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

A group of mobile content providers has agreed to settle class action lawsuits involving claims that they charged wireless subscribers for mobile content without authorization. Over the past few years, various companies have faced similar complaints. In the typical scenario, consumers are enticed by ads that prominently offer free content, but costs associated with that content are relegated to the fine print.

In recent years, the Florida Attorney General has been particularly aggressive in challenging companies that failed to adequately disclose the costs associated with “free” offers. These companies have each had to pay at least $1 million to settle the investigations. In the most recent settlement, the AG even set forth specific guidelines about how disclosures must be made.

Marketers need to clearly and conspicuously disclose costs so that consumers know what they are obligated to pay. If a consumer is surprised about a bill, he is likely to complain, and those complaints often lead to lawsuits or investigations. Marketers should look to the MMA Guidelines and the settlements in Florida for tips on how to make the required disclosures.

Although the subject of the current case isn’t new, the price tag is. The content providers will reportedly have to establish a $9 million fund to pay all claims of settlement members, and pay attorney’s fees of up to $1.85 million. This demonstrates that there can be a high cost associated with failing to comply with legal requirements and best practice guidelines.

• Email This
• Print
• Share Link

This week, the Mobile Marketing Association released the latest version of its U.S. Consumer Best Practices Guidelines for Cross-Carrier Mobile Content Services. The guidelines are the industry standard for cross-carrier mobile content services such as text messaging (SMS), multimedia messaging (MMS), shortcode programs, Interactive Voice Response (IVR), and mobile Web.

Major updates and additions include: (a) new guidelines for affiliate marketing for premium rate programs, with examples; (b) new guidelines to ensure STOP and HELP keywords work in each program’s native language; and (c) updated guidelines to ensure clarity for all members of the mobile marketing ecosystem. According to the MMA's press release, the new version of the Guidelines also features a new format for faster navigation, using tiered sections such as General Guidelines, Standard Rate, Premium Rate, and Free to End User Programs. 

As we've advised in previous posts (click here, for example), mobile marketers should consult the MMA's Guidelines when developing and executing their mobile campaigns. Failure to follow the Guidelines can lead to regulatory investigations and lawsuits.

• Email This
• Print
• Share Link

In a post last month, we noted that a Chicago court had held that SMS messages that are sent to a consumer without the consumer’s consent could violate the Telephone Consumer Protection Act (the “TCPA”). Since then, another court has come to the same conclusion. In the most recent case, Twentieth Century Fox sent text messages to various consumers to advertising the release of its Robots movie on DVD. A consumer who received the text messages without having signed up for them filed a lawsuit alleging that that text message campaign was unlawful.

The TCPA applies to certain types of “calls.” Although the term “call” is not defined, the FCC has opined that the statue covers both voice calls and “text calls” using SMS. The court found this interpretation to be reasonable and, therefore, held that the text message campaign was subject to the TCPA. The court also rejected the notion that the TCPA only prohibits calls that result in a charge to the recipient.

The TCPA generally prohibits the use of an automatic telephone dialing system (“ATDS”) to place calls to a mobile number without the “prior express consent” of the recipient. An ATDS is equipment that has “the capacity to store or produce telephone numbers to be called, using a random or sequential number generator and to dial such numbers.” The court held that it is not necessary to prove that the sender actually used the equipment’s automatic capacity, only that the equipment had that capacity.

Once again, the lesson is clear: mobile marketers must get consent before sending text messages to consumers. Without consent, lawsuits are sure to follow and, as the recent decisions suggest, an argument that text messages aren't subject to the TCPA is likely to fail.

• Email This
• Print
• Share Link

A federal district court in Chicago recently held that SMS messages that are sent to a consumer without the consumer’s consent could violate the Telephone Consumer Protection Act (the “TCPA”). The decision echoes many of the conclusions in a previous Ninth Circuit opinion and underscores the importance of getting express consent from consumers before sending SMS messages.

The TCPA applies to certain types of “calls.” Although the term “call” is not defined, the FCC has opined that the statue covers both voice calls and “text calls” using SMS. The court found this interpretation to be reasonable and, therefore, held that the text message campaign was subject to the TCPA. The court also rejected the notion that the TCPA only prohibits calls that result in a charge to the recipient.

The TCPA generally prohibits the use of an automatic telephone dialing system (“ATDS”) to place calls to a mobile number without the “prior express consent” of the recipient. An ATDS is equipment that has “the capacity to store or produce telephone numbers to be called, using a random or sequential number generator and to dial such numbers.” The court held that the plaintiff was not required to prove that the sender actually used the equipment’s automatic capacity, only that the equipment had that capacity.

Mobile marketers would be well-advised to get express consent before sending text messages to consumers. Unless they get consent, marketers are likely to face complaints, lawsuits, and significant settlement costs. To avoid becoming a target of these types of lawsuits, marketers should consult with their legal counsel and review the Mobile Marketing Association Consumer Best Practices Guidelines for tips on getting consent.
 

• Email This
• Print
• Share Link

On March 10, Kelley Drye will host an encore presentation of the seminar, "A New Legal Frontier for Social Media," at our New York office.

The legal landscape for social media and user-generated content is changing. Make sure you understand the risks and rewards. Companies engaged in blogs, social networking, and other types of interactive marketing campaigns face increased scrutiny in light of recent cases and sweeping changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising. These developments have increased the scope of activities and content for which advertisers may be liable.

Join the Association of Corporate Counsel and Kelley Drye for a discussion about the important legal issues and best practices for leveraging social media. Topics will include:

• Ways that companies are using social media in the form of sweepstakes, contests, blogs, wikis, and other promotions involving user-generated content;
• Legal risks and the impact of recent cases and the FTC Guides on your advertising and marketing campaigns; and
• Practical advice on how to minimize legal liability associated with social media websites and campaigns with user-generated content.

SPEAKERS:

David J. Ervin
Partner, Kelley Drye & Warren LLP
Advertising and Marketing Practice

Gonzalo E. Mon
Associate, Kelley Drye & Warren LLP
Advertising and Marketing Practice

Josephine Belli-Marinos
Associate General Counsel & Litigation Counsel
Combe Inc.

Reginald M. Rasch
General Counsel
LinkShare

WHEN:  March 10, 2010, from 3:00 - 5:00 PM

WHERE:  Kelley Drye, 101 Park Avenue, 27th floor, New York, NY, 10178

REGISTER:  email admin@accgny.com
 

• Email This
• Print
• Share Link

As more companies engaged in mobile marketing last year, many struggled to figure out how laws written before mobile phones existed apply in the wireless world. Consequently, 2009 saw some significant legal challenges against mobile campaigns. The biggest problems had to do with failure to disclose offer terms or get consent, and two cases, in particular, will have a significant effect on campaigns in 2010.

An article written by Gonzalo Mon on page 37 of Mobile Marketer’s Mobile Outlook 2010 discusses some of the top legal issues in 2009 and provides tips to help marketers avoid those problems in 2010.
 

• Email This
• Print
• Share Link

On February 9, Kelley Drye will host the seminar, "A New Legal Frontier for Social Media," at our New York office.

The legal landscape for social media and user-generated content is changing. Make sure you understand the risks and rewards.  Companies engaged in blogs, social networking, and other types of interactive marketing campaigns face increased scrutiny in light of recent cases and sweeping changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising. These developments have increased the scope of activities and content for which advertisers may be liable.

Join the Association of Corporate Counsel and Kelley Drye for a discussion about the important legal issues and best practices for leveraging social media. Topics will include:

• Ways that companies are using social media in the form of sweepstakes, contests, blogs, wikis, and other promotions involving user-generated content;
• Legal risks and the impact of recent cases and the FTC Guides on your advertising and marketing campaigns; and
• Practical advice on how to minimize legal liability associated with social media websites and campaigns with user-generated content.

SPEAKERS:

David J. Ervin
Partner, Kelley Drye & Warren LLP
Advertising and Marketing Practice

Gonzalo E. Mon
Associate, Kelley Drye & Warren LLP
Advertising and Marketing Practice

Josephine Belli-Marinos
Associate General Counsel & Litigation Counsel
Combe Inc.

Reginald M. Rasch
General Counsel
LinkShare

WHEN: February 9, 2010, from 3:00 - 5:00 PM

WHERE: Kelley Drye, 101 Park Avenue, 27th floor, New York, NY, 10178

REGISTER: email nycle@kelleydrye.com

• Email This
• Print
• Share Link

Two New Jersey legislators recently introduced a bill that would regulate text messages.  Under the bill, no one may send a text message advertisement to a recipient in NJ if the recipient will incur a charge or a usage allocation deduction unless the sender has obtained prior permission from the recipient.  Prior permission must include the number to which the text message advertisement may be sent.  In addition to regulating the sending of text messages, the bill provides that no telecommunications company may sell text messaging services to customers in NJ unless the company offers an option to block all incoming and outgoing text messages.  Companies that violate the law could have to pay up to $10,000 for the first offense, up to $20,000 for subsequent offenses, and additional payments of up to $30,000 if the violator knew or should have known the recipient is a senior citizen or person with a disability.

It’s too early to tell whether the New Jersey bill will pass, but its introduction demonstrates that regulators are paying close attention to mobile marketing.  Regardless of whether or not the bill passes, however, mobile marketers would be well-advised to get express consent before sending text messages to consumers.  Unless they get consent, marketers are likely to face complaints, lawsuits, and significant settlement costs.  In recent years, consumers have filed a number of lawsuits against companies that failed to get consent from consumers before sending them text messages.  For example, one company agreed to pay $7 million to settle accusations of sending unsolicited text messages.   To avoid becoming a target of these types of lawsuits, marketers should consult with their legal counsel and review the Mobile Marketing Association Consumer Best Practices Guidelines for instructions on getting consent.
 

• Email This
• Print
• Share Link