On August 1, 2017, the Advertising Self-Regulatory Council (ASRC) and Council of Better Business Bureaus (CBBB) announced that Laura Brett has been appointed as director of the National Advertising Division (NAD). Ms. Brett has served as Acting Director of NAD since Andrea Levine, former Director of NAD, retired after 20 years as NAD Director. She joined NAD as a Staff Attorney in 2012 and was later an Assistant Director. Prior to joining NAD, Ms. Brett was a litigator at Willkie Farr & Gallagher and a solo practitioner. She was also a member of the Rye City Council and Deputy Mayor of Rye, NY.
At NAD, Ms. Brett has authored decisions in numerous cases challenging the adequacy of disclosures in native advertising formats, sponsored content, and other online and social media advertising issue. Before the FTC adopted its long-awaited native advertising guidance, Ms. Brett used the NAD’s self-monitoring authority to fill a regulatory gap and bring several challenges of native advertising. In her decisions, she pushed for improved disclosures and provided detailed guidance for companies engaged in novel forms of online advertising. She has not shied away from using NAD’ s authority to challenge the advertising practices of well-known tastemakers with large social media followings, challenging the Kardashians and Kate Hudson this year.
Some of these decisions are highlighted below.
- Earlier this year, as part of its routine monitoring, NAD brought a challenge against Kate Hudson’s Fabletics athletic wear company’s advertising for the Fabletics VIP membership program, which charges members $49.95 per month unless they “skip” a month between the 1st and 5th of that month or cancel their membership. Fabletics advertises steep discounts for “New VIP Members” without disclosing in the initial contact with the consumer the terms of VIP membership. NAD was concerned that reasonable consumers would not understand that members are obligated to “Shop or Skip” each month by the 5th of the month to avoid a $49.95 charge. NAD was also concerned that the website did not clearly disclose the material limitations of the discount offer. JustFab, Inc./Fabletics, NAD Case Report #6091 (June 2017).
- NAD opened an inquiry into the Kourtney Kardashian, Khloe Kardashian, and Kylie Jenner’s marketing of FitTea on Twitter, Instagram and other social media platforms without disclosing that the posts were paid endorsements and not spontaneous. Citing the Kardashians’ modification of their posts to disclose material connections to FitTea, NAD did not review the matter on the merits. Kardashian, Kourtney, et. al./FitTea, NAD Case Report #6046 (Jan. 2017)
- In the first “native advertising” case after the FTC issued its Native Advertising guidance, NAD brought a routine monitoring case against Joyus, an online shopping retailer, for its placement of featured products on the People.com website. Consumers reading the “Style Watch” section of people magazine online can click on “Stuff We Love” and see a list of videos labeled “Joyus.” Once the videos play, several elements indicate that the video is an online shipping video. However, while the videos clearly disclosed that the content was advertising, NAD was concerned that consumers would not understand that the “Stuff We Love” page was a partnership between People and Joyus to promote Joyus products. NAD thus recommended that Joyus disclose on the “Stuff We Love” link that consumers are clicking on advertising or make clear that the links are shopping links. Joyus, Inc./Dr. Brandt’s Needles No More Wrinkle Relaxing Cream, NAD Case Report #5956 (May 2016).
- In 2014, as part of its routine monitoring, NAD challenged the identification of sponsored articles placed on content widgets on publisher websites by the American Express OPEN Forum website. Although the ad units were labeled “OPEN Forum,” NAD was concerned that this name did not clearly communicate the commercial nature of the American Express OPEN Forum website. American Express Co./OPEN Forum Sponsored Content, NAD Case Report #5760 (Sept. 2014) attorneys.
Under Ms. Brett’s leadership, NAD will likely continue its focus on social media, influencers, and “new” advertising platforms.
What Does this Mean for NAD?
With Ms. Brett’s promotion to Director, we can expect a smooth transition at NAD. As noted, she has served as Acting Director since early this summer. In the short term, NAD attorneys will be busier with fewer attorneys to handle a busy caseload. In addition to Andrea Levine’s departure and Ms. Brett’s elevation, Rebecca Griffith recently left her senior staff attorney position at NAD. NAD is currently searching for two new staff