Ad Law Access : Washington D.C. Advertising Lawyer & Attorney : Kelley Drye & Warren Law Firm : New York, Chicago, Connecticut, New Jersey, Brussels

On February 29, 2012, the Food & Drug Administration (FDA) issued a notice soliciting comments on its intent to conduct research entitled “Experimental Study: Examination of Corrective Direct-to-Consumer (DTC) Television Advertising.” FDA issued the notice pursuant to the Paperwork Reduction Act of 1995, which requires federal agencies interested in collecting information to first publish notice of the proposed collection of information in the Federal Register and grant the public sixty days to comment on the proposal. FDA’s proposed research will examine how corrective advertising may impact consumer misperceptions about drug product safety and efficacy. It also follows, FDA’s December 9, 2011, notice announcing its intent to collect information for a “Experimental Study of Comparative Direct-to-Consumer Advertising.”

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Our new sister blog, Food and Drug Law Access, posted an informative article, "FDA's Scrutiny of Personal Care Products in 2011," from HAPPI -- the Household and Personal Products Industry magazine.

It is often said that “beauty lies in the eye of the beholder.” A review of Food & Drug Administration (FDA) enforcement activity in 2011 reinforces how personal care products are beheld by FDA. The article highlights important regulatory considerations for personal care product manufacturers and marketers, as evidenced by FDA enforcement activity over the past year. In light of this scrutiny, the article provides three steps that personal care product manufacturers and marketers can take to mitigate the risk of FDA enforcement action.

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On February 23, 2012, the White House released its long-awaited consumer data privacy framework that establishes clear consumer privacy “ground rules” intended to govern how commercial entities collect and use consumers’ personal information in an evolving technological landscape that includes the Internet and other networked technologies.

The framework, entitled Consumer Data Privacy In a Networked World: A Framework for Protecting Privacy and Promoting Innovation in the Global Digital Economy, includes a series of consumer privacy principles that would form the basis for voluntary but enforceable codes of conduct, positions the Federal Trade Commission (“FTC”) as the lead enforcer on consumer privacy issues, and encourages greater international cross-border collaboration. The framework builds on the consumer privacy recommendations issued in December 2010 by the Department of Commerce Internet Policy Task Force.

This Kelley Drye client advisory outlines the four primary elements of the framework and discusses how it aligns with other federal and state initiatives that will have significant implications for businesses that collect consumer personal information online.

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On February 16, 2012, Kelley Drye & Warren LLP hosted the seminar and audiocast, “Privacy in 2012: What to Watch Regarding COPPA, Mobile Apps, and Evolving Law Enforcement and Public Policy Trends.” The seminar highlighted regulatory and legislative developments in privacy and information security during the past year, with an emphasis on children's online privacy and mobile applications.

Peter Swire, a professor at The Ohio State University Michael E. Moritz College of Law and a Senior Fellow with the Center for American Progress, opened the seminar with a keynote address that gave historical context to the most recent regulatory efforts addressing consumer privacy. Professor Swire’s remarks were followed by two panel sessions that included six experts representing key industry representatives and the federal agencies integral to recent privacy initiatives. The first panel discussed children's online privacy and the Federal Trade Commission’s proposed revisions to the Children's Online Privacy Protection Rule. The second panel discussed various consumer privacy enforcement and regulatory initiatives relating to mobile apps.

For more on the seminar, including a synopsis of key takeaways, see the Kelley Drye client advisory. An audio recording of the full program is also available.

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Yesterday, the United States and the European Union announced a reciprocity agreement that will allow access to both markets for products certified organic in either market. Beginning June 1, 2012, organic products that meet the terms of the arrangement and are certified USDA organic or EU organic may be sold and labeled as organic in both countries.

The arrangement applies to products that have either been produced within the United States or the European Union, or whose final processing or packaging occurs in the United States or European Union. Fish and shellfish are not within the scope of the arrangement. The two countries will retain differences in the status of products treated with antibiotics. Organic crops of the United States (products either produced in the United States or where final processing or packing occurs in the United States) that are treated with antibiotics must not be shipped to the European Union, and agricultural products of the European Union (products either produced in the European Union or where final processing or packing occurs in the European Union) that are derived from animals treated with antibiotics shall not be marketed as organic in the United States.

We discussed progress on organic standard harmonization between the United States and Canada in a previous post.
 

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This morning, the FTC issued a report showing the results of a survey of mobile apps for children. These apps can automatically collect a broad range of information, including a user's location, phone number, contacts, call logs, and unique identifiers. However, the report notes that neither the app stores nor app developers provide the information parents need to determine what data is collected from children or how it is shared.

FTC Chairman Jon Leibowitz asked companies to “step up to the plate and provide easily accessible, basic information, so that parents can make informed decisions about the apps their kids use.” Specifically, the report recommends that:

• All members of the "kids app ecosystem" should play an active role in providing key information to parents.
• App developers should provide information about their privacy practices in simple and short disclosures. They also should disclose whether the app connects with social media and whether it contains ads. Third parties that collect data also should disclose their privacy practices.
• App stores also should take responsibility for ensuring parents have basic information. The report notes that the stores provide architecture for sharing pricing and category data, and should be able to provide a way for developers to provide privacy information.

Later this year, the FTC will host a public workshop in connection with its efforts to update the "Dot Com Disclosure" guide about how to provide effective online disclosures. "One of the topics that will be addressed is mobile privacy disclosures, including how they can be short, effective, and accessible to consumers on small screens." We will discuss similar topics in our 4th Annual Privacy Law Seminar this afternoon.

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Recent Food and Drug Administration (FDA) test results show that detectible amounts of lead continue to be found in lipstick, but do not present a safety risk to product consumers. According to the recent FDA test data, lead levels in some products have risen since FDA initiated its testing program in 2007.

Reports of lead in lipstick have surfaced periodically over the last several years. In 2007, the Campaign for Safe Cosmetics released a report stating that it had found lead in lipsticks on the market at that time. FDA conducted testing of 20 lipsticks in 2007 and found an average lead content of 1.07 parts per million (ppm). The highest range detected was 3.06 ppm. In 2010, FDA and expanded its testing to 400 lipsticks, resulting in an average lead concentration of 1.11 ppm. The lead levels of certain lipsticks rose significantly since the 2007 testing, however, with 7.19 ppm being the highest level detected. For a table of the results and further information, see FDA Analyses of Lead in Lipsticks – Expanded Survey. The expanded survey will be published in the May/June, 2012, issue of the Journal of Cosmetic Science.

FDA has not set an upper limit for overall lead content in lipstick. Color additives are limited to maximum specified levels, typically no more than 20 ppm for cosmetic products. However, FDA is assessing whether an overall lead limit is appropriate. The agency website states: “Although we do not believe that the lead content found in our recent lipstick analyses poses a safety concern, we are evaluating whether there may be a need to recommend an upper limit for lead in lipstick in order to further protect the health and welfare of consumers.”

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The FTC this week warned marketers of six mobile apps that provide background screening that the companies may be violating the Fair Credit Reporting Act (FCRA). The FTC warned the apps marketers that, if they believe that the background reports (which included criminal record histories) generated by their apps are being used for employment screening, housing, credit, or other similar purposes, they must comply with the FCRA.

Who Got the Warnings: The FTC sent these warning letters to Everify, Inc., marketer of the Police Records app, InfoPay, Inc., marketer of the Criminal Pages app, and Intelligator, Inc., marketer of Background Checks, Criminal Records Search, Investigate and Locate Anyone, and People Search and Investigator apps.

Who Should Pay Attention: The warning letters serve as a reminder that broader enforcement by the FTC of the mobile apps sector is likely to follow if mobile app providers engaged in similar practices do not take steps to comply with the FCRA.

Why: Under the FCRA, businesses that assemble or evaluate information that can be considered a “credit report” and provide it to third parties can qualify as consumer reporting agencies. Many companies are often surprised to learn that the information they assemble and/or evaluate and provide to a third party may be considered a “credit report.”

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On February 3, 2012, the U.S. Department of Agriculture's ("USDA") Agriculture Marketing Service ("AMS") published draft guidance clarifying how exemptions and exclusions from certification as a producer or handler of organic food products apply to handling operations. Under USDA regulations governing the production and handling of products labeled as "100 percent organic," "organic," or "made with organic [specified ingredients]," handling operations must be certified by a certifying agent accredited by the USDA. Handling operations include any operation or portion of an operation--except for final retailers that do not process the products--that receives or acquires agricultural products for processing, packaging, or storing. Section 205.101 of USDA regulations exempts handling operations from certification if they receive in and ship out products in the same container without opening, relabeling or otherwise handling the products. In October 2010, the National Organic Standards Board ("NOSB")--a board consisting of members of the agricultural community that advises the USDA about organic food products--recommended that the USDA clarify section 205.101's exemption limitations.

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The Agriculture Marketing Service of the United States Department of Agriculture announced an agreement reached with Canada’s Food Inspection Agency that will provide U.S. organic dairy, beef, sheep, goat and bison producers with more streamlined access to the Canadian market. Canada now considers U.S. organic requirements for access to pasture and living conditions to be equivalent to Canada’s ruminant stocking rates (number of animals in a given area). The agreement is part of the implementation of an Equivalence Arrangement the two countries entered into in 2009.

U.S. producers who provide ruminant animals with 30 percent of their feed during the grazing season from organic pasture, put animals on pasture at least 120 days per year, and provide animals with adequate space and living conditions which accommodate the natural behavior of livestock are now considered as having met the ruminant stocking rate requirement for labeling product as organic in Canada. U.S. producers are still prohibited from using sodium nitrate in the production of ruminant-derived products labeled as organic in Canada.
 

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On January 27, 2012, the Illinois Attorney General released guidance for businesses to prevent, prepare for, and respond to data security breaches. Information Security and Security Breach Notification Guidance reminds businesses and government agencies of their obligation to comply with Illinois law to guard against security breaches and provide notice in the event of an incident. The guidance identifies five (5) key principles for safeguarding information: (1) take stock; (2) scale down; (3) lock it; (4) pitch it; and (5) plan ahead.

The guidance also provides recommendations on how to prepare for a security breach including the creation of an information security program and an incident response plan. In addition, the guidance provides recommended steps for responding to a security breach, a list of requirements under the Illinois Personal Information Protection Act, and practical considerations for security breach notification. Notably, the Illinois statute was amended effective January 2012 to require security breach notifications to include: (1) toll-free numbers and addresses for credit reporting agencies; (2) the toll-free number, address, and website for the Federal Trade Commission; and (3) a statement than an individual can obtain information from these sources about fraud alerts and security freezes.

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On January 25, 2012, the Food Nutrition Service of the U.S. Department of Agriculture (“USDA”) issued a final rule that substantially modifies the menu planning and nutrition requirements for the National School Lunch Program and the School Breakfast Program. The rule, which is intended to improve the dietary habits of school children in grades K-12 and address health concerns related to child obesity, closely aligns the lunch and breakfast meal programs with the most recent “Dietary Guidelines for Americans,” published jointly by the USDA and Department of Health and Human Services and updated every five years. The final rule applies only to foods included in lunch and breakfast meals that are served in the school cafeteria and does not impact foods contained in vending machines or other sources of food at school.

The final rule represents a substantial shift in the nutritional composition and quantity of a number of food items that make up school breakfast and lunch meals and will have far-reaching implications for companies that make or market food products for use in school breakfast or lunch programs. Companies should evaluate the legal and business implications of the rule soon, as many of the changes to the nutrition quality standards are effective at the start of the 2012-2013 school year.

See the Kelley Drye client advisory for more information, and please contact us if you have questions concerning the USDA proposal or other matters.

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