Behind the Scenes

Arent Fox's advertising law blog - latest news and trends in advertising, data security & privacy, and fashion & entertainment.

Behind the Scenes
Promotions, Sweepstakes & Contests
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FTC Stops Deceptive Risk-Free Promotions of Skincare Products

On June 25, 2015, the FTC announced that it had taken action to stop a group of approximately 15 companies and 7 individuals from using allegedly deceptive “risk-free trial” offers to sell skincare products online. At the FTC’s request, the U.S. Federal District Court, Central District of California, issued a temporary restraining order against the defendants, halting their marketing practices, freezing their assets, and appointing a receiver over their business.
 

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Payment Processing, Electronic Fund Transfers & Mobile Payments, Privacy & Security - US & Abroad, Song-Beverly Act
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California Court Clarifies Scope of Song-Beverly

California’s Song-Beverly Credit Card Act does not prohibit retailers from collecting email addresses after a credit card transaction has been concluded, according to a recent ruling by a California appellate court. The decision provides some welcome clarity for retailers who engage in point of sale data collection.
 
What is the Song-Beverly Act?

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Advertising, Mobile Marketing
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September 1st Looms as Key Enforcement Deadline for Mobile Advertisers

What’s the News?
Beginning September 1, 2015, many companies that engage in mobile advertising will be subject to a new level of scrutiny by industry watch dogs. On that date, the Digital Advertising Alliance (DAA), an industry self-regulatory organization, will begin to actively enforce its guidelines for online behavioral advertising (also known as “interest-based advertising”).
 
Who Does this Apply To?

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Promotions, Sweepstakes & Contests
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Running a Prize Promotion? Don’t Run Into Trouble
What’s the News?
 
The Federal Trade Commission (FTC) recently obtained a temporary injunction to stop a Florida-based sweepstakes operation that has taken more than $28 million from consumers in the United States and abroad. The defendants used deceptive practices to defraud consumers in connection with false prize notifications.
 
FTC & Prize Promotions
 
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Promotions, Sweepstakes & Contests
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FTC Takes on Fraudulent Crowdfunding Campaign

What’s the News?
 
The Federal Trade Commission (FTC) recently announced the settlement of a complaint alleging deceptive trade practices in relation to a crowdfunding campaign. According to the FTC, the campaign’s organizer failed to live up to various promises made during the campaign, including promises pertaining to the rewards that individuals contributing funds (commonly known as “backers”) would receive in return for their contributions and how donated funds would be used. The case—the FTC’s first involving crowdfunding—is a clear signal to those engaging in the popular fundraising strategy of the importance of making good on all promises and representations made to backers.  
 
More on Crowdfunding and the Settlement
 

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Supreme Court to Decide Whether Victim of Privacy Breach Can Recover Damages Without Showing Harm

There is a split among circuit courts over whether a company faced with a privacy breach is subject to liability where a consumer suffers no discernible harm. The Supreme Court will hear a case this fall, Spokeo, Inc. v. Robins, that will settle this important issue. The Court’s decision in Spokeo, expected in 2016, will likely have far-reaching implications for consumer privacy and data breach lawsuits filed under a number of federal statutes.
 
Plaintiff Thomas Robins filed a putative class action against Spokeo in federal court in California under the Fair Credit Reporting Act (FCRA), claiming that Spokeo willfully violated the FCRA by disseminating inaccurate information about him on its website. The district court dismissed Robins’s complaint for lack of standing, reasoning that Robins failed to allege any actual harm that was traceable to Spokeo’s alleged statutory violations. 
 

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Big Brother for Hire: FTC Cracks Down on Consumer Tracking Company

What’s the News?
 
The Federal Trade Commission (FTC) sent a new warning for companies engaged in geolocation tracking. Specifically, the FTC recently reached a settlement agreement with Nomi Technologies (Nomi), a company that offers services allowing retailers to track the movements of customers in and around their stores. The FTC claimed that Nomi engaged in unfair and deceptive practices by failing to provide an opt-out for consumers subject to the tracking, despite contrary assurances in the company’s privacy policy.
 
Nomi’s Tracking Technology
 

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Advertisers Beware: New FTC Guidance Signals Tough Stance on Endorsements

The Federal Trade Commission (FTC) recently released new guidance regarding the use of endorsements in advertising. The new guidance is a “must read” for marketers that feature endorsements from celebrities or consumers in their advertising, as well as for any companies that operate contests or sweepstakes on social media.
 
What is an Endorsement?

An “endorsement” is an advertising message (including verbal statements, demonstrations, or depictions) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser. Under the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising (Endorsement Guides), endorsements must reflect the honest opinion of the endorser and can’t be used to make a claim that the product’s marketer could not legally make on their own.
 

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Advertising
When Inaccurate Simulations Lead to Litigation and Settlements

What’s the News?
 
Publisher Sega of America, Inc. (Sega) and developer Gearbox Software, L.L.C. (Gearbox) are involved in a battle centered around Aliens: Colonial Marines (ACM), a videogame based upon the hit film Aliens.  The case is one involving unmet expectations – advertising and demonstrations that did not accurately reflect the final product. 
 
Factual Background
 

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Privacy & Security - US & Abroad
Agreement Reached on Sale of Consumer Data in RadioShack Bankruptcy

What’s the News?
 
A US Bankruptcy Judge recently approved the sale of a package of RadioShack’s intellectual property assets—including consumer data obtained from RadioShack customers—to General Wireless Inc., the hedge fund affiliate that acquired over 1,700 RadioShack stores in February. The sale was not without controversy.

Major technology companies Apple, Inc. and AT&T Mobility Inc., as well as state and federal regulators, flagged concerns about the disposition of consumer data through the iconic technology retailer’s unwinding. In order to resolve these issues, the agreement approved by the judge places strong limitations on the consumer data that RadioShack will convey to General Wireless. Given that bankruptcy law imposes relatively few limitations on the transfer of consumer data, the conditions placed on this sale could become a standard to which other courts look for guidance.
 

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