA.
FTC's recent actions regarding earnings claims makes clear that the agency is focused on challenging earnings claims, particularly those that are atypical.
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.
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.
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.
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
Olshan partners Steve Wolosky, Andrew B. Lustigman, Thomas D. Kearns, Eric L. Goldberg, Stephen L. Ferszt and of counsel Samuel P. Ross have been selected by their peers for inclusion in The Best Lawyers in America© 2019.
Following up on other states recently enacting additional restrictions on automatic renewal provisions, on May 28, 2018, Vermont House Bill 593, an omnibus consumer protection bill, was allowed to go into effect without the signature of Governor Phil Scott, making Vermont the first state to require a “double opt-in” with respect to automatic renewal provisions.
Issue of Ascertainability Blocks Plaintiff From Proceeding On Class Basis
Andrew Lustigman, head of Olshan’s Advertising, Marketing & Promotions Practice Group, was quoted in Luxury Daily and Mobile Marketer on what the future of net neutrality—which protects online data from potential discrimination by Internet Service Providers (ISP’s) or by the government—could hold for digital marketers and consumers alike, especially in light of the recent appointment of Ajit Pai, an opponent of net neutrality, as the new FCC Chairman.
Companies and advertisers need to ensure that any “Made in USA” claims they make are not misleading, as the FTC has increased scrutiny of such claims.
Is there a constitutional right to social media? The ongoing dialogue surrounding First Amendment concerns born out of the Internet and social media was the focus of Supreme Court oral arguments on Monday, February 27, 2017. Discussing a North Carolina law that prohibits registered sex offenders from participating in social media sites like Facebook and Twitter, the justices’ comments seemed to suggest a likelihood that they would strike down such a law on First Amendment grounds.
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.
Olshan lawyers Andrew Lustigman and Safia Anand authored an article published in the New York Law Journal’s Fashion Law Report on September 12, 2016, entitled “Legal Pitfalls for Fashion Brands in Social Media.”
On September 26-27, 2016 the Advertising Self-Regulatory Council held their NAD Annual Conference.
On September 22-23, 2016 and October 19-20, 2016 Practising Law Institute presented “Advertising Law Institute 2016” in Chicago, IL and San Francisco, CA respectively.
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.
Olshan Advertising Partner Andrew Lustigman was quoted by Digiday, a New York-based online publication that covers the digital marketing industry, on legalities involved in marketing junk food to kids through McDonald’s new VR Happy Goggles.
Bloomberg BNA Electronic Commerce & Law Report published “Social Media Considerations for Real Estate Companies” authored by Olshan Partners Andrew Lustigman and Mary Grieco.
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.
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.
Direct marketers have long been the focus of the Iowa Attorney General’s office. This scrutiny has now expanded to focus on companies that provide goods or service to marketers, particularly involving psychic or sweepstakes-related promotions. While many believe this scrutiny to be misplaced, suppliers nevertheless need to be vigilant with respect to their business practices with respect to their clients’ marketing 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.
Eighth Circuit Rules On “Survey” Used To Promote Movie
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.
FCC schedules a vote on the commissioner’s proposals for June 18th.
Olshan Partner Andrew Lustigman and Associate Mason Barney Discuss Recent Actions for how Companies Approach Cybersecurity.
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.
Oral arguments scheduled for October; Decision likely in 2016
Andrew Lustigman was an Editor for Self-Regulation of Advertising in the United States: An Assessment of the National Advertising Division.
Olshan Partner Andrew Lustigman authored an article published by Inside Counsel entitled, "An overview and the impact of the Consumer Privacy Bill of Rights."
Partners Andrew Lustigman and Howard Smith authored an article published by Inside Counsel entitled, "When self-regulatory remedies can be the better alternative."
Andrew Lustigman and Scott Shaffer Discuss TCPA Lawsuits and Implications on Telemarketers in new Inside Counsel article.
Proposal would require online merchants to change the way they do business.
Inside Counsel article on COPPA Ramifications.
Inside Counsel article on using online reviews as advertising
As typically the consumer facing entity, the manufacturer has potential exposure from regulators and consumers alike for disseminating potentially unsupported claims.
Andrew Lustigman writes for Financier Worldwide: "False advertising challenges in the US: A potential alternative to courtroom litigation."
In Carrera v. Bayer Corporation, decided August 21, 2013, the Third Circuit Court of Appeals issued an important ruling making class certification more difficult to achieve in certain consumer class actions.
Andrew Lustigman and Howard Smith served as contributing authors on the chapter "Efficiently Stopping False or Unsubstantiated Competitive Advertising" in the recent edition of Recent Developments in Advertising Law: Leading Lawyers on Applying Traditional Laws and Policy Guidance to Emerging Technologies and Advertising Media.
As class actions and other forms of litigation continue to plague corporate America as a major cost of doing business, businesses should be cognizant of one potent antidote that has repeatedly received judicial approval: mandatory arbitration clauses.
Olshan counsel Jonathan I. Ezor recently published an opinion piece in Long Island Business News regarding online privacy and small business.
The FTC is seeking comments on the benefits and cost of the Textile Labeling Rules, as well as other issues.