Ad Law News and Views - May 25, 2023
Welcome back to Ad Law News and Views.
Be sure to register for our upcoming webinars, Hot Topics in Green Marketing and INFORM Consumers Act – What Online Marketplaces and Sellers Need to Know.
See below for more information on topics, dates, and registration details.
UPCOMING EVENTS
Wednesday, May 31, 2023 at 12:00 pm ET
Hot Topics in Green Marketing
As more companies have started to develop Environmental, Social, and Governance (or “ESG”) goals and to make claims in advertising and in corporate reports about their progress towards achieving those goals, there has been increased scrutiny from regulators and the plaintiffs’ bar questioning whether companies can substantiate their claims. Unfortunately, the standards for evaluating these claims aren’t always clear, and well-meaning companies often find themselves the target of lawsuits or other challenges.
Please join us for this timely webinar about recent regulatory and class action developments and what they might mean for businesses looking to make “green” claims. Gonzalo Mon and Katie Rogers will discuss various topics that will help companies understand the risks and guardrails surrounding these claims.
Tuesday, June 13, 2023 at 12:00 pm ET
INFORM Consumers Act – What Online Marketplaces and Sellers Need to Know
In late June, a brand new law takes effect that could significantly affect online marketplaces and the companies that sell products there. As we discuss here, the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (INFORM Consumers Act) requires online marketplaces to:
(1) collect and verify certain information from “high-volume third party sellers,”
(2) suspend sellers that fail to comply,
(3) protect the data they collect from sellers, and
(4) make various disclosures to consumers.
The new law charges the FTC, the state AGs, and “other state officials” with enforcement; gives the FTC rulemaking authority; and authorizes substantial civil penalties for violations.
Please join us for a timely webinar on this topic. Partner Kate White will moderate a discussion with Partner Paul Singer about what the law requires, how it will affect online marketplaces and sellers, and how we anticipate the FTC and AGs will enforce it.
IN THE NEWS AND LATEST UPDATES
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AGs and AI: Transparency is Key
As we have previously reported, State Attorneys General have joined other enforcers in addressing the latest AI technology. At the recent 2023 NAAG Consumer Protection Spring Conference, two separate panels discussed how the AGs are focusing on AI.
H&M Wins Dismissal in Greenwashing Suit
Abraham Lizama purchased a turquoise sweater from H&M’s “Conscious Choice” collection, a line of clothing “created with a little extra consideration for the planet” which generally include “at least 50% of more sustainable materials.” Although we imagine that Lizama looked quite handsome in his sweater, he soon regretted his purchase and filed a class action against the retailer, accusing it of greenwashing because the sweater did not meet his view about what’s good for the environment.
FDA Updates Draft CPG Regarding Major Food Allergen Labeling and Cross Contact: What Manufacturers and Food Retailers Should Do Next
Earlier this week, FDA issued draft guidance for staff updating the agency’s existing enforcement policy regarding major food allergen labeling and cross-contact prevention. The updated guidance reflects the addition of sesame as a major allergen, discusses how allergens must be disclosed when used as an ingredient in packaged food, and details the preventive controls provisions in 21 CFR § 117 applicable to preventing allergen cross contact. The updated guidance also details the circumstances in which failure to properly declare allergens or prevent cross-contact render a food misbranded or adulterated. Stakeholders have until July 17th to submit comments.
Now and in 10: AG Consumer Priorities and Challenges Today and Tomorrow
Last week, State AG executives and consumer protection staff gathered for the 2023 NAAG Consumer Protection Spring Conference. After a warm welcome to Florida by John Guard, Chief Deputy Attorney General in Florida, first on the agenda was the much-anticipated discussion with Attorney General John Formella of New Hampshire and AG executives Lacey Mase, Chief Deputy in Tennessee, Jennifer Levy, First Assistant Attorney General in New York, and Nathan Blake, Colorado Deputy Attorney General for Consumer Protection. The panel was moderated by prominent Consumer Protection figures Jeff Hill, Executive Counsel in Tennessee and Susan Ellis, Division Chief of the Consumer Protection Division in Illinois.
Déjà vu: The 5th Circuit Hears Yet Another Challenge to Constitutionality of an Administrative Agency
In the past couple years, the Federal Trade Commission has gone 0 for 2 before the Supreme Court. In AMG, the Court found that Section 13(b) of the FTC Act does not provide the Commission with the authority to obtain equitable monetary relief. Last month, in Axon, the Court held that parties need not wait until the conclusion of administrative proceedings before challenging the constitutionality of the FTC’s structure, but may bring their complaints to district courts. Given this recent track record, the Commission probably wasn’t thrilled to find itself before the Fifth Circuit, defending against constitutional challenges raised by Traffic Jam Events, and its owner, David Jeansonne.
Google to Pay $8 M to Settle with Texas Over DJ Endorsements
In January 2022, the Texas Attorney General filed a lawsuit against Google alleging that the company engaged iHeartMedia DJs to provide endorsements for its Pixel 4 phone, even though they had never used it. In November 2022, the FTC and several state attorneys general announced settlements with Google and iHeartMedia over the same conduct. Although Texas settled with iHeartMedia, it continued to separately pursue its case against Google. Last week, the parties agreed to a settlement.
The FTC is Not the Only One Tracking Your Use of Health Information
The FTC has made news recently with its recent enforcement activity regarding companies’ alleged disclosures of consumer health data, as detailed in our recent post FTC to Advertisers: We’re tracking Your Use of Health information, and as evidenced by the FTC’s tentative agenda for its next open meeting later this month on potential rulemaking regarding amending the Health Data Breach Notification Rule (a point which is curious given its prior policy statement already attempting to expand its scope, which we discussed here).
Retailer to Pay $197 Million to Settle Pricing Claims
Over the past few weeks, we’ve posted about a few cases involving pricing claims, including a post discussing a lawsuit over a grocer’s BOGO offers, a post discussing a lawsuit over major retailer’s frequent sales, and a post discussing an NAD challenge over claims that a smaller retailer made about its sales. If those didn’t catch your attention, today’s post about a $197 million settlement should.
New Law Governing Online Platforms And Sellers Takes Effect In June – Are You Ready?
On June 27, 2023, “online marketplaces” (i.e., online selling platforms like Amazon and EBay) will have some brand new obligations. So will many of the third party sellers that operate on these platforms.
State AGs and Consumer Protection: What We Learned from . . . Connecticut Part I
Our State AG webinar series continues with Connecticut Attorney General William Tong and Chief of the Privacy Consumer Protection Section Michele Lucan. During our webinar, the Connecticut AG’s office described their structure and the tools available to them to enforce the state’s consumer protection laws. In particular, as the fifth state to pass comprehensive privacy legislation, AG Tong highlighted the AG office’s privacy priorities and agenda which we will focus on here in Part I. We will explore the more general consumer protection topics in Part II. In case you missed it, here is a recording of the webinar.
Advertising Lessons from the Survival Industry
My Patriot Supply (or “MPS”) and 4Patriots both make long-term survival food kits and related products. If a natural disaster strikes, if AI-powered bots wreak havoc on humanity, or if you just want to binge-watch your favorite shows and tune out the rest of the world, these companies have your back. But they don’t have each other’s backs.
Two-Faced? Coppertone Case Tests Whether Factually True Claims Are Deceptive
Can claims that are factually true still be deceptive? This is the question before a Connecticut federal court. Last summer, Tonya Akes, a consumer, sued Beiersdorf, Inc., maker of Coppertone sunscreen, alleging that Beiersdorf engaged in deception because it sold the SPF 50 Coppertone Sport Mineral Face sunscreen, which she alleges she believed was “specifically designed” for use on the face based on the front-of-pack claims, at twice the price as the regular Coppertone Sport Mineral sunscreen, despite the formulas being identical.
FTC Attempts End Run to Ban Meta from “Monetizing” Minors’ Data
The FTC took unprecedented action yesterday when it moved to impose what it describes as a “blanket prohibition” preventing the company from monetizing young people’s data. The FTC contends that this prohibition is warranted as a result of repeated violations of Meta’s 2020 consent order (“Proposed Order”).