Editors of the ABA Journal have selected Ad Law Access as one of the 2018 ABA Journal Web 100, a list of the 100 best digital media resources for a legal audience. The Web 100 honors legal blogs, podcasts, social media and, as of 2018, web tools. In addition, the magazine added five more bloggers to its Blawg Hall of Fame—featuring the very best law blogs, known for their untiring ability to craft high-quality, engaging posts sometimes on a daily basis.

Ad Law Access is published by Advertising & Marketing practice at Kelley Drye & Warren LLP. The blog provides updates on advertising and privacy law trends, issues, and developments. The posts focus on issues that in-house attorneys need to know, summarizes them in a digestible manner, and provides readers with practical tips and thoughtful analysis.

“The web is a constantly evolving space, and we enjoy shining a light on new and useful blogs, tools and people for legal professionals to follow,” ABA Journal Editor and Publisher Molly McDonough said. “We hope the Web 100 provides readers with entertainment, engagement and a way to keep abreast of the newest developments in the legal industry.”

About Kelley Drye’s Advertising and Marketing practice:

Kelley Drye’s Advertising and Marketing practice is made up of highly respected and nationally ranked attorneys, with deep and ready knowledge of advertising law, courtroom-tested litigation skills, and a reputation for integrity and credibility earned through prior experience serving with, and working across the table from, the Federal Trade Commission (FTC) and other government agencies. The practice help global brands and Fortune 500 companies that manufacture and sell products across a range of industries to navigate this dynamic and heavily regulated industry, ensuring that their marketing, advertising and promotions are both effective and compliant with federal and state laws and regulations, broadcast network and industry self-regulatory standards, and evolving best practices for traditional and new media marketing.

About the ABA Journal:

The ABA Journal is the flagship magazine of the American Bar Association, and it is read by half of the nation’s 1.1 million lawyers every month. It covers the trends, people and finances of the legal profession from Wall Street to Main Street to Pennsylvania Avenue. ABAJournal.com features breaking legal news updated as it happens by staff reporters throughout every business day, a directory of more than 4,000 lawyer blogs, and the full contents of the magazine.

About the ABA:

With nearly 400,000 members, the American Bar Association is the largest voluntary professional membership organization in the world. As the national voice of the legal profession, the ABA works to improve the administration of justice, promotes programs that assist lawyers and judges in their work, accredits law schools, provides continuing legal education, and works to build public understanding around the world of the importance of the rule of law

The California Food, Drug, and Medical Device Task Force announced a settlement this week with Goop, the lifestyle brand founded by Gwyneth Paltrow, which we’ve written about here and here. The complaint alleges that Goop made false and misleading representations regarding the effects or attributes of three products—the Jade Egg, Rose Quartz Egg, and Inner Judge Flower Essence Blend. According to the complaint, Goop advertised that the Jade and Rose Quartz Eggs—egg-shaped stones designed to be inserted vaginally and left in for various lengths of time—as well as the Inner Judge Flower Essence Blend could balance hormones, prevent uterine prolapse, increase bladder control and prevent depression. The complaint also alleges that none of Goop’s claims regarding these products were supported by competent or reliable scientific evidence.

The stipulated judgment prohibits Goop from (1) making any claims regarding the efficacy or effects of any of its products without possessing competent and reliable scientific evidence that substantiates the claims; and (2) manufacturing or selling any misbranded, unapproved, or falsely advertised medical devices. In addition, Goop agreed to pay $145,000 in civil penalties and will provide refunds to consumers who purchased the products during 2017.

Goop responded, in part, as follows: “Goop provides a forum for practitioners to present their views and experiences with various products like the Jade Egg. The law, though, sometimes views statements like this as advertising claims, which are subject to various legal requirements.”

Yep. True story. Here are a few other lessons:

  • When made on a site promoting sale of a product, statements by practitioners or other testimonialists about the benefits of that product are advertising (not sometimes, always) and can never be used to support claims that are not otherwise supported by competent and reliable scientific evidence.
  • Competent and reliable scientific evidence is a flexible standard. For health claims, though, it frequently requires well-designed clinical tests. Simply put, the standard isn’t whether there is any evidence; it is whether there is credible evidence that experts in the field would agree is reliable.
  • Fanciful claims that do not rise to the level of disease prevention aren’t necessarily puffery either. Advertisers need to clearly understand when they are making objectively provable claims and have an obligation to substantiate them before dissemination.
  • Products that feature claims of disease treatment or reduction may be classified as medical devices or drugs and may be subject to FDA clearance or approval prior to marketing.

Goop claims to have modified its claims to comply with the settlement. Notably, the Jade Egg remains available. We’ll let you decide what to do with that.

The FTC recently announced a settlement with Breathometer, Inc., a company that marketed a smartphone accessory that it claimed could detect blood alcohol levels.  Users could simply plug the accessory into the headphone jack, open the Breathometer app, blow, and receive a reading of their blood alcohol content within five seconds.  Breathometer marketed the products as “FDA registered devices,” featuring “law enforcement”-grade technology, to help you “make informed, dependable decisions” about whether to drive after drinking.

The FTC alleged that Breathometer did not have adequate substantiation for its performance claims. Specifically, the products were tested to determine accuracy at .02% blood alcohol content, not .08%, which is the legal limit under state laws.  In addition, testing revealed that the accuracy of the Breeze version of the product degraded over time and the company did not have a means of recalibrating it remotely.  Breathometer stopped selling the Breeze product but allegedly did not adequately inform consumers of the issue.

This case is yet another illustration of the FTC taking the lead on mobile health products that are or could potentially be regulated by the FDA. As readers of our Food and Drug Law Access blog may know, FDA has taken a risk-based approach to regulation of such products and, with the exception of products that could cause patient harm or death upon malfunction, is exercising regulatory discretion. Yet, many companies, particularly those who are new to the health market, presume that FDA is the primary, if not the only, regulator likely to have an interest in their product and claims.

Not so. The FTC has repeatedly voiced concerns about the proliferation of mobile health apps and whether claims were being properly substantiated, particularly where disease diagnosis, treatment, or mitigation claims are featured.  Along with the Breathometer matter, the Lumosity, Melanoma Detective and Aura Labs cases collectively demonstrate that when it comes to many consumer-directed mobile health products, the regulator most likely to take interest is the FTC.

Please join Kelley Drye in 2017 for the Advertising and Privacy Law Webinar Series. Like our annual in-person event, this series will provide engaging speakers with extensive experience and knowledge in the fields of advertising, privacy, and consumer protection. These webinars will give key updates and provide practical tips to address issues faced by counsel.

This webinar series will commence January 25 and continue the last Wednesday of each month, as outlined below.

January 25, 2017 | February 22, 2017 | March 29, 2017 | April 26, 2017 | June 28, 2017
July 26, 2017 | September 27, 2017 | October 25, 2017 | November 29, 2017

Kicking off the series will be a one-hour webinar on “Marketing in a Multi-Device World: Update on Cross Device Tracking” on January 25, 2017 at 12 PM ET. For more information and to register, please click here. CLE credit will be offered for this program.

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The Federal Trade Commission announced this week that it has reached settlements with two marketers for “deceptively claiming their mobile apps could detect melanoma, even in its early stages.” MelApp and Mole Detective claim to have the ability to accurately screen for a mole’s analyzed melanoma risk despite the absence of clinical testing. The FTC alleged this was a deceptive tactic as the marketers lacked sufficient evidence to prove these claims.

The settlements prohibit each company “from claiming that a device, such as an app, can detect or diagnose melanoma, unless the representation is truthful, not misleading, and supported by competent and reliable scientific evidence in the form of human clinical testing of the device.” The agency will pursue litigation against two additional marketers who did not agree to settle.

These settlements are noteworthy because they signal that the FTC’s interest in health benefit claims is not limited to consumable products such as foods, which may be news to newcomers in the health technology area.  It is also a departure from the Food and Drug Administration’s enforcement discretion position relative to low-risk health apps geared toward consumers.  The lesson for industry is that even if FDA does not require a pre-market clearance showing of safety and efficacy in order to market apps such as these, the FTC still holds marketers to the “competent and reliable scientific evidence” claim substantiation standard.

On September 4, 2014, the FTC announced a settlement with Google Inc., which requires the search giant to pay at least $19 million in refunds to consumers that the Commission alleges were billed for unauthorized in-app charges incurred by kids.  The settlement follows a similar settlement in January with Apple (which required Apple to pay a minimum of $32.5 million in refunds), and a recent complaint filed by the FTC in federal court against Amazon.

The FTC’s complaint against Google alleges that the company offered free and paid apps through its Play store.  Many of these apps are rated for kids and offer “in-app purchases” ranging from $0.99 to $200, which can be incurred in unlimited amounts.  The FTC alleges that many apps invite children to obtain virtual items in a context that blurs the line between what costs virtual currency and what costs real money. 

At the time Google introduced in-app charges in March 2011, users were notified of an in-app charge with a popup containing information about the virtual item and the amount of the charge.  A child, however, could clear the popup simply by pressing a button labeled “CONTINUE.”   In many instances, once a user had cleared the popup, Google did not request any further action before billing the account holder for the corresponding in-app charge. 

It was not until mid- to late-2012 that Google begin requiring password entry in connection with in-app charges. The complaint alleges, however, that once a password was entered, it was stored for 30 minutes, allowing a user to incur unlimited in-app charges during that time period.  Regardless of the number or amount of charges incurred, Google did not prompt for additional password entry during this 30 minute period.

Google controls the billing process for these in-app charges and retains 30 percent of all revenue.  For all apps, account holders can associate their Google accounts with certain payment mechanisms, such as a credit card, gift card, or mobile phone billing.  The complaint highlights that Google received thousands of complaints related to unauthorized in-app charges by children and that unauthorized in-app purchases was the lead cause of chargebacks to consumers. Continue Reading Google to Refund at Least $19 Million Over Kids’ In-App Purchases

The FTC announced last week that it had reached a settlement with N.E.W. Plastics Corp., d/b/a Renew Plastics, over allegedly improper recyclability and recycled content claims.  The company manufactures plastic lumber products – including its Evolve and Trimax brands – used primarily in outdoor decking and furniture.  According to the FTC’s complaint, the company claimed that its Evolve brand was 100% recyclable and contained over 90% recycled high density polyethylene (ReHDPE) material.  The company also advertised its Trimax brand as recyclable and made of 90% post-consumer recycled material.

The FTC alleges that the claims were deceptive because Evolve contains (at most) 58% recycled plastic, while the recycled plastic in Trimax contains (on average) less than 12% post-consumer recycled content.  FTC also alleges that the products are not “recyclable” because local recycling centers where the products are sold do not accept the products due to their non-plastic content and size and weight.  Furthermore, the cost of shipping the products to the manufacturer under its take-back program generally exceeded the amount consumers were paid for returning the items.

The proposed consent order prohibits the company from misrepresenting the recycled content of its products, including the amount of post-consumer recycled content.  The order also prohibits advertising the products as “recyclable” unless: (1) the entire item, excluding minor incidental components, can be collected through an established recycling program; and (2) recycling facilities are available to a substantial majority (i.e., more than 60%) of consumers or communities where the products are sold; otherwise, the advertising must clearly and prominently disclose the limited availability of recycling and the extent to which it is limited.

This is the first time the FTC has enforced its 60% substantial majority threshold for recycling claims.  Marketers can be sure, however, that the FTC will continue to look closely at these kinds of claims.

This morning, New York Attorney General Schneiderman announced that his office had concluded a year-long undercover investigation into the reputation management industry and the practice of posting fake reviews online.

Many search engine optimization (“SEO”) companies offer customers online “reputation management” services. During the investigation, the AG learned that some SEO companies perform these services through less-than-reputable means. For example, some companies create fake profiles on review websites and pay freelance writers to post reviews. This practice — commonly known as “astroturfing” — constitutes false advertising. The AG entered into Assurances of Discontinuance with 19 companies who engaged in this practice, with penalties ranging from $2,500 to just under $100,000.

If you read this blog, you already know it’s a bad idea to fake reviews. And you already know that if your company provide incentives for consumers to write reviews, those incentives must be disclosed. But the question is whether your partners know these things, too. If you are working with another company to help boost your reputation online, you should take steps to ensure they are performing their services in a way that complies with the law.