Gonzalo E. Mon

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FTC Announces $1.3 Million Settlement in Negative Option Case

Last week, the FTC announced that an online lingerie company had agreed to return more than $1.3 million to customers who enrolled in a negative-option membership program offering discounts and other benefits. Under Adore Me’s VIP program, a member would be charged $39.95 per month, unless the member either purchased apparel or pressed a “skip” … Continue Reading

Instagram Expands its Influencer Tool, but is it Enough?

In June, we posted that Instagram users would start seeing a new “Paid partnership with” tag on certain posts. The company explained that this was part of a tool designed to “help creators more clearly communicate to their followers when they are working in partnership with a business.” (It also allows users to better track the performance of … Continue Reading

Time to Revisit Morals Clauses

Over the past few months, we’ve witnessed a steady stream of sexual harassment scandals in Hollywood. Many companies are taking proactive approaches and cutting ties with the men who have been accused of wrongdoing. Our colleagues at Labor Days recently discussed that issue from an employment law perspective. But it’s also worth considering how this … Continue Reading

“Local” Means Something, but What?

The “local” food movement is growing, as many consumers attempt to find fresher options, support local businesses, and reduce the environmental impact of shipping foods over longer distances. One problem, though, is that no one is quite sure what “local” means. As with the word “natural” – another word without a clear meaning – this … Continue Reading

Gatorade Lands in Hot Water by Encouraging Others to Avoid Water

This week, the California Attorney General announced a settlement involving allegations that Gatorade made misleading claims about the relative performance benefits of Gatorade and water  in a mobile game that was targeted to teens. Players controlled a cartoon version of Olympic Gold Medalist Usain Bolt, and ran a race to recover gold coins stolen by pirates. … Continue Reading

NAD Addresses “Best Selling” Claims

Benefit Cosmetics advertised that its They’re Real Mascara was the “#1 best-selling Prestige Mascara in the U.S.” and the “#1 best-selling Prestige Mascara in the U.S. for 3 years.” A disclosure linked to the first claim explained that the claim was based on NPD data from July 2015-June 2016, and a disclosure linked to the … Continue Reading

FTC Takes Action Against Social Media Influencers

This morning, the FTC announced that it had reached a settlement in its first-ever complaint against individual social media influencers and that it had sent warning letters to other prominent influencers. In addition, the FTC announced that it had updated previous guidance on influencer campaigns. Settlement The settlement involves Trevor Martin and Thomas Cassell, owners … Continue Reading

Consumer Groups Push for More Regulation of Influencers

In November, we posted that four consumer groups had sent letters to FTC, encouraging the agency to investigate and bring enforcement actions regarding the use of influencers on Instagram. In April, the FTC responded by sending more than 90 letters to companies and influencers, reminding the recipients of their legal obligations. Now, the consumer groups … Continue Reading

Instagram Announces a New Tool for Influencers

Last year, we posted that four consumer groups had sent letters to FTC, encouraging the agency to “investigate and bring enforcement actions related to the practice of non-disclosed advertising through influencer user profiles on Instagram.” Earlier this year, the FTC responded by sending more than 90 letters to companies and influencers, reminding recipients of their … Continue Reading

Lessons from the World of Trampoline Marketing

Last year, we wrote about an NAD case involving trampoline marketing. The Trampoline Safety website featured reviews designed to help buyers purchase a trampoline. But unless website visitors looked closely at a disclosure at the bottom of the site, they probably wouldn’t have realized that trampolines that had received the highest ratings were made by … Continue Reading

FTC Staff Reminds Brands and Influencers About Disclosure Requirements

In November, we posted that four consumer groups had sent letters to FTC, encouraging the agency to investigate and bring enforcement actions regarding the use of influencers on Instagram. In what may be a response to that encouragement, the FTC just announced that it had sent more than 90 letters to companies and influencers, reminding the recipients … Continue Reading

Court Dismisses Website Accessibility Suit Over Lack of Connection to Store

As we noted earlier this week, a handful of law firms have filed hundreds of lawsuits – and sent many hundreds of letters threatening lawsuits – over website accessibility issues. This has been a lucrative business for these firms. Many of these suits and letters are essentially cut-and-paste jobs, and the recipients often decide to … Continue Reading

Court Relies on Due Process Argument to Dismiss Website Accessibility Suit

Over the past few years, a handful of law firms have filed hundreds of lawsuits – and sent many hundreds of letters threatening lawsuits – over website accessibility issues. This has been a lucrative business for these firms. Many of these suits and letters are essentially cut-and-paste jobs, and the recipients often decide to quickly … Continue Reading

New Lawsuit Highlights Risks of Using User-Generated Content

In 2014, Anheuser-Busch ran a contest on Facebook in which consumers were invited to submit photos of themselves “acting natural.” The contest rules stated that entrants could only submit their original works, and that the photos could not infringe anyone else’s copyrights, privacy rights, publicity rights, or other rights. Moreover, the rules stated that entrants … Continue Reading

More Regulators Focus on Price Comparisons

Yesterday, the Virginia Attorney General announced that it reached a settlement with Hobby Lobby over the retailer’s price comparisons. According to the press release, Hobby Lobby advertised discounts compared to “other sellers,” but failed to disclose the basis of comparison, thus making it difficult for consumers to determine whether they were getting a good deal. … Continue Reading

New NAD Decision Addresses Product Reviews

The NAD recently announced a decision that touches upon various issues related to consumer reviews, including how paid endorsements should be disclosed, a company’s responsibilities regarding the content of endorsements, and the presentation of aggregate reviews. The FitTea website includes a “Results and Reviews” page. At the top of the page are a series of … Continue Reading

NAD Decision on Savings Claims Holds Valuable Lessons

The NAD recently issued a decision involving savings claims that holds some valuable lessons for advertisers. Lowes ran TV ads advertising that consumers could get “20% off appliances $396 or more.” Not all appliances in that price range were discounted at 20%, though, and a consumer complained to the NAD, arguing that the retailer had … Continue Reading

Don’t Lose Your DMCA Safe Harbor Protection

If your website allows users to post content, you’re probably already familiar with the Digital Millennium Copyright Act. Among other things, the DMCA provides online service providers a “safe harbor” from potential liability arising from publishing content that infringes a third party’s copyrights, if that content was posted by another person. In order to take … Continue Reading

Groups Renew Call for FTC to Act on Influencer Campaigns

In September, we noted that four groups – Public Citizen, Commercial Alert, the Campaign for a Commercial Free Childhood, and the Center for Digital Democracy – had sent a joint letter to FTC encouraging the agency to investigate and bring enforcement actions related to the use of influencers on Instagram. The letter included examples of … Continue Reading

Ninth Circuit Holds Yelp Is Not Responsible for Bad Reviews

The Ninth Circuit recently reaffirmed the protection afforded to website providers and users under Section 230 of the Communications Decency Act. In that case, a locksmith sued Yelp over a bad review and one-star rating that had been posted by a consumer. The locksmith accused Yelp of being responsible both for creating the review and … Continue Reading

Groups Urge FTC to Act on Influencer Campaigns

This week, four groups – Public Citizen, Commercial Alert, the Campaign for a Commercial Free Childhood, and the Center for Digital Democracy – sent a joint letter to FTC encouraging the agency to “investigate and bring enforcement actions related to the practice of non-disclosed advertising through influencer user profiles on Instagram.” As we reported last month, … Continue Reading

NAD Revisits Crowd-Sourced Substantiation

Traditionally, when companies wanted to advertise that consumers preferred their product over another product, the companies would substantiate their claim by running a survey. Consumers would be stopped in a mall, called, or contacted online, and asked their opinions. Now that many consumers freely post their opinions online, though, some companies are wondering whether they … Continue Reading
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