Regulatory - United States

There has been a proliferation of wearable devices hitting the market, such as Google Glass, Fitbit and others, all with the ability to collect data and track behavior. These “wearables” have begun to receive some scrutiny by senators and regulators, including New York’s senior senator Chuck Schumer, who recently urged the FTC to push fitness device and app companies to provide users with a clear opportunity to “opt-out”, since personal information may be potentially sold to third parties without the users’ knowledge or consent. For additional information on this story, please read the latest post on our firm’s Global Regulatory Enforcement Law Blog.
Continue Reading Wearable is the New Black (and Latest Privacy Risk)

Last month, Snapchat reached a settlement with the Maryland Attorney General over alleged deceptive trade practices regarding Snapchat’s marketing claims that user “snaps” disappear forever. In addition, the Attorney General alleged that Snapchat had violated the Children’s Online Privacy Protection Act (COPPA). This settlement follows a similar settlement between Snapchat and the Federal Trade Commission, which we reported on previously.

After announcing the settlement, Attorney General Douglas F. Gansler said that “despite Snapchat’s marketing claims to the contrary, no company can fully prevent content you send to someone else from being copied, shared or posted online[.]” Attorney General Gansler went on to state that companies operating online or through mobile devices have a responsibility to safeguard user privacy and to be transparent about the information they collect. According to Attorney General Gansler, Snapchat misrepresented to consumers that pictures and video messages sent using the Snapchat mobile application are only viewable temporarily, when in fact they can be captured by the recipient for future viewing or circulation. As a result of these representations, some Snapchat mobile application users may have sent pictures or video messages they would not have sent were these risks adequately disclosed. The Attorney General further alleged that Snapchat secretly collected information from users’ contact lists without their consent, and that Snapchat failed to comply with COPPA by knowingly collecting the personal information of children under the age of 13 without verifiable parental consent.
Continue Reading Snapchat Settlement with MD AG Marks Latest State-Level Privacy Enforcement Action

Sniffing something fishy in the sea of consumer reviews, the National Advertising Division (NAD) snapped its jaws at advertising claims made in television commercials, infomercials, and on the Web by Euro-Pro Operating for its Shark brand vacuum cleaners. The advertising was brought to the NAD’s attention by competing vacuum cleaner manufacturer, Dyson, Inc. The claim at issue was:

“America’s Most Recommended Vacuum Brand.*

*Based on percentage of consumer recommendations for upright vacuums on major national retailer websites through August 2013, U.S. Only.”

What was special about this case was that Euro-Pro sought to substantiate its “most recommended” claim on aggregated consumer reviews.

The first issue was, what did the claim really mean? Dyson said it meant that the Shark is the most recommended vacuum among vacuum cleaner owners, nationwide, and that the claim communicated a comparative message, namely that the Shark was recommended over other brands. Euro-Pro, on the other hand, thought the claim was as clear as Caribbean water: the Shark is “America’s Most Recommended Vacuum Brand” “based on percentages of consumer reviews for upright vacuums on major national retailer websites through August 2013.” There was nothing comparative about the statement, according to the advertiser. Interestingly, the NAD tended to side with the advertiser’s interpretation, namely that the claim “America’s Most Recommended Vacuum Brand*” reasonably conveyed a message that Shark is the most recommended vacuum brand among American vacuum cleaner consumers. However, it interpreted the asterisked second part of the claim to be an explanation of how Euro-Pro sourced the data on which it based its claim. So, the Shark wins, right? Not so fast.
Continue Reading NAD Jumps the Shark on Use of Consumer Reviews as Substantiation

The FTC released its report “Data Brokers: A Call for Transparency and Accountability”, which calls for more transparency and accountability from the companies that collect, resell or share consumers’ personal information, generally known as data brokers. While the report mentions some of the benefits of these companies, it strongly emphasizes their associated risks, noting that data brokers often store delicate consumer information, potentially exposing consumers to fraud, theft, and other types of consumer harm. One of the FTC’s key findings was that consumers have little access or control over their information once it is provided to data brokers, sparking a call for legislative action for increased transparency and accountability. For more information on this issue, please read the latest post on our Global Regulatory Enforcement blog.
Continue Reading FTC Calling for Legislation in Recent Report on Data Brokers

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 Online Advertising Targeted by Federal Trade Commission

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 FTC Settlement with Snapchat – What Happens on Snapchat Stays on Snapchat?

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 FTC Has User Generated Content on the Run

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 FDA to Drug Companies: We Are Watching – Even on Social Media

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 FDA Makes Changes to Nutrition Facts Label

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 Should Prescription Drug Risks Be Limited in TV Commercials? The FDA Wants Your Opinion