On August 9, the US District Court of Georgia ruled that the FTC had provided “broad and detailed evidence” for its allegations that a tech company and its CEO engaged in deceptive advertising and unfair fee practices in violation of Section 5 of the FTC Act. The FTC’s 2019 complaint alleged the defendants made deceptive representations to customers and charged hidden, unauthorized fees in connection with the company’s “fuel card” as well as through co-branded cards, to companies in the trucking and commercial fleet industry. The FTC’s factual allegations include the following:
The FTC is seeking public comment on proposed changes to its Endorsement Guides. These changes aim to strengthen the guidelines against advertisers posting falsely positive reviews or by manipulating reviews by suppressing negative ones.…
Tapjoy, Inc. (“Tapjoy”), a mobile advertising company, settled FTC allegations that it failed to provide promised in-game rewards to consumers. Tapjoy operates an advertising platform that works within mobile games and offers in-game virtual currency to users who complete the activities of third-party advertisers (i.e. purchase products, sign up for a free trial, take a survey). Despite hundreds of consumer complaints, Tapjoy failed to deliver on its promises to consumers who earned in-game rewards.
Continue Reading Mobile Advertising Company Gets Flack from FTC for Failure to Deliver Upon Advertised Promises
Brands and influencers could unknowingly be violating the FTC’s endorsement rules by using TikTok to promote paid posts and sponsored content without including the necessary disclosures. TikTok offers native direct download and social sharing tools that enable users to share TikTok videos on other social media platforms without the caption and hashtags from the original video description, which may include disclosures that were included as required by the FTC to identify paid advertising.
Continue Reading Native TikTok Tools May Create Liability for Brands and Influencers
Sunday Riley launched her skincare firm Sunday Riley Modern Skincare, LLC (“SRMS”) in 2009 and its skincare products, including Good Genes, Power Couple, U.F.O., C.E.O., Luna and Tidal, have enjoyed tremendous success, having been featured, promoted, and sold online through Sephora and its website, www. Sephora.com. On October 21, 2019, the Federal Trade Commission (“FTC”) announced a consent order in an action for violation of Section 5 of the FTC Act against Ms. Riley and SRMS for posting false reviews of its Sunday Riley products and falsely representing that the false reviews reflected the opinions of ordinary customers of the products. The FTC’s proposed continuing consent order provides: (1) Riley and SRMS are prohibited from misrepresenting the status of any endorser or person providing a review of a product, including misrepresenting that an endorser or reviewer is an independent or ordinary user of the product; (2) Riley and SRMS are required to clearly disclose any unexpected material connection between SRMS and anyone reviewing a product; (3) Riley and SRMS are required to instruct employees, officers and agents as to their responsibilities for disclosing their connections to SRMS and any Sunday Riley product they endorse and that SRMS obtain signed acknowledgments from any endorser; and (4) Riley and SRMS are required to submit compliance reports to the FTC within one‑year of the order and to create records for twenty years and retain them for five years.…
Continue Reading “Good Genes?”: Maybe Not. FTC Takes Action Against Sunday Riley and Sunday Riley Modern Skincare, LLC For Employees False Reviews
The Federal Trade Commission recently released a Staff Report regarding consumer recognition of native and search advertising entitled “Blurred Lines”, summarizing its findings from its self-styled “exploratory research”. Unsurprisingly, the FTC concluded that the use of disclosures consistent with prior FTC guidance increased the likelihood that consumers would recognize online ads as ads.
Continue Reading Reading Between the Blurred Lines
On December 12, 2017, the FTC hosted a workshop to discuss informational injuries that consumers may suffer when their personal information is misused. Discussion topics included the types of informational injuries consumers suffer and business and consumer perspectives about costs, benefits and risks of collecting information.
Continue Reading FTC Workshop Provides Insight on Best Practices to Mitigate Informational Injuries
In our previous blog post, “Brands Beware!!! FTC Scrutinizing Influencer Posts for Compliance with Endorsement Guides,” we reported that the Federal Trade Commission (“FTC”) had issued more than 90 letters to brands and influencers, making it clear that it is paying close attention to influencer-based marketing. More recently, the letters have been made publicly available, providing valuable insight into the types of disclosures that the FTC considers unacceptable or inadequate.
Continue Reading A Deeper Dive Into the FTC Crack-Down on Social Media Influencers: What You Should Know Before You Post
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
Enforcement of the Digital Advertising Alliance “Application of the Principles of Transparency and Control to Data Used Across Devices” (DAA Cross-Device Principles) officially began on February 1, just a week after the FTC issued a staff report discussing the application of the FTC Online Behavioral Advertising Principles in the context of “Cross Device Tracking” and suggesting that the DAA Cross-Device Principles, while commendable, could be stronger.
Continue Reading FTC / DAA Extend Data Privacy Focus to Cross-Device Tracking
The Federal Trade Commission (“FTC”) has been cracking down on brands for paying Instagram users to endorse their products or to share brand content without disclosing the relationship. Indeed, the recent settlements entered between the FTC and several media and entertainment companies as well as a specialty retailer make it clear that the FTC is paying close attention to endorsements of all kinds – whether by celebrities, sponsors, or paid “influencers.”…
Continue Reading Using Hashtag #Disclosures in Social Media Advertising