Calling all #influencers: that promotional post may attract more attention than you bargained for with your brand if you fail to use required disclosures. With several enforcement actions against companies, assistance from Instagram’s new paid partnerships tool, and the first ever complaint directly against social media influencers, the Federal Trade Commission has made it clear that they are fed up with deceptive endorsements.
Blog Posts by Daniel B. Jasnow
Instagram has a message for social media Influencers: the Wild West is coming to an end. The popular photo-sharing platform is rolling out a new tool that will make it easier to tag and track paid commercial content. The tool offers a potential replacement for the much loathed “#ad” disclosure, but it also signals a coming crackdown on Influencer posts.
An Illinois federal court recently awarded the Canadian retailer Moose Knuckles a $52 million default judgment related to claims of trademark infringement, counterfeiting, and cybersquatting by 26 Chinese defendants. The case offers a useful roadmap for companies that are trying to crack down on anonymous foreign infringers.
What’s the News?
The enactment of new Federal Aviation Administration (FAA) regulations governing unmanned aircraft systems – or “drones” – has companies and consumers alike dreaming of the stuff of science fiction, but if the new regulations are any indication, the FAA is in no rush to see those dreams become reality. While the drone regulations permit use of drones for a variety of commercial purposes, the FAA declined to clear the way for package delivery by drone.
Social media disclosures may cause heart palpitations for advertisers and copywriters, but the Federal Trade Commission isn’t backing down. A recent settlement involving Lord & Taylor provides another important reminder that the FTC is scrutinizing social media campaigns and that proper disclosures are required, even if you only have 140 characters to do it in.
Nike Inc. (Nike) recently agreed to pay more than $2.4 million to settle a class action lawsuit related to the Nike FuelBand activity tracker. The lawsuit, Levin v. Nike, was filed May 17, 2013, in California Superior Court in Los Angeles County. The Plaintiffs alleged violations of California unfair competition and false advertising laws, as well as breach of warranty.
The FuelBand Advertising Claims
The Plaintiffs’ allegations center around claims made in connection with the Nike FuelBand, which is a wristband activity tracker. Specifically, advertising for the FuelBand suggests that the product is capable of tracking every calorie burned and step taken by a FuelBand user. The complaint singles out the following claims:
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?
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?
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.
With the release of the Apple Watch, a number of companies are likely to grapple with an increasingly common problem: how to secure sensitive company data and information in the age of wearables.
The Apple Watch may be the most high-profile wearable to hit the market, but wearables – electronic devices that are connected to the Internet – are an increasingly common tool for consumers. This trend is only expected to increase, with some analysts dubbing 2015 the “year of the wearable.”
The international skin care and cosmetics company Mary Kay is hitting back against what it is calling a “fraudulent couponing scheme” operated by the online digital coupon marketplace, RetailMeNot. Earlier this month, Mary Kay filed a federal lawsuit against RetailMeNot (RMN) alleging that RMN’s online coupon business violates federal trademark and advertising laws, as well as federal and state unfair competition laws.
At the heart of Mary Kay’s complaint is the company’s direct-sales business model. Since it was founded in 1963, the company has sold its products exclusively through a network of independent contractors known as Independent Beauty Consultants (IBCs), who then sell the products directly to consumers through direct sales channels such as house parties and personal websites. IBCs are not permitted to sell products through retail channels or brick and mortar establishments, and Mary Kay does not sell products directly to consumers.
For the first time, the Better Business Bureau (BBB) has added guidance on negative option billing plans to its “Code of Advertising.” The Code governs advertising disputes for the 112 BBB chapters in the US and Canada. Although the BBB is best known for disputes through the National Advertising Division (NAD), the BBB’s local chapters last year dealt with more than 10,000 advertising disputes and the BBB reports that complaints about negative option plans alone number in the thousands annually.
What’s the News?
The Federal Trade Commission (FTC) recently clarified that its jurisdiction under the Children’s Online Privacy Protection Act (COPPA) does not extend to information collected by state governments or most nonprofits in connection with online educational testing. The FTC reiterated that the primary goal of COPPA is to protect children’s privacy with respect to the online collection of personal information by commercial entities.
Under COPPA, websites and online services that are “directed” to children under the age of 13, as well as general interest websites that have actual knowledge that they are collecting personal information from children under the age of 13, must provide notice of their data collection practices and obtain verifiable parental consent before collecting, using, or disclosing the personal information of children.
Last week, the Footwear Distributers and Retailers of America (FDRA) hosted a briefing on cybersecurity trends in the retail industry. In light of the high-profile data breaches in 2014 — including many at the retail level — the briefing aimed to inform the footwear industry on the nature of today’s cyber threats and the way to most effectively secure private information.
The Federal Trade Commission (FTC) released a report this week examining the privacy and security implications of the so-called “Internet of Things.” The Internet of Things (IoT) refers to the ability of everyday objects to connect to the Internet and to send and receive data. As the number of connected devices has surged in recent years, the FTC has signaled a strong interest in the IoT and repeatedly warned businesses to be mindful of consumer privacy and security when developing new products.
Recent guidance from Hong Kong’s Privacy Commissioner suggests that Hong Kong may be on the verge of implementing major new restrictions on the cross-border transfer of personal data. The recent guidance concerns a law known as the “Personal (Data) Privacy Ordinance” (PDPO) that has been on the books for 20 years but has never been implemented.
Under the PDPO, the cross-border transfer of personal data from Hong Kong is prohibited unless certain exceptions apply, or the data are transferred to countries with similar data protection standards. Despite being on the books for two decades, the PDPO has never been implemented because of concerns over its potentially disruptive impact on international commerce.
What’s the News?
TRUSTe, Inc., a major provider of privacy certifications for online businesses, recently settled with the Federal Trade Commission (FTC) over charges that it has been engaging in deceptive business practices. The FTC alleged that TRUSTe was misrepresenting the frequency of its recertification reviews of participating businesses, as well as its own corporate status. News of the settlement serves as a reminder to online businesses of the need to ensure compliance with applicable privacy laws and industry best practices.
What’s the News?
In October 2014, California Attorney General Kamala Harris released the California Data Breach Report, the state’s most recent analysis of data security threats facing businesses and consumers. The Report, which notes a dramatic 28 percent increase in data breaches in California in 2013, serves as a reminder to businesses nationwide of the constant threat of increasingly sophisticated cybercriminals — and the need for new and better approaches to safeguarding sensitive information.
What Made News?
Ikea recently argued that a class action filed against it based on alleged violations of California’s Song-Beverly Act should not be maintained. Ikea admits that its sales registers prompt sales associates to collect ZIP codes from consumers, but it argues that associates often bypass the prompt. Because it does not have a policy to collect ZIP codes, Ikea claims that it cannot be held liable for the alleged illegal ZIP code collections.
Details of the Case
Consumers across the country have become accustomed to cashiers’ requests for ZIP codes, phone numbers, or other information at the point of sale. Although the requests are permitted in some states, other states — in particular, California — have strict laws prohibiting retailers from requesting personal information from customers paying with credit cards except in certain limited circumstances.
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