September 2018

To kick off this year’s National Advertising Division Annual Conference, Andrew Smith—the FTC’s new Director of the Consumer Protection Bureau—discussed his views on the Commission’s priorities with respect to remedies, privacy and data security, and national advertising cases. Given the backgrounds of the new Commissioners, Director Smith acknowledged that some of them may be…

Readers of this blog often learn how the government regulates modern instruments for customer engagement – social media, texting campaigns, e-commerce sites, the use of influencers, and more. Old habits die hard, however, and many marketers continue to use the U.S. Postal Service to connect with consumers. When those mailers want to reach a large audience, Marketing Mail (formerly known as Standard Mail) may be the answer. Mailers use USPS Marketing Mail to deliver catalogues, circulars, flyers, advertising, and both printed and non-printed merchandise designed to enhance the tactile experience of opening the mail and create a positive association with the sender.
Continue Reading USPS Proposal May Cause Direct Mail Advertisers To ‘Go Postal’

The ink was barely dry on our Monday blog when a new skirmish broke out (both on Twitter and in official records) in the FTC’s long-brewing remedy wars. This time the battle took place in another unlikely location – three Made in USA settlements.

First to set the scene. The FTC generals announced that they had accepted surrenders from three combatants who were attempting to sell products allegedly mislabeled as Made in USA. In one instance there were hockey pucks, “Patriot Pucks” that were patriotic if you happened to be a citizen of China and that were marketed as “The Only American-Made Hockey Puck.” In another instance, mattresses that were wholly imported from China were labeled as “designed and assembled in the USA.” And finally, backpacks and wallets were sold on websites that claimed to feature “American-Made Products” and the wallets were specifically promoted as “American Made.”Continue Reading FTC Remedy Wars – Part Deux

Venable clients that engage in selling goods and/or services over the internet should evaluate whether the recent Supreme Court decision in South Dakota v. Wayfair will now require them to begin collecting sales and use taxes in states where they have not previously done so. In the Wayfair Case the Court held that a state can require a remote vendor to collect its sales/use tax based merely on “economic nexus” with the state. The prior law standard requiring a remote vendor to have physical presence in a state has been overturned. Under the South Dakota law at issue in Wayfair, an internet retailer is required to collect South Dakota sales tax if it has more than $100,000 of sales into the state or more than 200 sales transactions in the state over the course of a year.

Our chart below lists the states that currently have authorized an economic nexus standard similar to that approved in Wayfair and lists the threshold requirements for each state. This list can be expected to grow as states without economic nexus laws for sales tax purposes rush to alter their existing standards to take advantage of Wayfair’s liberalization of the sales tax nexus rules.Continue Reading Internet Vendors Need to Pay Attention to these States After U.S. Supreme Court Alters Sales Tax Collection Standard

No one in law school ever mentioned that social media was required professional reading. (Well, let’s be honest. There wasn’t social media when we were in law school). However, perhaps inspired by our President, Twitter has become quite interesting lately when it comes to the FTC. One of the more interesting tweet storms started as a result of the FTC’s recent action modifying a consent agreement reached with Speedway. The Speedway modification is itself a fascinating tale. In brief, fifteen years ago, Speedway agreed to refund $1 million to consumers as a result of allegedly deceptive statements about a fuel additive. Speedway was supposed to redistribute funds from checks that ultimately went uncashed but failed to distribute about $80,000 of the million that went uncashed. Fifteen years later, Speedway self-reported the violation and proposed sending the money to the U.S. Treasury in lieu of sending an additional $1 or so to each of the initial recipients. This practice, as the majority notes, also conforms to more recent Commission practice which allows for the remittance of uncashed funds to the Treasury. Four Commissioners approved this modification, noting, among other things, the cost of forcing Speedway to comply with the order as written and that had Speedway not self-reported the violation, it would have never been detected. Commissioner Chopra dissented, noting that allowing Speedway to now simply send a check to the U.S. Treasury saved it the expense of finding and sending checks to individual consumers and that Speedway should not profit from its order non‑compliance. As a side note, Commissioner Chopra also called for clearer guidance when it comes to any benefits associated with self-reporting a suggestion which the majority called “worth consideration.” (Currently, as a matter of enforcement discretion, the Commission will sometimes close investigations when a company corrects a violation prior to the initiation of a Commission investigation, which is, in a manner of speaking, a variation of self-reporting).
Continue Reading FTC on Steroids?