Last month, the Federal Trade Commission (FTC) announced an enforcement action against Evolv Technologies, alleging that the company made deceptive claims about the capabilities of its AI-powered security screening system, including in school settings. Among other allegations, the complaint alleged that Evolv advertised that its systems could reliably detect all weapons, but the systems consistently failed to detect guns and knives and routinely gave false alarms.

The FTC also announced a proposed settlement. Interestingly, the two sitting Republican commissioners, one of whom will likely be the acting chair after January 20, disagreed on the scope of the proper remedy under Section 13(b) of the FTC Act. While commissioners Andrew Ferguson and Melissa Holyoak both supported the FTC’s settlement with Evolv, they disagreed on the FTC’s authority to provide relief in the form of contract cancellation for school customers.

Continue Reading The Dueling Views of FTC Commissioners Ferguson and Holyoak on the Scope of Agency Authority

Episode 10 of Venable’s Ad Law Tool Kit Show, Season 2,is now available. Listen to “Understanding False Advertising Claims, Part 2: The National Advertising Division” here, or search for it in your favorite podcast player.

The National Advertising Division (NAD) is part of the BBB National Programs. Its mandate is to “hold national advertising across all media types to high standards of truth and accuracy by reviewing truth-in-advertising challenges from business, trade associations, consumers, or on its own initiative.” In 2023, the NAD closed 26% more false advertising cases than the year before.

In the second of two episodes about false advertising claims, Venable partner Claudia Lewis discusses how marketers can reduce the risk of a competitor challenge, and what to do if you believe your competitors’ advertising is violating the law.

Venable’s Ad Law Tool Kit Show will help you identify potentially problematic advertising and marketing practices, or avoid them altogether. The Season 2 episodes examine such topics as Made in USA claims, litigation trends in privacy laws, and marketing to children.

If you have specific questions after listening to this episode, don’t hesitate to contact me or Claudia to arrange a conversation. You can also download the complete Tool Kit or bookmark the link to our e-book for quick access to these industry best practices.

And if you haven’t already, be sure to subscribe to this award-winning blog, and tune in to our comprehensive webinar series, where our team addresses current events and examines themes and issues important to advertising and marketing.

Tune in next week to our final episode of the season when I will be talking to Venable partners Bret Siciliano and A.J. Zottola about “Advertising Agreements.”

Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate the legal risk of campaigns and promotions. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear the authors of this chapter dive deeper into the issue of Understanding False Advertising Claims in this week’s episode.

The first rule of advertising compliance is that advertising must be truthful and not misleading to consumers. In addition, all material advertising claims must be substantiated. When competitors’ ads do not meet those tests, there are numerous venues in which they may be challenged. When challenging competitors’ advertising, it is critical to understand the different ways in which an advertising claim can be false or misleading.

Types of false advertising claims:

Continue Reading Understanding False Advertising Claims: An Excerpt from the Advertising Law Tool Kit

Episode 9 of Venable’s Ad Law Tool Kit Show, Season 2,is now available. Listen to “Understanding False Advertising Claims, Part 1: Litigation” here, or search for it in your favorite podcast player.

The first rule of advertising compliance is that advertising must be truthful and not misleading to consumers. All material advertising claims also must be substantiated. There are many venues in which a business can challenge a competitor who fails to follow those rules. What are the different ways in which an advertising claim can be false or misleading?

In the first of two episodes about false advertising claims, Venable partners Liz Rinehart and Roger Colaizzi discuss the many types of false advertising claims and how to be sure your business can avoid them.

Continue Reading Listen to Venable’s Ad Law Tool Kit Show Podcast – “Understanding False Advertising Claims, Part 1: Litigation”

Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate the legal risk of campaigns and promotions. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear the authors of this chapter dive deeper into the issue of State Privacy Laws in this week’s episode.

State privacy laws continue to evolve rapidly, challenging businesses to keep pace. In 2023, new omnibus privacy laws went into effect in California, Colorado, Connecticut, Utah, and Virginia, while eight additional states enacted similar laws. Of the eight states with newly enacted laws, four have laws that will come into effect in 2024—Florida, Montana, Oregon, and Texas. Therefore, businesses should be prepared to comply with up to nine comprehensive state privacy laws in 2024, with more laws slated to come into force in 2025 and 2026.

Continue Reading State Privacy Laws: An Excerpt from the Advertising Law Tool Kit

Episode 8 of Venable’s Ad Law Tool Kit Show, Season 2, is now available. Listen to “State Privacy Laws” here, or search for it in your favorite podcast player.

State privacy laws continue to evolve rapidly, challenging businesses to keep pace. By the end of 2024, businesses will need to comply with up to nine comprehensive state privacy laws, with more laws slated to come into force in 2025 and 2026. To date, all such laws draw inspiration from both the first comprehensive state privacy law—the California Consumer Privacy Act (CCPA)—and the European Union General Data Protection Regulation (GDPR). But there are differences.

In this episode, Venable partner Kelly Bastide discusses which laws, if any, apply to your business and how to develop a practical compliance program that harmonizes with the different laws.

Continue Reading Listen to Venable’s Ad Law Tool Kit Show Podcast – “State Privacy Laws”

Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate the legal risk of campaigns and promotions. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear the authors of this chapter dive deeper into the issue of Marketing to Children in this week’s episode.

When marketing to children under the age of 13, there are heightened requirements that go beyond standard truth in advertising and fair advertising practices. Both the Federal Trade Commission (FTC) and the Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureaus (BBB) monitor and review advertising that targets children for unfair and deceptive practices. CARU sets forth specific guidelines for ads shown on children’s television, in children’s publications, and on websites with content directed to children. The basic idea behind these standards is that children have a difficult time understanding that they are being given a sales pitch and distinguishing between reality and fantasy. For these reasons, claims need to be narrowly tailored and very clear, in language children can understand, without preying on their potential vulnerability or naivete.

Continue Reading Marketing to Children: An Excerpt from the Advertising Law Tool Kit

Episode 7 of Venable’s Ad Law Tool Kit Show, Season 2,is now available. Listen to “Marketing to Children” here, or search for it in your favorite podcast player.

When marketing to children under 13, there are heightened requirements that go beyond standard truth in advertising practices. The basic idea behind these requirements is that children have a difficult time understanding that they are being given a sales pitch and distinguishing between reality and fantasy.

In this episode, Venable partner Melissa Steinman and associate Shannon Sansom discuss some best practices that companies should keep in mind when building promotions and campaigns targeted at children.

Continue Reading Listen to Venable’s Ad Law Tool Kit Show Podcast – “Marketing to Children”

Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate the legal risk of campaigns and promotions. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear the authors of this chapter dive deeper into the issue of Made in USA claims in this week’s episode.

Many customers like to “buy American” and perhaps are willing to pay more to do so. However, if you want to call out the red, white, and blue attributes of your product, you should know that the FTC, as well as some states such as California, have created very specific guidance and laws on what it means for a good to be of domestic origin. Under FTC guidance, final assembly must take place in the United States, and “all or virtually all” of the good must be attributable to U.S. sources. The FTC also considers a claim of Manufactured in the USA or Crafted in the USA to be the same as a Made in USA claim.

Continue Reading Made in USA Claims: An Excerpt from the Advertising Law Tool Kit

The Federal Trade Commission (FTC) isn’t the only regulator in town when it comes to endorsements and testimonials. The Securities and Exchange Commission (SEC) regulates investment adviser marketing under its “Marketing Rule.” The rule states that an “advertisement may not include any testimonial or endorsement, and an adviser may not provide compensation, directly or indirectly, for a testimonial or endorsement” unless accompanied by clear and prominent disclosures.

According to an SEC cease-and-desist order, Wahed Invest LLC ran afoul of the Marketing Rule when it disseminated advertisements on its public website, social media, and emails containing endorsements from several professional athletes without the required disclosures. In one instance, a soccer player was paid in stock in Wahed’s parent company, worth about $500,000, and MMA athletes were paid around $30,000 monthly for appearing in the advertisements. The endorsements included statements such as:

Continue Reading Foul! SEC Faults Investment Adviser for Inadequate Disclosures on Professional Athlete Endorsements