The Federal Trade Commission has long supported advertising industry self-regulation as a means of promoting truthfulness and accuracy in advertising. One of the key aspects of this success has been threat of referral to the FTC: Advertisers that refuse to participate in the self-regulatory process or refuse to comply with recommendations after participating are referred to the appropriate government entity, usually the FTC’s Division of Advertising Practices, which will review the claims at issue. Over the years, the specter of a National Advertising Division referral to the FTC has prompted most advertisers to participate in the self-regulatory process and comply with the final decision.

Law360 published the article “NAD Referrals To FTC: How Big Is That Stick?,” co-authored by partner John Villafranco and senior associate Donnelly McDowell.  The article provides an analysis of recent NAD cases that suggests referrals to the FTC are on the rise over the past two years and discusses advertiser commitment to the self-regulatory process. Are advertisers turning their back on self-regulation and rolling the dice at the FTC? And are they doing so based on an assessment of the risk that a referral could result in a major FTC investigation or enforcement action?

To read the article, please click here.

While many today returned to work after the Holiday season, things remained quieter than usual here in the nation’s capital – with many federal workers furloughed until further notice as the federal government continues to be in a partial shutdown.  President Trump is reportedly meeting with congressional leaders today ahead of Thursday’s start to a new congressional session but, at least for now, there’s no immediate end to the shutdown in sight.

Here’s how the shutdown is affecting federal agencies responsible for overseeing and enforcing advertising and privacy laws:

  • The FTC closed as of midnight December 28, 2018.  All events are postponed and website information and social media will not be updated until further notice.  While some FTC online services are available, others are not.  More information here.
  • The CPSC is also closed, although a December 18, 2018 CPSC memorandum summarizing shutdown procedures indicates that certain employees “necessary to protect against imminent threats to human safety” will be excepted employees and continue work during the shutdown.  The CPSC consumer hotline also continues to operate. Companies should remember that obligations to report potential safety hazards are not furloughed, so the mantra of “when in doubt, report” still applies, even if public announcement of a recall may be delayed.
  • Roughly 40% of FDA is furloughed according to numbers released by its parent agency, the Department of Health and Human Services.  In a post on its website, the agency explained that it will be continuing vital activities, to the extent permitted by law, including monitoring for and responding to public health issues related to the food and medical product supply.  The agency is also continuing work on activities funded by carryover user fee balances, although it is unable to accept any regulatory submissions for FY 2019 that require a fee payment.
  • Because the CFPB is funded through the Federal Reserve and not Congress, it remains in operation.

Andrew Smith was recently named Director of the FTC’s Bureau of Consumer Protection. With a strong background in financial matters, businesses can expect Smith to focus on issues affecting consumer financial services.

Smith is not a stranger to federal positions. Although most recently a Partner in the Regulatory and Public Policy Group at Covington & Burling LLP and Co-Chair of the firm’s Financial Services Group, Smith previously held roles as Senior Counsel and Acting Assistant General Counsel at the SEC from 1997 to 2000 and as the Assistant to the Director of the Bureau of Consumer Protection from 2001 to 2005. During Smith’s time at the FTC, he focused largely on consumer financial protection policy—mainly through enforcement and rulemaking. For example, while serving as the program manager for the Fair and Accurate Credit Transactions Act of 2003, Smith helped to draft ten rules and six studies.

Smith’s interest in financial services has followed him throughout his career. His practice at Covington focused specifically on financial privacy—including regulatory compliance, consumer financial services laws, and enforcement actions and investigations. He also serves as the Chair of the ABA’s Consumer Financial Services Committee.

Notably, in January of this year, Smith testified before the House of Representatives Subcommittee on Financial Institutions and Consumer Credit about fintech policy. His statements suggest that he is in favor of an increased role of fintech in the banking industry, although he proposes passing legislation that clarifies the role of banks as lenders, regardless of the vendor or service provider. Further indications of Smith’s interest in the fintech space come from an editorial he authored in The Hill in February of this year. He advocates collaboration between fintech and banks to offer the middle class more financial options, e.g., point-of-sale lending. In Smith’s words, “the future of banking is the internet, and brick-and-mortar is the past.” His piece supports the Modernizing Borrower Credit Opportunities Act of 2017, a bipartisan bill to regulate the fintech industry introduced in November of 2017.

Another indication of Smith’s likely priorities as Bureau Director may be the people he worked with during his prior stint at the FTC. For example, he worked closely with Howard Beales who served as the Director of the Bureau of Consumer Protection from 2001 to 2004. Regarding advertising specifically, Beales advocates for a flexible “reasonable basis” standard for substantiation requirements, as opposed to more stringent evidentiary standards. This position favors the view that consumers benefit from having access to information. Having served with Beales, Smith may take a similar approach to substantiation requirements as Director.

Despite Smith’s previous experience, however, his appointment has not been without controversy. While at Covington, Smith represented Facebook, Uber, and Equifax in both investigations and FTC settlements regarding data breaches. Although Smith plans to recuse himself from these high profile cases in his new role, opponents have noted that Smith’s representation of these companies may put him at odds with the FTC’s consumer protection mission. Senator Richard Blumenthal stated that he could “imagine worse choices [for Bureau Director], but not many,” noting that Smith was “on the wrong side of [the] issues” in his testimony on behalf of Equifax last fall. During that testimony, Smith indicated that credit bureaus should not have a fiduciary duty to consumers from whom they collect data, and that current industry regulations were satisfactory to protect consumers. Senator Elizabeth Warren called Smith’s appointment “corruption, plain and simple,” referring to him as “Equifax’s hired gun.” Further, David Vladeck, who was Bureau Director from 2009 to 2012, noted that Smith’s recusing himself from some of the agency’s most important cases is an unusual position for someone in his role and wondered “how far-reaching the recusals will be.”

The FTC’s newly-appointed Democratic Commissioners had similar concerns, turning a usually perfunctory vote into a point of contention. Rebecca Slaughter noted that appointing a Director “who is barred from leading on data privacy and security matters that affect so many consumers, command so much public attention, and implicate such key areas of the law potentially undermines the public’s confidence in the commission’s ability to fulfill its mission.” Rohit Chopra, a fellow Democrat, agreed, noting that Smith’s conflicts “[raise] many questions,” and would put Smith “on the sidelines” in some of the agency’s most important cases. He also noted that FTC Chairman Joe Simons made the pick without a Commission meeting. Simons, however, called the appointment a “source of unnecessary controversy,” indicating that “it is impossible to attract high caliber professionals to the FTC without encountering some conflicts,” and noting that the agency can readily handle recusals.

Although we may have some insight into Smith’s new role as Director, his position on consumer protection issues outside of the financial industry, and the effects of his recusals, are left to be seen. We can expect, however, that helping to regulate fintech, and other financial security issues, will likely be high on his list of things to do.

The Republican-led FCC’s effort to get out of the business of regulating broadband providers’ consumer practices took a step forward on Monday.  In an appeal that has been proceeding in parallel with the FCC’s “Restoring Internet Freedom” reclassification proceeding, the U.S. Court of Appeals for the Ninth Circuit issued an opinion giving the Federal Trade Commission (FTC) broad authority over practices not classified by the FCC as telecommunications services.  Specifically, the Ninth Circuit, sitting en banc, issued its long-awaited opinion in Federal Trade Commission v. AT&T Mobility, holding that the “common carrier exemption” in Section 5 of the FTC Act is “activity based,” exempting only common carrier activities of common carriers (i.e., the offering of telecommunications services), and not all activities of companies that provide common carrier services (i.e., rejecting a “status-based” exemption).  The case will now be remanded to the district court that originally heard the case.  Coupled with the FCC’s reclassification of Broadband Internet Access Services (BIAS) in the net neutrality/restoring internet freedom proceeding, the opinion repositions the FTC as top cop on the Open Internet and broadband privacy beats.

Background

As we discussed in several earlier blog posts, this case stems from a complaint that the FTC filed against AT&T Mobility in the Northern District of California in October 2014 alleging that AT&T deceived customers by throttling their unlimited data plans without adequate disclosures.  AT&T moved to dismiss the case on the grounds that it was exempt under Section 5, based on its status as a common carrier, but the district court denied the motion, finding that the common carrier exemption was activity-based, and AT&T was not acting as a common carrier when it offered mobile broadband service, which, at the time the FCC classified as a non-common-carrier “information service.”  AT&T appealed and a three-judge panel of the Ninth Circuit reversed the district court, holding that the common carrier exemption was “status-based,” and the FTC lacked jurisdiction to bring the claim.  As we noted then, the three-judge panel’s decision was the first recent case to address the “status-based” interpretation of the common carrier exemption, and the decision – if it stood – could re-shape the jurisdictional boundaries between the FCC’s and the FTC’s regulation of entities in the communications industry.

The En Banc Court’s Analysis

The FTC appealed the case to an en banc panel of the Ninth Circuit, which issued its opinion this week.  The court’s decision relied on the text and history of the statute, case law, and significant deference to the interpretations of the FTC and FCC, which both view the common carrier exemption as activity-based rather than status-based.

The Court first analyzed the history of Section 5 and the common carrier exemption.  It found that the Congress intended the exemption to be activity based and rejected textual arguments advanced by AT&T that other statutory provisions—including Section 6 of the FTC Act and the Packers and Stockyard Exception—demonstrated that the common carrier exemption was status based.  The Court gave significant weight to the understanding of common carriers in 1914, when the FTC Act was first passed, and legislative statements made during consideration of that Act.

The Court then addressed case law that an entity can be a common carrier for some activities but not for others.  The Court found this case law to support an activity-based interpretation of the common carrier exemption.  Specifically, the Court found that while Congress has not defined the term “common carrier,” Supreme Court case law leading up to and following the passage of the FTC Act interpreted the term “common carrier” as an activity-based classification, and not as a “unitary status for regulatory purposes.”  The Court found that its approach was consistent with the Ninth Circuit’s longstanding interpretation of the term “common carrier” as activity-based, as well as the interpretations of the Second, Eleventh, and D.C. Circuits.  (AT&T did not contest these cases, but instead argued that the FCC had many legal tools to address non-common carrier activities, including Title I ancillary authority and potential structural separation.)

Notably, the Court also provided significant deference to the views of the FTC and FCC, both of which have recently expressed the view that the FTC could regulate non-common carrier activities of common carriers.  The Court cited the FCC’s amicus brief before the en banc panel and a 2015 Memorandum of Understanding between the two agencies that interpreted the common carrier exemption as activity-based.

Finally, the Court rejected arguments that the FCC’s 2015 Open Internet Order reclassifying mobile broadband as a common carrier service (or the FCC’s 2017 Restoring Internet Freedom Order reversing that classification) retroactively impacted the outcome of the appeal.

Agency Response

After the court issued its opinion, both FTC Acting Chairman Maureen Ohlhausen and FCC Chairman Ajit Pai applauded the ruling.  Chairman Ohlhausen stated that the ruling “ensures that the FTC can and will continue to play its vital role in safeguarding consumer interests including privacy protection, as well as stopping anticompetitive market behavior,” while Chairman Pai stated that the ruling is “a significant win for American consumers” that “reaffirms that the [FTC] will once again be able to police Internet service providers” after the Restoring Internet Freedom Order goes into effect.

Our Take

The Ninth Circuit’s ruling is unsurprising in some senses.  When a court grants en banc review, it often is for the purpose of reversing or at least narrowing the panel’s initial decision.  AT&T also faced fairly strong questioning during the oral argument in September.  Further, the Court’s decision affirms a position that the FTC had taken for many years and that the FCC – as evidenced by the 2015 Memorandum of Understanding – supported.  Thus, the en banc court here effectively affirms current practice.

All of that said, the issue is not settled.  AT&T’s reaction was decidedly muted, and it may still seek Supreme Court review of the question.  This option may be particularly attractive to AT&T because it noted several times during the oral argument that it faced both FTC and FCC enforcement actions against it for allegedly the same activities.  The Ninth Circuit did not mention the FCC enforcement action or the potentially conflicting interpretations of AT&T’s obligations.  It is not clear whether both actions could or would proceed as a result of the decision.

Going forward, once the FCC’s Restoring Internet Freedom Order takes effect, we can expect that the FTC will serve as the top cop for alleged broadband consumer protection violations, including with respect to open Internet- and privacy-related complaints.  And yet, there is still some uncertainty.  The FCC’s Restoring Internet Freedom Order is under appeal.  If the appeals court that ultimately hears the challenges to the Restoring Internet Freedom Order were to reverse the Order, the possibility exists that broadband services would again come under FCC common carrier jurisdiction, thereby exempting the provision of such services from FTC jurisdiction even under an activity-based interpretation of the FTC Act.  Thus, we may not have finality on broadband regulation, despite the Court’s decision this week.

More broadly, we expect that the FTC will continue to push for eliminating the common carrier exemption altogether before the Congress, as it has for many years.  Congressional action to repeal the exemption appears unlikely in the near term.

At least for now, broadband providers should continue to ensure that their privacy and broadband practices are in line with FTC guidelines and judicial interpretations of Section 5, and should comply with remaining FCC Open Internet requirements, such as the transparency rule.

Most Popular Ad Law Access Posts of 2017

As reported in our Ad Law News and Views newsletter, Kelley Drye’s Advertising Law practice posted 106 updates on consumer protection trends, issues, and developments to this blog in 2017. Here are some of the most popular:

Ad Law News and Views is produced every two weeks to help you stay current on advertising law and privacy matters. You can subscribe to it and other Kelley Drye Publications here and the Ad Law Access blog by email or RSS feed.

2018 Advertising and Privacy Law Webinar Series 

Please join Kelley Drye in 2018 as we continue our well attended Advertising and Privacy Law Webinar Series. Like our in-person events, this series gives key updates and provides practical tips to address issues faced by counsel as well as CLE credit. This webinar series will start again in February 2018. Please revisit the 2017 webinars here.

On December 11, 2017, the Federal Communications Commission (FCC) and Federal Trade Commission (FTC) released a draft Memorandum of Understanding (MOU) which will allocate oversight and enforcement authority related to broadband Internet access service (BIAS) between the two agencies.  The new MOU was announced three days before the FCC’s scheduled vote to reclassify BIAS as an “information service,” and is expected to be finalized simultaneously with that vote.  The MOU is part of an ongoing effort to address concerns that reversing the current “net neutrality” rules will adversely affect consumers, and provides a guide for Internet service providers (ISPs) and other stakeholders to understand which agency will be taking the lead on oversight and enforcement going forward.  However, the extent to which the MOU takes effect will depend upon, among other things, the pending case interpreting section 5 of the FTC Act that is before the Ninth Circuit Court of Appeals.

Continue Reading On the Eve of the FCC’s Reclassification of Broadband Services, the FCC and FTC Release Memorandum of Understanding for Oversight of Broadband

On Monday, the FTC issued an Enforcement Policy Statement stating that the Commission will not take action against operators that collect an audio file of a child’s voice as a replacement for written words, such as for translation into text, without first obtaining parental consent, provided the file is retained only for the brief time necessary for that purpose. However, the operator is still obligated to indicate in its privacy policy how it will collect and use children’s voice recordings, as well as its policy for deletion. The FTC reasons that, although COPPA applies to the collection online of files that contain children’s voices, even if they are immediately deleted after collection, the risk associated with such collection and immediate deletion is minimal.

There are some additional limitations on this policy. It does not apply when the operator requests personal information, such as a child’s name. Moreover, the operator may not use the recording for any use other than translation into text, such as behavioral targeting or identification purposes, before deleting it. If the operator does plan to collect other types of personal information, then it would be required to obtain parental consent.

Although the policy provides some clarification about the application of COPPA to voice-capture technologies, operators of child-directed services that collect children’s voices should ensure that their privacy policies and consent and notification procedures comply with COPPA requirements. Violators are liable for up to $40,654 in civil penalties per violation.

 

Associate Lauren Myers contributed to this post. She is practicing under the supervision of principals of the firm who are members of the D.C. Bar.

 

We have blogged about the FTC’s barrage of letters when they were originally released in April and again last week.  Back in May, in response to a Freedom of Information Act request by the National Law Journal, the FTC released the entire set of letters set out in April.  A close review of the letters is instructive about the FTC’s priorities, the types of ancillary issues it is concerned about, and what your letter might look like if you are a company or a social media influencer who comes to the FTC’s attention.

Altogether, the FTC sent 99 letters dated between March 20 and April 1.  All of them concerned one social media channel, Instagram.  Of the letters, 45 went to the companies whose products were endorsed on Instagram, and the other 54 went to the endorsers.  The endorser letters matched the company letters; there were more endorser letters because some of the letters to companies referenced more than one endorser.

By way of recipient characteristics, the 45 companies that received the letters spanned the size spectrum from prominent, large companies such as Adidas, Chanel, Johnson & Johnson, Hasbro, and the Popeyes restaurant chain down to much smaller and less known companies.  Industry sectors included fashion, sportswear, food, dietary supplements, fitness products, cosmetics, and toys.

Endorsers that received letters generally were celebrities.  While not all of their names were familiar to this generation-X writer, the Instagram posts attached to the FTC’s letters generally received at least several thousand and often hundreds of thousands of likes, indicative that the endorser had at least a significant social media following.  As has been reported elsewhere, the prominent endorsers included Jennifer Lopez, Allen Iverson, Lindsay Lohan, Heidi Klum.  At least one, Vanessa Hudgens, was notified about endorsements for two different companies.  Letters to almost all of the endorsers were addressed in care of their agents or attorneys, again indicating their status as public personae.  This focus on high-profile endorsers is consistent with the FTC’s past statements that it does not intend to go after every small hobbyist blogger who happens to recommend a product now and then.

The letters were based on 2-page form letters (one for companies and another for endorsers) with certain additional boilerplate paragraphs inserted where appropriate and with a few lines of individually customized text describing the specific Instagram post, which was also attached to the letter as the third page.  Starting with the company form letter, the letters identified the FTC and described the purpose of the letter as “educating marketers about their responsibilities under truth-in-advertising laws and standards.”  After identifying the problematic Instagram post, the letters described the FTC’s “material connection” standard under the Endorsement Guides and provided guidance on the required “clear and conspicuous” disclosures of material connections.  All letters advised that the disclosure be within the first three lines of an Instagram post so that the viewer would see it without having to click “more,” and cautioned against burying the disclosure among multiple tags and links.  The Endorsement Guides and a FAQ about them were included with each letter.

Of interest was the extra content added to some of the company letters.  While most of the letters prefaced the information about required disclosures with, “If your company has a business relationship with [endorser], ten out of the 45 letters went farther and asserted, “It appears that [endorser] has a business relationship with your company.”  It was not always evident how the FTC reached this conclusion, but one apparent tip-off was the offer of a discount code in some Instagram posts.  Seven of the 45 letters pointed to the presence of a statement such as “Thanks @[company]!” in the post and stated that for the endorser merely to thank the company is “probably inadequate to inform customers of a material connection because it does not sufficiently explain the nature of the endorser’s relationship to your company; consumers could understand it simply to mean that the person is a satisfied customer.”  In several letters, the FTC also rejected the use of the “#sp” hashtag to identify sponsored content, claiming that consumers do not understand this hashtag, and disapproved of ambiguous hashtags containing words like “partner” or “ambassador.”

Most interestingly from this author’s perspective as a claim substantiation buff, in 10 of the 45 letters, the FTC included a paragraph hinting that it suspected the content of the Instagram post to be deceptive, separate from the failure to disclose the endorser’s material connection to the company.  This paragraph noted that the FTC’s review of the post was limited to endorser disclosures and did not attempt to determine whether the post might be deceptive in other respects, but reminded the company that it is responsible for substantiating all claims.  This language appeared in cases where the Instagram post made a performance claim, generally about weight loss, health or nutrition benefits.  This raises an important point for companies:  Inadequately disclosed endorsements that bring your advertising to the attention of the FTC may alert the agency to problems with your product claim substantiation that it might otherwise not have noticed.

The 54 letters to endorsers adhered more closely to the basic form letter.  Like the company letters, they usually said, “If there is a material connection between you and [company]” but on some occasions asserted “It appears that you have a business relationship with [company.”  They echoed the advice sent to the relevant company about the inadequacy of ambiguous hashtag disclosures and “thanks.”  Unlike the company letters, the endorser letters never commented on the possible lack of substantiation for claims made by the endorsers.

So the takeaways from the FTC’s spring Instagram endorser broadside are:

  • The FTC views this campaign as an educational initiative rather than an enforcement measure – at least for now.
  • The FTC looks at companies of any size in a variety of industries, but so far is focusing on endorsements by high-profile influencers.
  • Several commonly used short cuts for disclosing a material endorser connection in social media are not favored by the FTC.
  • Inadequate endorser disclosure can cue the FTC to other problems with advertising, including claim substantiation issues.

On June 28, the FTC and National Highway Traffic Safety Administration (NHTSA) brought together a variety of stakeholders including regulators, automakers, software companies, and consumer groups to discuss connected cars, including current innovations and challenges in the field of data privacy. Acting FTC Chairwoman Maureen Ohlhausen opened the day by asserting that regulators will need to show “humility” in trying to understand the risks associated with connected cars. However, she emphasized that the FTC will still use their enforcement authority against those who misuse consumer data, while taking care not to conflict with NHTSA’s oversight efforts. Terry Shelton, acting executive director of NHTSA, agreed with these goals.  The day’s panels focused on three main themes:

Safety – Fewer Accidents, Better Recall Compliance, and Privacy

Connected cars are expected to be able to decrease accidents and traffic fatalities. According to Terry Shelton, Acting Executive Director of NHTSA, 94% of fatal car accidents are due to human error. Additionally, both Shelton and Acting FTC Chairwoman Ohlhausen emphasized that the number of automobile-related fatalities has risen considerably in recent years.

It is less clear what happens when the artificial intelligence (AI) systems responsible break down. As cars become better able to make decisions on their own, the question of liability when a mistake occurs will be brought to the forefront. However, connected cars may increase compliance with safety recalls as self-driving cars may bring themselves into the shop for repair, and manufacturers will more easily be able to trace automated cars that have not been updated. The panel also discussed whether consumers should be allowed to opt out of sharing safety data and whether safety concerns may be used as excuses to collect information for commercial use.

Data – Notice and Consent, Types and Use of Data

As is the case with all connected devices, data collection and use presents many questions. Current technology allows devices to use driving patterns to detect drowsy driving, but newer devices will use biometric data for this purpose.  Depending on how the data is gathered, mechanisms for consumer notice and consent remain a challenge.

Stephen Pattison of ARM offered three important categories of data that may be taken from connected vehicles. The first is information linking the user to the vehicle. He asserted that this is the most sensitive information, and should be controlled by the consumer. The second is information that is brand sensitive, and may be of interest to competitors. This also includes information about individual components of the car. It will be up to the manufacturer how and when this information is shared. The third category is non-identifying information such as road conditions. This information is useful for other companies and law enforcement to use under some agreement that outlines the terms of use.

Panelists noted that the information produced by these vehicles is not encrypted or anonymized, as doing so would destroy the value of the data. It is important for the car or car system to be able to understand why a mistake occurred, or be able to make choices using very granular data, and share that data either with itself or in vehicle to vehicle communications to make other cars smarter and more able to make those decisions as well.

After-market products that are purchased by consumers and voluntarily placed into their cars are also collecting data. These include devices such as remote start, backup cameras, or an insurance dongle. While there is more consumer acknowledgement that these devices will be tracking personal information, the panelists at the workshop were in general agreement that more information should be given to consumers in clear and concise ways to enable them to make informed choices.

Security and Privacy – It’s Not If, But When A Breach Will Happen

One phrase that was repeated during the conference was: it is not a question of if, but when a breach will happen. Carrie Morton of the University of Michigan’s Mcity automated-vehicle research center explained that consumers are often “okay with the tradeoff” of exposing their personal driving information if they see a benefit. However, there is some information that even the most connected of drivers do not want exposed. While it may be true that consumers care less about who has their data is than what is being done with it, this cannot be mistaken for a lack of care concerning data privacy in general.

Earlier this year, NHTSA released a set of best practices to protect connected cars against cyberattacks and data breaches. These included a push for earlier integration of breach detection, a feature which Jeff Massimilla of GM said they are building into their cars from the beginning. NHTSA will look to the FTC for support in enforcing these regulations. There was also support from some panelists for harsher FTC sanctions for those that unlawfully access or re-identify anonymized data, as the data will likely be easy to de-anonymize.

*          *          *

We’ll continue to follow these issues and related connected product developments here at Ad Law Access.

 

Summer Associate Carmen Tracy contributed to this post. Ms. Tracy is not a practicing attorney and is practicing under the supervision of principals of the firm who are members of the D.C. Bar.

As part of the FTC’s ongoing review of the needs, costs, and benefits of regulations, the agency recently announced it is reviewing the following rules:

  • The Picture Tube Rule requires manufacturers to base screen size measurements on the horizontal measure of the viewable area, unless the alternative method of measurement is clearly disclosed. This rule was originally intended to help consumers compare products, but with the changes in television technology. In determining whether the rule is still needed, relevant concerns include changes in television technology such as the incorporation of plasma, LED, OLED, and other similar materials in flat display screens. The full list of questions the FTC hopes to address can be found on the Notice of Public Rulemaking here. Comments are due August 31.
  • The FTC is also seeking comment on a proposal to eliminate the “housemark” provisions of the Textile Rules. The housemark provisions require marketers who want to use a “housemark” (a distinctive mark used to identify all a firm’s products) on a textile’s tag in lieu of their business name only if they first register their housemark with the Commission. It is the agency’s position that that provision, imposed in 1959, is no longer necessary because trademark owners can easily be identified by searching online or via the U.S. Patent and Trademark Office website. Therefore, the FTC believes that removing these requirements will reduce compliance costs and increase firms’ flexibility. Comments are due by July 31.
  • The FTC is seeking public comment on its CAN-SPAM Rule, which requires a commercial email to contain accurate header and subject lines, identify itself as an ad, include a valid physical address, and offer recipients a way to opt out of future messages. The FTC is seeking comment on whether consumers have benefitted from the Rule, whether it should be modified, the costs of compliance, whether it should be amended to account for technological or economic changes, among other things. Comments are due by August 31.
  • The Energy Labeling Rule is also being edited to eliminate burdens on the industry and account for new products. The Energy Labeling Rule requires yellow EnergyGuide labels on certain appliances to help consumers compare similar models using estimated operating cost and energy consumption ratings. The comments period for this change has ended. The FTC sought public comment on these changes in September 2016. The accepted changes eliminate obsolete marking requirements for plumbing products, exempt certain ceiling fans from labeling requirements, and update the labels to cover electric instantaneous water heaters.

Overall, this announcement is consistent with the FTC’s recent systematic review of rules and guides. We will continue to track the comments and provide updates on any important developments.

 

Summer Associate Carmen Tracy contributed to this post. Ms. Tracy is not a practicing attorney and is practicing under the supervision of principals of the firm who are members of the D.C. Bar.