A few weeks ago, we wrote about an interesting development in what had been a fairly standard Federal Trade Commission (FTC) Made in the USA (MUSA) settlement. In short, the company had some major beef with the FTC’s press release about its case. The company and its owner filed a motion to get out of its settlement and to make the FTC change its press release, which, among other things, accused the company of “lying.”
For some time now, dark patterns have been quite the trending topic for both marketers and privacy professionals. Regulators have frequently railed against dark patterns that purport to manipulate user choices, usually through manipulative user interfaces. A bipartisan group of lawmakers introduced legislation called the DETOUR Act that would ban dark patterns. And outside this country, the European Data Protection Board issued some interesting guidelines on the topic.
In a rare example of a sweepstakes leading to litigation, Coinbase and its promotion agency, Marden-Kane, were sued over a sweepstakes run by Coinbase and administered by Marden-Kane titled “Trade Doge. Win Doge.” As part of that sweepstakes, Coinbase offered prizes totaling $1.2 million of Dogecoin to individuals who purchased or sold $100 worth of the DOGE cryptocurrency on the Coinbase exchange. Of course, in order to comply with federal and state lottery laws, the sweepstakes rules also included an alternate method of entry (AMOE), which allowed consumers to enter for free without making a purchase. Specifically, under federal and state laws, a promotion that contains all three elements of prize, chance and consideration is considered a lottery and is generally unlawful outside specific contexts, such as licensed casinos and state lotteries. Since sweepstakes by definition include the elements of chance and prize, the element of consideration must be eliminated in order for the promotion to be lawfully conducted. While many sweepstakes, including the Coinbase promotion, award sweepstakes entries in exchange for a purchase or payment, they rely on an AMOE to eliminate the element of consideration. In short, as long as there is also a free way to enter the sweepstakes, entries can be given to those who make a purchase. In this case, although Coinbase and Marden-Kane did include an AMOE, the plaintiffs challenged the promotion on multiple grounds. First, the plaintiffs claimed that the sweepstakes was a lottery notwithstanding the existence of an AMOE. Second, they alleged that even if there was an AMOE, it was not adequately disclosed and the promotion therefore violated various sweepstakes disclosure requirements, was misleading and deceptive, and violated the California Consumer Legal Remedies Act (CLRA).
After a surprise three-month hiatus, we are back in business with our Federal Trade Commission (FTC or Commission) public and totally unscripted meetings. Candidly, we were a bit surprised to see the return of these meetings, but not quite as surprised as the realization that Kate Bush had the Song of the Summer in 2022. This also was the first Commission meeting since Commissioner Noah Phillips announced that he would be leaving the agency at an unspecified time in the fall. There’s no intel on where he is going, but campaigning for his slot has apparently already commenced.
Because I’m someone who is inherently suspicious, my antennae perked up the other Friday when the Federal Trade Commission (FTC) released its annual strategic planning documents. Friday releases in the summer always make me suspicious (what are you trying to bury on this Friday afternoon when I am pondering the weekend?); further, these documents included one Republican commissioner’s (Christine Wilson) dissent and one Republican commissioner not participating (Noah Phillips). These reports are usually pretty noncontroversial, but not this time around.
2022 continues to be the Year of the Review for consumer protection law enforcers. We have seen several cases already this year, and the latest suit has the added bonus of the Federal Trade Commission (FTC) teaming up with a bipartisan group of six states to sue one company and three individuals. The company of the day is Roomster, a platform that connects people with roommates or rental properties. The individual named defendants are Roomster’s co-owners, who are also the CEO and chief technology officer, as well as an individual who allegedly provided Roomster with the fake reviews.
P.T. Barnum famously said, “There’s no such thing as bad publicity.” Oscar Wilde, however, gave that quote his own spin and said, “There’s only one thing in the world worse than being talked about, and that is not being talked about.” Well, some folks most definitely disagree when a whole settlement potentially is tanked over a press release.
The other week, the Federal Trade Commission (FTC) announced a new law enforcement action against a marketer of personal protective equipment that allegedly violated multiple laws in connection with Made in the USA (MUSA) claims that it made for its products. The agency alleged that the company (and its owner) violated the FTC Act and the COVID-19 Consumer Protection Act through certain efficacy claims, and it violated the MUSA Labeling Rule by using MUSA labels when the products used a significant number of imported components. The company and owner settled for a suspended redress judgment and a $157,000 civil penalty.
We are not quite at the Matrix moment of a red pill/blue pill choice yet, but we are moving closer every day to the possibility of a fully immersive virtual world. And the regulators and watchdogs are already thinking about how we can protect the kids when they venture not outside in the real world but inside to the parallel online metaverse. On Aug. 23, the BBB National Programs’ Children’s Advertising Review Unit (CARU), the self-reg watchdog responsible for monitoring ads directed to people U13, issued a new compliance warning for advertising practices directed to children in the metaverse. Vice President of CARU Mamie Kresses explained that this warning “puts advertisers, brands, influencers and endorsers, developers, and others on notice that CARU’s Advertising Guidelines apply to advertising in the metaverse and that BBB National Programs’ CARU will strictly enforce its Guidelines against metaverse advertising.”
A recent federal court decision found that FleetCor, a company that sells fuel card services to businesses, and its CEO had violated the Federal Trade Commission (FTC or Commission) Act through a series of deceptive and unfair acts and practices. It is not every day that the FTC sues the CEO of a publicly traded company, and it is even less often that we see a federal court opinion on the topic, so this decision warrants a deep dive.
From Eminem to Snoop Dog, Tony Hawk to Lionel Messi, William Shatner to Brie Larson, music, sports, and Hollywood celebrities have eagerly jumped on the NFT (non-fungible token) bandwagon. Whether launching their own collections, purchasing an expensive profile pic, or simply endorsing new artists, celebrities have embraced blockchain technology and have been extolling the virtues of owning a unique digital collectible across their social media platforms.