FTC Deputy Director Daniel Kaufman launched into his keynote address at this year’s BAA marketing law conference by comparing the modern digital marketplace to the most talked about TV series as of late: The Walking Dead. He pointed out that the show has spawned active social media engagement and user generated content (#GlennIsAlive…or is he?), produced several apps, and at times blurred the line between content and advertisement by featuring sponsored products in its episodes. As exciting as this digital revolution may be, however, Mr. Kaufman made clear that the fundamental principles of consumer protection still apply to today’s marketplace: tell the truth; prominently disclose any facts necessary to make sure your claims aren’t misleading; carefully consider whether your business decisions may result in any consumer harm; and don’t help others deceive or harm consumers. These principles are timeless, stated Mr. Kaufman, and the FTC expects companies to abide by them across all of their business models, both old and new.
To keep pace with the digital revolution, Mr. Kaufman noted that the FTC has spent significant resources developing tools and bringing enforcement actions that address important concerns about emerging technologies, such as:
- Mobile Platforms. The FTC has brought a series of mobile payments cases against companies that allegedly charged consumers for purchases that they did not authorize. The FTC has also taken action against health-oriented app developers for claiming that their app could detect diseases or improve eyesight, as well as a gaming app developer that loaded users’ cellphones with malware in order to mine virtual currencies.
- Gag Clauses. The FTC recently filed a case against a company that not only allegedly deceptively marketed dietary supplements, but invoked “gag clauses” in their sales contracts in order to sue consumers who posted negative comments about their products online. A preliminary injunction was recently entered against the company, prohibiting their use of such gag clauses.
- Deceptive Claims. The FTC took action last year against wireless providers for allegedly advertising unlimited data in their broadband plans, when in fact they slowed down or throttled service when consumers reached a certain limit. Kaufman noted that in the FTC’s view, it’s pretty straightforward – “unlimited means unlimited.”
- Robocalls. Mr. Kaufman stated that technological changes in recent years have led to an explosion of robocalls, most of which are illegal unless you have obtained prior written consent from consumers to make such calls. The FTC has hosted several contests to encourage technologists to design tools to both block robocalls and help investigators track down those who are making them. The winner of its latest challenge was an app called RoboKiller.
- Privacy. Mr. Kaufman emphasized that even as more and more data is being collected using rapidly changing technology, companies still need to follow the basic principles of privacy law, including: not collecting or retaining more data than it reasonably needs; protecting data from unauthorized access; giving consumers accurate information and meaningful choices about privacy; and periodically reviewing its privacy statements to make sure that the company is delivering what its promising. Mr. Kaufman also noted that more policy work is in the pipeline. Next week the FTC is hosting a workshop on cross-device tracking to examine the various ways that companies are now tracking consumers across multiple devices, and in January it’s holding a conference called PrivacyCon to examine cutting edge research and trends in protecting consumer privacy and security.
- Fraud. Noting that stopping fraud is the FTC’s largest consumer protection program, Mr. Kaufman stated that the Commission has targeted many different forms of fraud over the last two years (e.g., scam charities, phony business opportunities, investment schemes, etc.), and have conducted outreach and education initiatives to protect communities that have been specifically targeted by fraudsters.
Mr. Kaufman closed by emphasizing that while the digital revolution has provided many benefits to consumers and businesses alike, the FTC will continue to take action whenever necessary to promote compliance and deter harmful trends – including a zombie apocalypse. Now if only The Walking Dead would finally reveal whether Glenn is still alive, all would be right with the world.