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In 2017, being a “social media influencer” can mean big bucks. Companies are increasingly eager to pay individuals with large social media followings substantial sums to promote products in the hopes of reaching millions of potential customers quickly. And consequently, the Federal Trade Commission (the “FTC”) is paying attention more than ever. If you’re being paid to promote a product on your Instagram account, the FTC wants you to let the world know. . . or else.
Continue Reading #CAUTION: FTC Ramps Up Enforcement of and Education on Social Media Influencer Disclosure Requirements

This is not a drill.

Companies and law enforcement agencies around the world have been left scrambling after the world’s most prolific ransomware attack hit over 500,000 computers in 150 countries over a span of only 4 days. The ransomware – called WannaCry, WCry, WannaCrypt, or WannaDecryptor – infects vulnerable computers and encrypts all of the data. The owner or user of the computer is then faced with an ominous screen, displaying a countdown timer and demand that a ransom of $300 be paid in bitcoin before the owner can regain access to the encrypted data. The price demanded increases over time until the end of the countdown, when the files are permanently destroyed. To date, the total amount of ransom paid by companies is reported to be less than $60,000, indicating that companies are opting to let their files be destroyed and to rely instead on backups rather than pay the attackers. Nevertheless, the total disruption costs to businesses is expected to range from the hundreds of millions to the billions of dollars.
Continue Reading WannaCry Ransomware Alert

In response to a petition from a coalition of consumer groups last year complaining about the need for disclosures by social media influencers, the FTC recently announced on April 19, 2017 that it had issued more than ninety letters reminding influencers and brands that “if there is a ‘material connection’ between an endorser and the marketer of a product – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement.” The FTC explained that material connections could “consist of a business or family relationship, monetary payment, or the provision of free products from the endorser.” A copy of the form of the letter, which explains that clear and conspicuous disclosures are required can be found here.
Continue Reading Brands Beware!!!! FTC Scrutinizing Influencer Posts for Compliance with Endorsement Guides

On December 14, 2016 the United States Congress passed an act known as the “Consumer Review Fairness Act of 2016” (“CRFA”)[1]. The stated goal of this new legislation is “to prohibit the use of certain clauses in form contracts that restrict the ability of consumers to communicate regarding the goods or services offered in interstate commerce that were the subject of the contract.” The reach of the legislation’s protection of honest consumer reviews and opinions extends beyond content that may be posted on a company’s own website, as the Federal Trade Commission has clarified that the CRFA “protects people’s ability to share their honest opinions about a business’s products, services, or conduct, in any forum, including social media.”[2] Subject to certain exceptions under the CRFA relating to content that a company may be able to remove, edit, or suppress, CRFA generally provides that a provision contained in a form contract is void at inception if the provision: (i) “prohibits or restricts the ability of an individual who is a party to the form contract to engage in a covered communication;” (ii) “imposes a penalty or fee against an individual who is a party to the form contract for engaging in a covered communication; or;” or (iii) “transfers or requires an individual who is a party to the form contract to transfer to any person any intellectual property rights in review or feedback content, with the exception of a non-exclusive license to use the content, that the individual may have in any otherwise lawful covered communication about such person or the goods or services provided by such person.” Sections of the CRFA prohibiting and invalidating covered contract clauses became effective as of March 14, 2017, while sections providing for Federal Trade Commission and State enforcement become effective as of December 14, 2017.
Continue Reading Consumer Review Fairness Act’s Point of “No Return”

The Court of Justice of the European Union ruled this morning that the Safe Harbor regime, which enables transatlantic data transfers from the European Union to the United States, is invalid, thereby giving each national supervisory authority the chance to revisit the question of whether the U. S. provides an adequate level of protection for EU citizens’ data.  A copy of the decision be found here.
Continue Reading US Safe Harbor Regime Invalidated by Europe’s Highest Court

The Federal Trade Commission recently proposed several updates to the Children’s Online Privacy Protection Act of 1998 (COPPA).

COPPA currently provides that operators of websites and other online services that collect personal information online about children under 13, or whose websites or services are directed at children under 13, must:Continue Reading FTC Proposes Updates to Children’s Online Privacy Law

The preliminary Staff Report issued by the FTC earlier this month is the most aggressive effort by the FTC to date on the issue of online and mobile privacy generally. The preliminary Staff Report proposes a “do not track” mechanism along with an overall online privacy framework that would rigidly regulate how information is collected both online and through mobile devices, how it can be used, and how it must be stored. Deviating from the distinction between “personally-identifiable information” and “non-personally-identifiable information” that has formed the foundation for other privacy regulations and legislation, the framework proposed in the preliminary Staff Report maintains that such dichotomy is no longer relevant. Because this is arguably a profound change in the existing state of regulation in this area, the preliminary Staff Report is being circulated for comment before it becomes final. This article provides a basic outline of the proposed framework for those who may not already be familiar with the preliminary Staff Report.
Continue Reading The Federal Trade Commission’s Proposed Framework For Consumer Privacy Protection – The Basics