On May 15, 2014, Maneesha Mithal, Associate Director of the Division of Privacy and Identity Protection at the Federal Trade Commission ("FTC" or "Commission") testified, on behalf of the FTC, before the U.S. Senate Committee on Homeland Security and Governmental Affairs addressing the Commission's work regarding three consumer protection issues affecting online advertising: (1) privacy, (2) malware and (3) data security. Below is a summary of the Commission's testimony regarding these three key areas and the Commission's advice for additional steps to protect consumers.… Continue Reading
Last Thursday, the Federal Trade Commission (FTC) announced that messaging app Snapchat agreed to settle charges that it deceived consumers with promises about the disappearing nature of messages sent through the app. The FTC case also alleged that the company deceived consumers over the amount of personal data the app collected, and the security measures taken to protect that data from misuse and unauthorized disclosure. The case alleged that Snapchat's failure to secure its Find Friends feature resulted in a security breach that enabled attackers to compile a database of 4.6 million Snapchat usernames and phone numbers.… Continue Reading
In a recent letter to shoe retailer Cole Haan regarding its Wandering Sole Pinterest contest, the Federal Trade Commission (FTC) signaled a major change for promotional contests conducted through social media platforms. In the letter, the FTC determined that the Pinterest contest sponsored by the company was a form of product endorsement, subject to Section 5 of the FTC Act, which requires the disclosure of a material connection between a marketer and an endorser when their relationship is not otherwise apparent from the context of the communication that contains the endorsement.… Continue Reading
The FDA recently issued a warning to a Swiss drug company for failing to include on its Facebook page a product's risk information and limitations. Although this type of enforcement activity involving drugmaker conduct on social media has been rather uncommon, it is a stern reminder for companies that the FDA is monitoring activity, and that its marketing and advertising rules apply to product promotion over social media networks as well. For additional information on this story, read the latest post on our firm's Life Sciences Legal Update blog.… Continue Reading
In order to provide consumers with increased information to make well-informed food choices, the FDA announced today a noteworthy overhaul in the presentation of the Nutrition Facts panel on packaged foods. Among the revisions are updates to the display, including font size changes and bolded text, new serving size and nutrient content calculations, and added sugar information. The changes will have implications for the advertising industry, presenting advertisers with the opportunity to capitalize on various nutrition claims. The FDA has invited feedback on the proposed changes and will be accepting comments for 90 days. For more information, please read the recent post on our Life Sciences Legal Update blog.… Continue Reading
Our firm's LSHI Group reported on an announcement by the Food and Drug Administration (FDA) last week, asking for public input on a proposed research study concerning whether the risks presented in direct-to-consumer (DTC) prescription drug ads should be limited solely to risks that are considered "serious and actionable." While some say the current risk statements found in TV ads are too long and result in, among other things, reduced consumer comprehension, others believe the DTC ads do not provide enough risk information. The deadline for feedback is April 21, 2014. For more information, read the recent post on the Health Industry Washington Watch blog:
http://www.healthindustrywashingtonwatch.com/2014/02/articles/regulatory-developments/fda-developments/coming-to-a-tv-near-you-fda-seeks-public-input-on-limiting-risks-presented-in-directtoconsumer-television-ads/… Continue Reading
Just in time for the New Year, as thousands of people are making weight loss resolutions and searching for ways to stick to them, the Federal Trade Commission (FTC) released updated guidance for publishers and broadcasters on how to evaluate weight-loss claims when screening ads for publication. The imposition of liability on the media for deceptive claims that are published is not new, and major television networks already pre-clear advertisements to ensure that they not misleading violations of section 5 of the FTC Act. Thus, the guidance does not create new liability for publishers, but rather provides a reminder for publishers to be vigilant when it comes to weight-loss claims.… Continue Reading
The Federal Trade Commission ("FTC") will host a one-day workshop on Wednesday, December 4, 2013 to look at the issue of "sponsored content" or "native advertising," terms which refer to advertising that is blended into news, entertainment, and other content. According to the FTC, the workshop will "bring together publishing and advertising industry representatives, consumer advocates, academics, and self-regulatory organizations to explore: the ways in which sponsored content is presented to consumers online and in mobile apps; consumers' recognition and understanding of it; the contexts in which it should be identifiable as advertising; and effective ways of differentiating it from editorial content."… Continue Reading
This post was written by Christine E. Nielsen. The FCC is seeking comments on industry group petitions for clarification and forbearance on the recently amended Telephone Consumer Protection Act (TCPA) Rules. A petition filed with the FCC by a Coalition of Mobile Engagement Providers specifically seeks clarification that the revised forms of consent are only … Continue Reading
Driven by the evolution of technology and social media, brand advertisers are increasingly turning to "native advertising" -- a form of paid media in which promoted content is woven into the actual visual design, or fabric, of a website, magazine, or newspaper. The theory is that by providing ads in the context of a user's experience, and designing content that blends in with the media in which it is placed, the promoted content is less intrusive, and more likely to capture the attention of consumers.
Of course, because native advertising necessarily blurs traditional lines of editorial and advertising content, regulators have begun to more closely scrutinize the practice, and have expressed concerns about the potential for consumer deception. Earlier this year, for example, the National Advertising Division ("NAD") examined a campaign from Qualcomm, in which it ran banner ads for its Snapdragon processor adjacent to a series of articles that it had sponsored on the Mashable website. For the duration of the campaign, the banner ads included a tag indicating that Qualcomm had sponsored the articles. Once the campaign concluded, however, the tags were removed (even though the articles remained live on Mashable).… Continue Reading
Two nonprofits, the Alliance for Natural Health - USA, and TechFreedom, released a report last week alleging that the Federal Trade Commission broke free speech laws when in January 2013, it barred POM Wonderful from asserting that its pomegranate juice is "effective in the diagnosis, cure, mitigation, treatment, or prevention of any disease," including heart disease, prostate cancer, and erectile dysfunction, unless the claim is supported by two randomized, well-controlled, human clinical trials. In their report, the nonprofits estimate that the two clinical trials required by the FTC could cost up to $600 million each.
The POM order highlights the balancing act between requiring substantiation to ensure a claim is truthful and not misleading to consumers, and overly burdensome substantiation requirements that suppress otherwise truthful speech. The nonprofits' report criticizes the FTC's ruling as falling into the latter category by requiring an enormously increased level of substantiation.… Continue Reading
Back in June, FTC Commissioner Julie Brill unveiled an initiative called, "Reclaim Your Name" at the Computer Freedom and Privacy Conference. Her proposed initiative is directed to the big data industry and calls on data brokers to give consumers more control over their personal data. According to Commissioner Brill, Reclaim Your Name would "empower the consumer to find out how brokers are collecting and using data; give her access to information that data brokers have amassed about her; allow her to opt-out if she learns a data broker is selling her information for marketing purposes; and provide her the opportunity to correct errors in information used for substantive decisions - like credit, insurance, employment, and other benefits."
Commissioner Brill followed up her remarks at the Conference with an op-ed piece in the Washington Post earlier this month, again demanding transparency from data brokers. In her op-ed, Commissioner Brill likened the efforts of data brokers who collect data on surfing habits and app usage to the type of information the NSA was collecting. She also opined that "personal data could be -- and probably are -- used by firms making decisions that aren't regulated by the FCRA but still affect users' lives profoundly" and that these decisions include whether consumers are too risky to do business with or aren't right for certain clubs, dating services, schools or other programs.… Continue Reading
After recent concerns over misleading native advertising efforts in online editorial content, the FTC puts a spotlight on search engines.
On Tuesday, June 25, the FTC sent out more than two dozen letters to various search engine companies, pushing them to clearly distinguish between paid advertising content and natural Internet search results. After noticing a decline in compliance with its search engine advertising disclosure letter issued back in 2002, the FTC sent out these letters as part of its overall effort to improve digital advertising disclosures.
In the letters, the agency advised search engine companies to improve the clarity and prominence of advertising disclosures by increasing visual cues (such as more prominent shading and borders) and text labels (such as using more prominent fonts and placements of advertising disclosures) for paid search content. The FTC also noted that its guidance applies to other platforms as well, such as social media platforms that include paid advertising in user feeds. The FTC based its growing concern off various studies - most notably, a 2005 Pew Research Center survey that found 62 percent of searchers were not even aware of the distinction between paid and non-paid results.
With the evolution of social media and rapidly changing platforms for communication, differentiating natural content from paid-for advertising can be difficult for a consumer. However, the letter indicated that regardless of the form a search takes (or the platform used), paid results should be clearly distinguishable. The FTC letters were sent to both general all-purpose search engines and to smaller, more specialized search engines that are heavily trafficked.
Without clear advertising disclosures to Internet audiences, search engines could potentially be liable for unfair or deceptive practices in violation of the FTC Act. Therefore, it is integral to strike a balance between innovative advertising methods and FTC compliance.… Continue Reading
Earlier this week, FTC Chairwoman Edith Ramirez spoke to members of the ad industry, urging them to provide “effective and meaningful privacy protection” to consumers with respect to online tracking. Chairwoman Ramirez’s position reportedly surprised, and even frustrated, some attendees by implying that the Digital Advertising Alliance’s self-regulatory program does not do enough in the … Continue Reading
Yesterday, the Federal Trade Commission (FTC) released updated guidelines (PDF) for regulating unfair and deceptive trade practices in online marketing. The ".Com Disclosures: How to Make Effective Disclosures in Digital Advertising," were released in 2000, before the meteoric rise of social media marketing and the advent of smartphone advertising. As the evolution of these two areas has drastically changed the way brands communicate with consumers and blurred lines between corporate and word of mouth advertising, the FTC saw a need to extend these guidelines to cover all online, social and mobile marketing.… Continue Reading
On February 15, Chris Olsen of the FTC’s Division of Privacy and Identity Protection spoke at the National Telecommunications and Information Administration (NTIA) stakeholders’ meeting in Washington, D.C. to address its recently released Mobile Privacy Disclosures Guidance. For a full list of the meeting’s highlights, please read the latest post on our sister blog, Global … Continue Reading
This week the Federal Trade Commission (FTC) reopened and extended the deadline until March 4, 2013 to provide comments to aid the FTC in its review of the Fred Meyer Guides ("Guides"). The Guides clarify the Robinson-Patman Act of 1936 ("Act") which is intended to help small retailers compete against the larger chain stores by prohibiting anti-competitive price discrimination that could harm competition between the smaller and larger retailers. The Guides explain how manufacturers and wholesalers can provide advertising allowances and other promotional payments and services to retailers in a manner that does not discriminate and thereby run afoul of the Act which requires that such benefits must be provided on proportionately equal terms to all competing customers.… Continue Reading
On February 1, the FTC announced its largest settlement to date with a mobile app developer – an $800,000 penalty – in conjunction with the release of guidance on mobile app best practices for app platforms, app developers, third parties and app trade associations. The guidance document and the enforcement action together demonstrate the need … Continue Reading
This week, the Federal Financial Institutions Examination Council ("FFIEC") released its proposed guidance to help financial institutions understand and address the risks associated with social media activities. All banks, savings associations, and credit unions, as well as nonbank entities supervised by the Consumer Financial Protection Bureau and state regulators should review their current and expected … Continue Reading
On January 16, 2013, the Federal Trade Commission in a 5-0 vote upheld a May 2012 Administrative Law Judge's ("ALJ") decision that POM Wonderful LLC ("POM") and its owners had falsely advertised its POM Wonderful 100% Pomegranate Juice, and POMx liquid and pill supplements, by claiming that its products treat, prevent or reduce the risk of heart disease, prostate cancer, and erectile dysfunction, and that they were proven to work...… Continue Reading
On Monday, the French Internet service provider, Free, reneged on its original decision to place a default ad-blocking filter on its customers' routers after receiving pressure from advertisers and the French government. To learn more about this story, read the latest post on our Advertising Compliance blog, ReACTS.… Continue Reading
The National Telecommunications and Information Administration (NTIA) of the U.S. Department of Commerce held its latest meeting with privacy stakeholders November 30, to discuss privacy best practices for the mobile environment. We have previously blogged about some of these earlier meetings on our sister blog from our Global Regulatory Enforcement Group.
This latest meeting once again joined members of the app developer industry with members of consumer advocate and privacy groups, along with other stakeholders from government, academia, and the private sector. Discussion focused on the latest draft of the Mobile Application Transparency Code of Conduct. Some of the issues considered in this latest draft are...… Continue Reading
David Vladeck, FTC Director of the Bureau of Consumer Protection, made comments Tuesday, citing the U.S. District Court's approval of a $22.5 million civil fine against Google for violating a consent order as "a clear victory for consumers and privacy," and demonstrating that the Commission "will continue to ensure that its orders are obeyed, and that consumers' privacy is protected." The consent order settled charges that Google misrepresented privacy assurances to users of Apple's Safari Internet browser in violation of a previous FTC settlement Order.… Continue Reading