Ad Law Access

Ad Law Access

Updates on consumer protection trends, issues, & developments

Association of National Advertiser’s Advertising Law & Public Policy Conference — March 31-April 1, 2015

Posted in Advertising, Advertising Litigation, Class Action Litigation, NAD

2015_Ad_Law_Conf_email_graphic_2Join Partner John Villafranco at the Association of National Advertisers’ Advertising Law & Public Policy Conference in Washington, DC on March 31-April 1, 2015. Mr. Villafranco’s session, entitled “The Current And Future State Of Advertising Self-Regulation,” will feature the findings of an antitrust law working group formed to examine self-regulation in the advertising industry. The program will include recommendations concerning National Advertising Division and National Advertising Review Board procedures and processes as well as measures intended to better promote competition while protecting consumers.

For more information, please click here.

From FitBit to Quitbit: The Role of Federal Agencies and Consumer Electronics

Posted in Telehealth

The annual International Consumer Electronics Show (CES), held each year in early January, is a showcase for the latest gadgetry trends.  The recently-concluded CES 2015 featured innovation in a variety of forms, not the least of which are products with a health-related focus.  From the FitBit to track steps to the Quitbit to track progress in quitting smoking, the number of products recording consumer behavior continues to proliferate.

Techies and ordinary consumers aren’t the only ones interested in all things electronic, however.  Numerous government agencies have jurisdiction over these products depending on their functionality, including the Federal Trade Commission (FTC), the Food and Drug Administration (FDA), and the Federal Communications Commission (FCC).  A few products featured at this year’s CES demonstrate this intra-agency overlap.

For example, the “Breathometer Breeze Breathalyzer” features the following claims:  it can detect blood alcohol levels with the same degree of accuracy as policy breathalyzers, tell consumers when their blood alcohol content will be 0.0, and has a “home safe” function that allows consumers to call a car service or friend to help them get home safely. The product purportedly is a Class I medical device that can connect to smartphone apps via Bluetooth.

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NJ Telemarketing Cell Phone Ban Expected to Change

Posted in Telemarketing and Call Center Operations

New Jersey currently has the most restrictive law against making telemarketing calls to mobile devices, but that may change in the next two weeks. New Jersey’s legislature recently passed a bill that amends New Jersey’s current telemarketing law which prohibits nearly all telemarketing calls to mobile devices, even if a telemarketer has consent of the cell phone user.  The new bill would amend existing law by only prohibiting unsolicited telemarketing calls to mobile devices.  New Jersey’s current law defines an “unsolicited telemarketing call” as any telemarketing sales call other than a call made in response to a customer request or to an existing customer. Thus, the amendment would permit telemarketers to call mobile devices under these circumstances.

The bill, S1382, passed in both of New Jersey’s houses without much opposition, and now sits with Governor Chris Christie for approval. This bill will take effect immediately upon Governor Christie’s signature or after 45 days if no action is taken. Governor Christie has until the last week of January to either sign or veto the bill.

Join Kelley Drye at the ABA Consumer Protection Conference – February 12 in Washington, DC

Posted in Federal Trade Commission

ABA CP Conference 2015The American Bar Association Section of Antitrust Law will be presenting its biennial Consumer Protection Conference on February 12, 2015 in Washington, DC. The conference will bring together federal, state, and international enforcers, in-house counsel, social media/culture experts, and private practitioners to explore and discuss cutting-edge advertising, privacy, social media, and regulatory developments, all in an interactive and engaging format.

Kelley Drye Partner John Villafranco will moderate a panel consisting of Attorney Advisers to the current FTC Commissioners that will provide an insiders’ look at how the Commissioners approach consumer protection policy, enforcement, and advocacy and offer timely insights into the FTC’s priorities and strategic approach to fulfilling its consumer protection mission.

The conference’s agenda focuses on:

  • Evolving standards for advertising substantiation and third-party liability;
  • The convergence of international privacy norms and its effect on domestic standards;
  • The role of the FTC after its first 100 years;
  • The Internet of Things and big data from the consumer, business, government and NGO perspectives;
  • The confluence of consumer protection, media and high finance in high status direct-selling markets; and
  • The social and legal impacts of social media in the emergent Web 3.0.

For more information, including how to register, please click here.

Lew Rose Named Kelley Drye Firm Managing Partner

Posted in Kelley Drye

Rose_LewisOn January 6, 2015, Kelley Drye announced that former chair of the Advertising and Marketing Practice Group Lew Rose has been named the firm’s managing partner.  The first firm managing partner from outside of the New York office, Lew chaired the advertising and marketing practice at Kelley Drye for 12 years before assuming the role of DC office managing partner in 2013.

Under Lew’s leadership, the advertising and marketing practice group received a Tier 1 ranking in the “Advertising Law – National” and “Advertising Law – DC” categories in the “Best Law Firms” studies published by U.S. News & World Report and Best Lawyers.  In 2014, Lew was named Best Lawyers’ Washington, D.C. “Lawyer of the Year” for Advertising and Marketing Law and Kelley Drye’s DC office was named a 2014 Top Place to Work by The Washington Post and one of the Best Places to Work by the Washington Business Journal.

Additionally, Bankruptcy and Restructuring Practice Group Chair Jim Carr has been elected chair of the firm.  Jim and Lew will lead a cross-office management team that reflects Kelley Drye’s presence in six cities nationwide.

To read the full announcement, please click here.

Potential New Online Privacy and Data Security Regulation in IN

Posted in Advertising, Privacy and Information Security

The Indiana attorney general proposed legislation last Monday to impose strict requirements for the storage of sensitive data, reduce harm to consumers in the case of a data breach, and increase transparency of online privacy policies. The proposed legislation also includes an amendment to Indiana’s Disclosure of Security Breach Act. According to the Indiana Attorney General Greg Zoeller, existing online privacy and data protection laws are not tough enough. State Sen. Jim Merritt (R-Indianapolis) will sponsor the legislation during the 2015 session of the Indiana General Assembly.

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Privacy Groups Ask FTC to Investigate Contest Sponsor for Alleged COPPA Violations

Posted in Federal Trade Commission, Privacy and Information Security, Promotions Marketing, Social Media

Last week, ten privacy groups requested that the FTC open an investigation into a Topps Co. online contest, which they allege violated the Children’s Online Privacy Protection Act (COPPA). Specifically, the groups claim that Topps’s #RockThatRock contest collected photos of children under age 13 without obtaining their parents’ consent.

Last spring, Topps invited its Facebook, Twitter, and Instagram followers to post photos of themselves “rocking” a Ring Pop (the company’s edible candy lollipop) using the hashtag #RockThatRock for a chance to have their photo featured in a music video for a popular tween band. In addition to social media, Topps promoted the contest on Candymania.com – its allegedly child-directed website that features content such as candy-related games. Entrants’ photos were posted on Candymania.com, and the music video, which has appeared on YouTube since June, has received over 900,000 views.

COPPA requires that businesses provide parental notice and obtain parental consent prior to collecting the personal information of children under age 13. The definition of “personal information” was updated in July 2013 to explicitly include photographs. COPPA violations carry a hefty fine – up to $16,000 per affected child – so it’s important to always consider a promotion’s potential audience, as well as the types of information collected.

False Advertising Class Action Says Maker’s Mark Whisky is Not “Handmade”

Posted in Advertising Litigation, Class Action Litigation

Two purchasers of Maker’s Mark whisky have sued the company, accusing it of falsely advertising the whisky as “handmade”. The lawsuit, filed as a putative statewide class action in California, alleges that Maker’s Mark “promotes its whisky as being ‘Handmade’ when in fact Defendant’s whisky is manufactured using mechanized and/or automated processes, which involves little to no human supervision, assistance or involvement.” The complaint alleges that because consumers generally associate the term “handmade” “with higher quality manufacturing and high-end products” and because “manufacturers charge a premium” for those products, consumers who purchased Maker’s Mark whisky were misled to believe that the whisky was of superior quality and overpaid for the product as a result. The plaintiffs bolster their allegation that the manufacturing process is mechanized with photos and images from two YouTube videos of the Maker’s Mark distillery and factory. The class action includes anyone who purchased the product in the last four years and seeks at least $5 million in damages.

This is one of several false advertising lawsuits filed in the last two years against the food and beverage industry, which reflects a trend toward scrutiny of companies for claims about how their products are made. Just this year alone, a number of similar lawsuits to the one against Maker’s Mark were filed. For example, Tito’s Handmade Vodka was sued for false advertising based on its claim of “handmade”. Interestingly, the plaintiff in that case cited a Forbes article to describe the manufacturing process as mechanized. Additionally, Templeton Rye was sued in September for advertising its whiskey as “craft” or “small-batch”.

Alcohol products are not the only targets of these lawsuits. Two years ago, Dunkin’ Donuts was hit with false advertising complaints filed with the FTC, New York Attorney General, and the Better Business Bureau based on its claims that its bagels are “artisan”.

Companies making claims about their products’ craftsmanship and manufacturing should be prepared to substantiate and defend those claims, especially if the claims earn them a price premium.

BBB Accountability Program Warns Native Advertisers

Posted in Advertising, Privacy and Information Security

Earlier this week, the BBB’s Online Interest-Based Advertising Accountability Program announced its first compliance warning concerning the use of interest-based advertising in native advertising. “Native advertising” generally includes ads presented in the native format of the website, publication, or platform on which they appear. Although the BBB declined to mention the identity of the recipient, the warning reminds interest-based advertisers of their obligation to comply with the Self-Regulatory Principles for Online Behavioral Advertising, particularly the Principles of transparency and consumer control, even when using native advertising. Enforcement of the compliance warning will begin January 1, 2015.

The compliance warning explains that native, interest-based advertisers should provide consumers with transparency through “enhanced notice” in or around the native ad that, like the AdChoices Icon, alerts consumers that they are viewing an ad and links to more information about interest-based advertising and consumers’ ability to exercise choice by opting out. While the BBB appears to favor the AdChoices Icon, the warning notes that a clear phrase alerting consumers that they are viewing an ad may be used instead. Additionally, the warning reminds advertisers that they must give consumers control over the collection and use of their data and must honor the choices made.

Developed in 2009 by leading industry associations, the seven OBA Principles are intended to make online behavioral advertising more consumer-friendly, giving consumers knowledge of and control over the information collected about them. The Principles are (1) education, (2) transparency, (3) consumer control, (4) data security, (5) material changes, (6) sensitive data, and (7) accountability. It is important for advertisers engaged in online behavioral advertising to ensure compliance with these Principles, regardless of the technology and platform or device used.

New Jersey Offers Legislation Designed to Address Energy Supply Companies’ Variable Rate Disclosure Practices

Posted in Advertising Litigation, Class Action Litigation

In the wake of the unexpected polar vortices and extreme weather that struck the East Coast in early 2014, many state public utility commissions and attorneys general were inundated with consumer complaints relating to increases in energy supply companies’ variable rates.  Regulators took notice, opening investigations and convening public conferences in an effort to understand how suppliers advertise, market, and telemarket their various variable rate energy offerings, and to ensure that such practices do not violate state law or regulations.  Recently, the plaintiff’s bar has also taken notice and a number of class actions raising false advertising and consumer protection claims have been filed against energy suppliers.

The core allegation in these suits generally is that the suppliers’ variable rates simply were too high (although the claims are couched in terms of unfair and deceptive acts and practices, false advertising, breach of contract, etc.).  Forecasters are predicting that Winter 2014 will be as cold as the previous one, making it unlikely that the level of regulatory scrutiny and civil litigation against energy suppliers will ebb any time soon.

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