Articles Posted in Federal Trade Commission

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fda-logoSociety is driven by word-of-mouth endorsements. Likewise, it’s instinctive to share self-prescribed remedies that alleviate our various ailments. A colleague recommends ginger tea for a cold. A friend tells you how lavender essential oil helps with anxiety and insomnia. We habitually rely on such recommendations. However, a business making such statements must be careful that any claims are substantiated and that marketing efforts do not run afoul of any laws or regulations. This is especially true now, where consumers are desperately hunting for hygienic methods to prevent the spread of the novel coronavirus and to treat symptoms stemming from COVID-19. Amidst the seemingly uncontrollable COVID-19 pandemic, it might seem like the perfect time for dietary supplement manufacturers and holistic medicine practitioners to tout the benefits of their products and services. But is it?

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iStock-1051379940-300x200By now, most people know that advertising on social media requires certain disclosures so as to avoid the ire of the Federal Trade Commission (FTC), which is tasked with protecting consumers from fraudulent, deceptive and unfair business practices. FTC rules concerning advertising on social media track the basic rules of traditional advertising law. For example, advertising must be truthful and not misleading, advertisers must have evidence to back up their claims (a.k.a., “substantiation”), and advertisements cannot be unfair.

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Computer-generated imagery (CGI) is the application of 3D computer graphics to special effects. CGI is used in films, television programs and, most recently, on social media. These images are not limited to modeling and practicing yoga … they even attend red carpet premiers.

Technological advances may make CGI influencers better for business than their human counterparts. There is no risk of human issues or error, such as profanity or criminal history. They allow for more control over an ad campaign in general and, in particular, the CGI’s narrative. This can help mediate the risk of unpredictability that comes with human influencers. Most importantly, CGIs can eliminate certain expenses, such as pricey flights.

CGIs can do everything human influencers can do, but better … or can they?

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CMA-influencers-300x300Be clear. Be open. Be upfront. That’s what influencers need to do to build a following. But those same standards could just as easily describe the legal guidelines applicable to influencers Fall short, and influencers may violate the law.

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USFederalTradeCommissionLast week, the FTC brought its first action against a social media influencer for failing to make appropriate disclosures on sponsored posts. While it had previously prosecuted companies who pay influencers for posts such as Lord & Taylor and Warner Brothers, this marks the first time the FTC has pursued an influencer.

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USFederalTradeCommissionAs we have written about time and time again, and as celebrities and influencers gain more and more followers on social media platforms such as Instagram, Snapchat and Twitter, they must exercise care when endorsing the use of sponsored products and services. Under the current legal landscape, posting endorsements on social media can not only affect the user’s brand, it can also expose one to legal liability. For its part, the Federal Trade Commission provides clear regulations regarding the posting of endorsements for products or services. When a product or service is featured on a social media post, and the poster is receiving some sort of compensation for the post (including receiving the product/service at a discount or for free), a poster may have to disclose that he or she is somehow being compensated, if the audience’s knowledge of the sponsorship would affect the credibility they give the poster’s endorsement. The FTC’s website contains common Q&As regarding when an endorsement must be disclosed on social media and how it must be done. Continue Reading →

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Every day, businesses extend more of their services to the internet in an effort to cater to millennials and upcoming generations of consumers. Those in the wine industry are no exception. Though somewhat slow to adopt online and digital marketing in the beginning, businesses in the alcohol industry are catching up. One site called the Tasting Room, touted as the fastest growing wine club in the country, offers an online questionnaire that can determine affordable wines that a customer supposedly would like and then deliver them directly to the customer’s door. Part of the assessment involves receiving a tasting kit for the consumer to taste and rate and then completing a survey on the company’s website. Tasting Room’s algorithm then determines appropriate wine selections for you. The customer also rates subsequent shipments so that the wine selections become even more finely tuned over time.

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Did you know that your devices are following you and talking amongst themselves? Creepy, right? From ordering products from your smartphone that you added to your shopping cart on your laptop’s browser to streaming a movie from your smartphone that you didn’t finish watching on your desktop, our online and mobile devices have integrated themselves into our lives and taken liberties that may not be apparent to us.

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ashley-madison-300x200On December 14, 2016, operators of online extramarital dating and social networking website AshleyMadison.com came to an agreement with the Federal Trade Commission, and several States, to settle FTC and related state charges that the website deceived consumers and failed to protect 36 million users’ account and profile information. As we discussed immediately following the July 2015 breach (and in several later posts) the data of some 36 million AshleyMadison.com accounts was posted online. It was reported by KrebsOnSecurity that the breach included the theft of user databases, financial records (including salary information), and other records from AshleyMadison, Cougar Life, and Established Men, three social networking web sites operated by the Toronto, Canada-based firm Avid Life Media, now known as Ruby Corp.

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Worried about a company retaliating against you when you post a negative review on Yelp or TripAdvisor? Worry no longer because Congress has your back. Last week, Congress passed a law that will make it illegal for companies to retaliate against U.S. consumers who post negative reviews online.

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