Our State AG webinar series continues, this time with Consumer Protection Division Director Kevin Anderson and Deputy General Counsel Daniel Mosteller of the North Carolina Attorney General’s Office (NC AGO). During our webinar, we learned about the office’s structure, consumer protection work as it relates to public health issues, and the tools they have pursuant to the consumer protection laws of North Carolina. In case you missed it, here is a recording of the webinar. We have also recapped what we learned below.

General Office Information

North Carolina elects its attorney general (AG) during the same cycle as the US presidential election. The AG oversees the Consumer Protection Division which also handles antitrust and charities matters. The division has approximately 20 attorneys, plus other staff members. The NC AGO promotes a “two-way dialogue” which takes place between the attorneys in the division and the front office to determine the office’s consumer protection priorities. The AG will set an agenda based on constituent needs. In parallel, the division continually works to spot new consumer protection issues to bring to the AG’s attention.

The NC AGO receives consumer complaints about a range of unfair or deceptive acts conducted within the state. Consumers can file complaints with the office, which in turn, sends the complaints to the businesses at issue, asking for their voluntary response, with the ultimate goal of resolving disputes. Complaint specialists handle these complaints, assisting consumers and businesses with the process, and logging complaints into a database so that the office can keep an eye on trends and issues that need investigating. Last year, the office received over 20,000 written consumer complaints—a large increase compared to ten years ago.

Continue Reading State AGs and Consumer Protection: What We Learned from ….North Carolina

For the second time in as many months, the Federal Trade Commission (FTC) last week announced a settlement alleging that a company’s use and disclosure of consumers’ health information for online advertising violated the law.  The BetterHelp settlement indicates that the FTC takes a broad view of what constitutes “health information,” but it raises questions about how the FTC will apply its reinterpretation of the Health Breach Notification Rule under its September 2021 policy statement.

Overview of the FTC’s Broad View of “Health Information”

BetterHelp is an online counseling service that has registered more than 2 million users since its 2013 inception.  When a consumer visits the site, the FTC alleges that she is “immediately prompted to begin” Better Help’s intake questionnaire that asks questions about the consumer’s history of therapy, current mental state, and religious beliefs among other characteristics, and then provides an email address and other information to create an account.

According to the FTC’s complaint, the company violated the FTC Act through its use of advertising pixels or web beacons and by uploading consumers’  “health information” to ad platforms for retargeting and to reach additional prospects. In the FTC’s view, the “health information” that BetterHelp disclosed not only included information about consumers’ past use or current enrollment in the company’s services but also their interest in obtaining therapy. This information was sufficient to “reveal” that consumers were “seeking mental health treatment.”

Continue Reading FTC to Advertisers: We’re Tracking Your Use of Health Information

Last week, as severe weather hit the country, price gouging laws were triggered ranging as far as California to Kentucky. And as we’ve previously reported, complying with the varied state price gouging laws can be tricky, especially where they use undefined terms like “excessive” or “exorbitant” to define price gouging.  Last week the New York Attorney General announced proposed rules designed to strengthen enforcement of New York’s price gouging law, which was last updated in 2020 to grant the Office of the Attorney General (or “OAG”) rulemaking authority. The rules would provide some needed clarity to the existing law, but would also impose new restrictions.

The OAG noted three important considerations that they factored in when crafting the rules:

Continue Reading NY Attorney General Proposes Price Gouging Rules

This past week, the internet lit up over whether it was okay for President Biden and the First Lady to order the same dish at the Red Hen.  In this issue, we invite you to read the February highlights on clean labeling false advertising litigation, updates on green claims, thoughts on whether light beer should taste like beer, FDA’s plant-based milks draft guidance, and USDA’s enhanced authority on “organic” claims with the same level of fascination.  

“Clean at Sephora” Motion to Dismiss A Test for the Reasonable Consumer Standard

Clean claims on foods, supplements, OTC drugs and cosmetics have surged in popularity as have retailers’ efforts to curate product selections and ingredients to eliminate disfavored ingredients, such as synthetic dyes, preservatives, fragrances, parabens, phthalates, etc.  “Clean” is not defined in regulations, which means that each brand or retailer must explain to shoppers how it’s defined within that brand.  In fact, many popular lifestyle-related terms – vegetarian, vegan, keto, cruelty-free, etc. – also are not defined by regulation. 

To the delight of advertising lawyers and the chagrin of marketers, the answer to the question of how to deal with potentially vague terms is through clear and conspicuous disclosures.  It is just this scenario that is at issue in a pending false advertising lawsuit, Finster v. Sephora USA Inc.

Continue Reading Food + Personal Care Product Litigation and Regulatory Highlights – February 2023

Join members of Kelley Drye’s Advertising, Privacy, and Financial Services teams on March 8, 2023 at 12:30-1:30 ET for an overview of hot topics and issues to watch for in 2023 in fintech and financial services.

Both the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) have set an aggressive agenda for 2023 that could fundamentally alter the regulatory landscape governing fintech and financial services providers. In pushing to expand the boundaries of third-party liability, the agencies are looking beyond traditional financial services providers to retailers, social media and tech platforms, lead generators, data aggregators, and others. The efforts come amidst simultaneous challenges to the fundamental structure and authority of each agency.

Please join us for a webinar with Partners Matt Luzadder and Donnelly McDowell and two of Kelley Drye’s newest team members with significant financial services and privacy experience at the FTC, Partner Kate White and Special Counsel Ioana Gorecki.

The webinar will cover a host of hot topics in advertising and privacy, including but not limited to:

  • FTC and CFPB priorities and pending challenges to each agency’s authority and structure
  • Expanded third-party liability for service providers
  • “Junk fees” and “dark patterns”
  • Financial privacy and data access portability
  • Discriminatory lending and credit practices
  • Crypto and blockchain developments


Last week, NAD released a decision in a case involving a Molson Coors ad that has received more press attention than any NAD decision in recent memory. In the ad, athletes are celebrating the completion of a difficult workout by opening a can labeled “Extremely Light Beer” and pouring the liquid over their heads while an announcer says “Light beer shouldn’t taste like water. It should taste like beer.”

Anheuser-Busch filed a challenge using NAD’s Fast-Track SWIFT process, arguing that the videos falsely disparage Michelob Ultra and other light beers by claiming that consumers find them to taste like water. Molson Coors pointed out that no competitors were named and the tagline was simply “a subjective opinion about what beer should and should not taste like, which cannot be objectively proved or disproved.” In other words, mere puffery “because it is not sufficiently specific and material enough to create expectations in consumers.” But NAD didn’t agree. It deemed Coors’ claim measurable and objective and found it to be unsupported by evidence.

Hmmm. Do consumers really expect Molson Coors to have a well-designed test establishing that some unnamed light beers taste like water? Such jabs have long been a staple of American advertising. Isn’t this akin to Wendy’s iconic “Where’s the beef” campaign? Or Dunkin Donuts’  slogan, “friends don’t let friends drink Starbucks”? These taglines were never controversial. And yet, one can only imagine the conversations that might ensue if these slogans crossed NAD’s desk today. Wendy’s might be asked to provide to-the-millimeter measurements of competitors’ burger-to-bun ratios. And Dunkin might be asked to supply a robust, geographically diverse, well-conducted survey of three hundred “friends.”

Continue Reading NAD’s Molson Coors Decision: The Watering Down of the Objective Claim Standard

As we’ve described here, the Senate made major strides last year on legislation to protect children’s privacy and safety online. Indeed, two bipartisan bills sailed through a Commerce Committee markup, though they didn’t ultimately make it to the floor for a Senate vote. This year, kids’ privacy is once again getting attention, beginning with a February 14 Senate Judiciary Committee hearing on the issue. Members used the hearing to tout last year’s bills and mention some new ones, too. They also touched on other top-of-mind issues involving the tech industry, such as Section 230 reform and encryption.   

Of note, Senators Blumenthal and Blackburn discussed the Kids Online Safety Act (KOSA) (their bill from last year, just re-introduced), which would impose a “duty of care” on tech companies and shield young people from harmful content. Senator Hawley, in turn, talked up his Making Age-Verification Technology Uniform, Robust, and Effective Act (MATURE Act), which would enforce a minimum age requirement of 16 for users of social media platforms. (As noted below, panelists were quite skeptical that this would work.) 

The event highlighted, once again, the bipartisan interest in tackling the harms that minors face online. Here’s more detail on what happened:  

First up, opening remarks from Chairman Durbin (D-Ill.), Ranking Member Graham (R-S.C.), and Senators Blumenthal (D-Conn.) and Blackburn (R-Tenn.)

Chairman Durbin kicked off the hearing by explaining that the internet and social media have become a threat to young people.  He noted that while the Internet offers tremendous benefits, cyberbullies can hurt kids online via platforms like Facebook and Snapchat. Durbin stated that “we don’t have to take” the lucrative business that the platforms (who were not in attendance) have created to keep kids’ eyes glued to the screens. He said that the addictive nature of the platforms has created a mental health crisis – causing anxiety, stress, and body image issues, for example – which can lead to tragic results.

Continue Reading Senate Judiciary Hearing on Kid’s Privacy – Sunny with a Chance of Section 230 Reform

Twitter became the first social media platform to expressly allow cannabis advertising.  Effective last week, Twitter’s U.S. ad policy states as follows: 

What’s the policy?

Twitter prohibits the promotion of drugs and drug paraphernalia.

Examples of drugs and drug paraphernalia include:

  • Illegal drugs
  • Recreational and herbal drugs
  • Accessories associated with drug use
  • Drug dispensaries
  • Depictions of hard drug use

United States

We permit approved Cannabis (including CBD– cannabinoids) advertisers to target the United States, subject to the following restrictions:

  • Advertisers must be licensed by the appropriate authorities, and pre-authorized by Twitter.
  • Advertisers may only target jurisdictions in which they are licensed to promote these products or services online.
  • Advertisers may not promote or offer the sale of Cannabis (including CBD– cannabinoids)
    • Exception: Ads for topical (non-ingestible) hemp-derived CBD topical products containing equal to or less than the 0.3% THC government-set threshold.       
  • Advertisers are responsible for complying with all applicable laws, rules, regulations, and advertising guidelines.
  • Advertisers may not target customers under the age of 21.

Any advertisement for Cannabis (including CBD– cannabinoids) content that is allowed, subject to the above restrictions, must in addition:

  • Not appeal to minors in the creative, and landing pages must be age gated and sales must be age verified.
  • Not use characters, sports-persons, celebrities, or images/icons appealing to minors. 
  • Not use minors or pregnant women as models in advertising. 
  • Not make claims of efficacy or health benefits.
  • Not make false/misleading claims.
  • Not show depiction of cannabis product use.
  • Not depict people using or under the influence.
  • Not encourage transport across state lines.

Contact Twitter if you are interested in this option.


As with so many issues in the cannabis space, this policy raises questions about federal law, which expressly prohibits advertising sale of a Schedule I narcotic.  The federal Controlled Substances Act states:  “It shall be unlawful for any person to place in any newspaper, magazine, handbill, or other publicatio[n], any written advertisement knowing that it has the purpose of seeking or offering illegally to receive, buy, or distribute a Schedule I controlled substance.”  The act goes on to state that it is also illegal to use the internet for such purposes. 

Importantly, although the provision refers to “advertisement” in “its ordinary meaning” the prohibition on advertising includes an exception.   The CSA states:  “[t]he term “advertisement” does not include material which merely advocates the use of a similar material, which advocates a position or practice, and does not attempt to propose or facilitate an actual transaction in a Schedule [1] I controlled substance.”  In addition, a separate exception states that Section A (the prohibition) does not apply to material that “merely advocates the use of a controlled substance or includes pricing information without attempting to facilitate an actual transaction involving a controlled substance.”

Based on the plain language, Twitter’s policies attempt to respect these limitations, which have not been the subject of federal enforcement despite the exponential growth in the cannabis industry in recent years.  In addition, Twitter’s updated policies also convey general consistency with the patchwork of state cannabis advertising laws, to the extent they allow for digital advertising.  Nevertheless, even if law enforcement and regulators do not raise an eyebrow, one must wonder whether blue chip companies will risk returning to Twitter if their logo may be featured next to a marijuana brand.  The answer may depend on whether other social media platforms follow Twitter’s lead.

If you tell your friends about your new year’s resolutions, odds are that most of those friends won’t push you for too much detail on how you plan to achieve your goals. But if those friends work at NAD, you might expect some pointed questions about whether you have a solid plan, whether you’ve started to work on that plan, and whether your goals are realistic. They’re not going to let you get by on good intentions alone.

As we’ve noted in previous posts, NAD has held that “when aspirational claims are tied to measurable outcomes, an advertiser must be able to demonstrate that its goals and aspirations are not merely illusory and to provide evidence of the steps it is taking to reach its stated goal.” In several recent cases involving aspirational claims – including cases involving claims by Chipotle and Georgia Pacific – NAD found that the advertisers had provided enough evidence.

In a case announced last week, NAD came to a different conclusion, and advertisers that make aspirational claims about their environmental efforts should take note. The decision covers a lot of ground, but here are some of the key themes.

Continue Reading NAD Finds Advertiser Can’t Support Aspirational Net Zero Claims

For the 26+ years I served at the FTC, the agency always described itself as a “law enforcement agency,” not a “regulator.” That’s because the FTC spent most of its resources on enforcing the FTC Act and other laws passed by Congress, not creating new regulations on its own. While it would be an exaggeration to say that the FTC has become a regulator in the mold of the federal banking agencies or CFPB, Chair Khan is certainly pushing the FTC in that direction. Indeed, the agency’s rulemaking activity has dramatically increased under her tenure.    

From “Whack-a-Mole” to “Rule-a-Palooza”

What explains the change? For one thing, the FTC majority believes that the FTC’s former way of operating (which it often describes as “case-by-case enforcement” or even “whack-a-mole”) hasn’t adequately protected consumers and competition, warranting the creation of stricter, broader rules for the entire marketplace. For another, in the wake of the Supreme Court’s decision in AMG (holding that the FTC can’t obtain monetary relief under Section 13(b)), the FTC is increasingly relying on other legal tools to get money – notably, alleging rule violations wherever possible, which enables the FTC to seek civil penalties and/or consumer redress. Hence the desire for more rulemaking, or what Commissioner Wilson has described (in strongly worded dissents) as a “Rule-a-Palooza.”   

Continue Reading Is the FTC a “Regulator”?  It Sure Seems to be Moving in that Direction