Advertising and Regulation of CBD Products

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If you have been to any kind of spa, beauty supply store or health food store in the past four years, chances are you have seen, if not purchased, a product with cannabidiol (CBD). The 2018 passage of the Farm Bill removed hemp-deprived products, like CBD, from the Controlled Substances Act, leading to a flood of CBD products to the consumer marketplace that boast a wide variety of health and beauty claims, from relieved pain to lessened anxiety, among many others.

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$62 Million Is Something to Write Home About – the Opendoor Case

A recent Federal Trade Commission (FTC) lawsuit and settlement with Opendoor Labs Inc. (Opendoor) is a must-read even if you are not in the real estate business. But if you don’t want to actually read it, we’ve got you covered. The case raises a range of issues regarding how savings claims are made to consumers and provides some insights on when representations may cross the proverbial line into deception. For most consumers, selling a home is the most significant commercial transaction they’ll make, and the FTC action challenges a range of different representations being made during the process.

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3 Things to Address in Digital Media Agreements

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The ad creative has been produced and approved. The media plan has been crafted. Now it’s time to execute on the plan, and that involves buying the media – i.e., purchasing ad space to place your ads on different media channels (television, print, websites, etc.) so people can see them. Or maybe you’re a publisher looking to monetize your available ad space by selling it to advertisers. Either way, you may be wondering what issues you should be covering in those media agreements. Even if you rely on an agency to do the heavy lifting here, you’ll still want to understand what issues should be addressed. Listed below are three things you should be tackling in those agreements. Although this post focuses primarily on digital online media, such as websites, many of these concepts and takeaways could apply to traditional forms of media as well, such as traditional print media, outdoor billboards, and broadcast radio or television.      

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Not Every Payment Processing Case Is the Same – the Latest FTC Case Provides Some Helpful Reminders

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Most of the Federal Trade Commission’s (FTC) law enforcement actions involving payment processors have exclusively focused on allegations that processors did not do sufficient due diligence before onboarding questionable merchants. The latest payment processing case, however, has a bit of a novel twist and focuses instead on alleged deceptions aimed at the merchants that were using the defendant processor. Indeed, the case is a bit of a surprise, much like how I felt the other morning when I remembered that Renaissance had finally dropped. It (the case, not Renaissance) also provides some helpful reminders about three areas of interest to the FTC – small businesses, online disclosures and marketing in different languages.

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FTC and DOJ MOUs with NLRB Reflect the Administration’s Ongoing Focus on Restrictive Labor Relationships and the Gig Economy

Last week, the Federal Trade Commission (FTC) and the National Labor Relations Board (NLRB) announced that the agencies had entered into a new Memorandum of Understanding (MOU). The FTC press release touted the MOU as a big deal, stating that it would “bolster the FTC’s efforts to protect workers by promoting competitive U.S. labor markets and putting an end to unfair practices that harm workers.” The NLRB Press Release was a bit less definitive, describing it as “a partnership between the agencies that will promote fair competition and advance workers’ rights.” And this week, the Department of Justice (DOJ) Antitrust Division announced its own MOU with the NLRB.

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What Even Is Ad Tech?

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“What is ad tech?” That is a question I’ve been asked and have answered numerous times. I recently joined BakerHostetler’s Chicago office in the Digital Assets and Data Management Practice Group after spending almost eight years at Publicis Groupe, where I led a team of attorneys supporting business units focused on media, data and advertising technology (“ad tech”). As part of this transition, I’ve had the opportunity to meet many new lawyers at the firm and their existing and potential new clients, and that has required honing my proverbial “elevator pitch.” That elevator speech always includes a discussion of ad tech, starting with an explanation of what it is.

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A Flurry of Right to Repair Activity from the FTC – What You Need to Know

“Right to repair” is a consumer protection issue that is rapidly picking up steam. In addition to federal legislation that was introduced in 2022, there has been quite a lot of recent state legislative activity. And we have seen a lot more Federal Trade Commission (FTC) activity on the issue lately.

So what exactly is the right to repair? A 2021 FTC report to Congress, cleverly called “Nixing the Fix,” described the right to repair as addressing how manufacturers may limit repairs by consumers and repair shops, and how those limitations may increase costs and limit consumer choices. The report discussed the issue through a broad regulatory lens and discussed several potential FTC repair tools in this area, including the Magnuson-Moss Warranty Act. The Mag-Moss Warranty Act – not to be confused with Mag-Moss rulemaking – broadly addresses issues involving warranties for consumer products. The “anti-tying” section of the act generally prohibits warranty provisions that provide that a consumer will lose warranty coverage if they don’t use company parts for repair unless the company also provides those parts free of charge. There is a lot more to the act, but for today, that’s all we need to know. In short, the anti-tying provisions do not look kindly on warranty provisions that restrict repair options for consumers.

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Taking Another Look at Courts Interpreting Section 19 of the FTC Act

After the Supreme Court held that the Federal Trade Commission (FTC) could no longer use Section 13(b) of the FTC Act to seek equitable monetary relief in federal court, the agency quickly ransacked the sofa, seeking spare change and any other statutory tools it could find to compensate. Section 19 of the FTC Act contained language that came closest to mirroring aspects of what made 13(b) an effective tool for decades, but with some caveats.

Section 19 has two key uses. First, after a full FTC administrative litigation that ends with a cease and desist order, the FTC can use Section 19 to go to federal court and seek monetary relief for fraudulent and dishonest conduct. Second, for many rule violations, the FTC can go straight to federal court and use Section 19 to seek redress and/or civil penalties (though the DOJ has a role to play if the relief sought includes penalties). Section 19 provides that in both types of actions, the court may “grant such relief as the court finds necessary to redress injury to consumers … resulting from the rule violation or the unfair or deceptive act or practice, as the case may be. Such relief may include, but shall not be limited to, rescission or reformation of contracts, the refund of money or return of property, the payment of damages, and public notification respecting the rule violation or the unfair or deceptive act or practice, as the case may be; except that nothing in this subsection is intended to authorize the imposition of any exemplary or punitive damages.” Notably, disgorgement is not an enumerated remedy, but there is a lot in Section 19 that can allow the FTC to get some real recovery in certain cases.

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Dot Com Guideline Revisions Will Focus on Hyperlinks, Dark Patterns, the Metaverse and More

It has been two weeks or so since the FTC announced that it is going to take a close look at whether and how to revise the Dot com Disclosure Guides. For those who are new to this, the dot com guides (technically and annoyingly titled the “.com” guides) are a helpful source document to look at when you are trying to figure out how and when to make disclosures, particularly in digital advertising. Unlike the recent request for comments on the Endorsement Guides, which provided specific changes the agency was proposing, the Dot com request is more generalized, asking a series of questions about broad areas for consideration. 

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The 13th Public Commission Meeting – an AI Study About Online Scams and, Yes, Another Policy Statement

We spend many of our working hours – and far too many of our nonworking hours – talking about Federal Trade Commission (FTC or Commission) issues, and we can confidently state that no one has ever said to us, “I sure do wish the agency would issue yet another policy statement.” With that, we turn to the latest public Commission meeting – where, yes, another policy statement emerged.

But first, let’s talk about the latest FTC report, this one on the use of artificial intelligence (AI) to combat certain online harms, including scams, fake reviews, disinformation and hate crimes. Sometimes the FTC will do reports on its own initiative (such as the recently announced pharmacy benefit managers (PBMs) study), but other times, Congress will, through legislation, require the Commission to prepare a report on a specific topic, and that is often done as part of the agency appropriation process. Today’s report was one of those congressionally mandated studies.  

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