Federal Trade Commission (FTC)

FTC Moves Ahead Enforcing Endorsement Cases

A few months ago, acting Federal Trade Commission Chairwoman Olhausen stated that the FTC should shift focus to cases of actual harm, leaving many to wonder whether FTC would still actively enforce endorsement cases. However, in April, the FTC sent out ninety letters to brand influencers and marketers reminding those influencers and marketers to clearly and conspicuously disclose their relationship to brands. On the heels of these April letters, the FTC filed a complaint and ultimately reached entered a proposed settlement order (“order”) with two brothers that relied on deceptive endorsements and misleading review websites to sell Infinity and Olympus Pro brand trampolines.


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Photo Credit: Jason Trim (Flickr)

Vizio Reaches $2.2 Million Settlement With FTC, New Jersey, For Failing to Obtain Viewer Consent to Track and Sell Viewing Habits to Third Parties

Traditionally, advertisers purchase ad inventory during television programs based on basic demographic information regarding viewer attributes. Thus, while ads may reach viewers of a particular gender and age range, those ads may not necessarily reach the consumers that are most interested in their products or services.  Thus, advertisers are increasingly interested in more finely targeting their advertising and sending a specific television commercial to a specific household based on the viewing activities in that household.  In order to pinpoint their targets, marketers rely on data extending beyond demographic information that includes information on consumer viewing and internet habits.  While targeting commercials to specific households can be highly beneficial to marketers (allowing them to send their ads to the consumers most interested in seeing them) and consumers (showing them the ads they most want to see), marketers must remember that the basic requirements of advertising law still apply.  Thus, in collecting data, marketers must ensure that they clearly disclose their data collection practices up front, obtain consent from consumers before collecting and sharing highly specific information regarding their viewing practices, and make it easy for consumers to opt out.


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Photo credit: Bernard Spragg (Flickr)
Photo credit: Bernard Spragg (Flickr)

On February 10, 2017, the Federal Bar Association will host a day-long Fashion Law Conference at Parsons School of Design (Starr Foundation Hall in the New School’s University Center) during New York Fashion Week!

Please join Crowell & Moring’s Frances Hadfield and Preetha Chakrabarti, as well

The incoming administration promises big changes to federal consumer protection administration and enforcement. On January 5, 2017, Crowell & Moring’s Advertising & Product Risk Management Group hosted a webinar in which they discussed likely changes on the horizon to the Federal Trade Commission, Federal Communications Commission, and Consumer Financial Protection Bureau.

Please click here to

Photo credit: Flickr

Retailers and consumer products companies need to be aware of a new law affecting negative online reviews. On December 14, 2016, President Obama signed the Consumer Review Fairness Act of 2016 (H.R. 5111) into law. The Act voids “non-disparagement clauses” in form contracts designed to prevent consumers from posting negative comments and online reviews of products and services. The Act also makes it unlawful for companies to include these clauses in their form contracts. The Federal Trade Commission will enforce the Act in the same way it enforces against unfair or deceptive trade practices under its jurisdiction; state attorneys general may also enforce the Act under certain conditions. For existing contracts, the Act will take effect in 90 days and FTC/state enforcement may commence one year from now.


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On Monday, September 14, the FTC announced that it had sent letters to five providers of environmental seals and certifications and 32 individual companies using such seals and certifications, warning them against potentially overbroad, deceptive uses. The latest edition of the FTC’s Green Guides contains a section dealing with the use of environmental seals and certifications. 16 C.F.R. Part 260.6. The Guides make clear that labeling a product with an unqualified environmental seal runs the risk of conveying an unsubstantiated and overbroad claim about the overall environmental benefits of a product. Furthermore, third-party seals and certifications do not relieve marketers of the obligation to substantiate all of the claims that they convey to consumers, including claims relating to the seals and certifications. For that reason, the FTC recommends that such seals and certifications be prominently qualified in order to explain to consumers exactly the attributes on which the certification is based. In a blog post regarding the release, the FTC reminds marketers who use a green seal or certification on products that they must “explain what the seal or certification is based on, and it has to be specific. For example, a marketer could say the product is ‘biodegradable’ or ‘recyclable.’ It’s not enough for a seal to just say ‘green’ or ‘eco-friendly;’ in fact, that could be deceptive.”

Chris FTC Enviro Seals Image

The letters to the certifiers focus on the risk of “unqualified general environmental benefit claims [which] likely convey a wide range of meanings, including that a product has specific and far-reaching environmental benefits and that an item has no negative environmental impact.” As the Green Guides state,
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On Tuesday, September 8, 2015, the House passed the E-Warranty Act of 2015, which, if enacted, would require the FTC to revise the Magnuson-Moss Warranty Act to allow manufacturers to satisfy the Act’s requirements by digitally posting consumer product warranties on their websites.

The E-Warranty Act would permit manufacturers to provide warranty information online

The Third Circuit’s Monday decision in FTC v. Wyndham Worldwide confirmed the Federal Trade Commission’s (FTC) statutory authority to pursue enforcement actions for allegedly “unfair” data security practices under Section 5 of the FTC Act. Many believe that the decision will embolden the FTC to continue aggressively regulating what it considers to be unreasonable data

The Federal Trade Commission (FTC) has struck again in the data privacy world, this time at 13 companies that allegedly misrepresented in their privacy statements that they were U.S.-EU or U.S.-Swiss Safe Harbor certified. This latest enforcement sweep demonstrates the FTC’s privacy focus and reinforces the need for companies to make accurate public representations.

The FTC charged the 13 companies with misleading consumers and has proposed placing them under a familiar 20-year consent order. The consent order requires the companies to refrain from  misrepresenting privacy or security program adherence and to keep strict records for the FTC’s overview. For the next 20 years, any companies that disobey the consent order will be subject to a $16,000 civil penalty per violation.

The U.S.-EU and U.S.-Swiss Safe Harbor Frameworks (collectively, “Safe Harbor”) are the most popular of several mechanisms through which companies can legally transfer personal data from Europe to the United States. There are currently over 4,300 U.S. companies certified to the U.S.-EU Safe Harbor.

As FTC Chairwoman Edith Ramirez said this week, “The U.S.-EU and U.S.-Swiss Safe Harbor Frameworks are important agreements, and the FTC remains strongly committed to enforcing them. Companies must not deceive consumers about their participation in these programs.”

The FTC’s focus on Safe Harbor enforcement, and privacy enforcement in general, raises concerns for companies of all sizes. Indeed, the FTC has now undertaken 39 Safe Harbor-related enforcement actions against both small and large U.S. companies in the past five years. Here are five key items for companies to review based on the lessons learned from these settlements:


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