Crowdfunding plays an important role in democratizing access to capital for small entrepreneurs, but as we’ve written before, entrepreneurs of every ilk need to remember that their representations to consumers need to be truthful, accurate and not misleading. Last month, the FTC filed a complaint against Douglas Monahan and his company iBackPack of Texas, LLC, alleging that Monahan and his company had violated Section 5 of the FTC Act by scamming consumers on crowdfunding sites Indiegogo and Kickstarter with four crowdfunding campaigns that together raised over $800,000, including a campaign to develop a bulletproof backpack that could recharge personal electronic devices and act as a mobile hot spot.
Continue Reading FTC Reminds Crowdfunders: Deliver on Your Promises or Refund
In light of a new California decision interpreting California’s wage and hour law, brand companies should take a careful look at their influencer compliance programs not only for FTC compliance, but also potential employment law consequences. How a company establishes and maintains influencer compliance can potentially convert the influencer from an independent contractor to an employee.
There are certain words and phrases that set the antennae of promotions lawyers – and law enforcers – buzzing. “Everybody wins” comes to mind right away – but there is one little word that can pay out tremendous legal problems and should concern anyone involved in executing sweepstakes and promotions. That word is “raffle.”
A notable Venable alum stopped by the NAD conference last Tuesday morning to give the room an insider’s view into the Office of Attorney General in the District of Columbia. After a moving moment of silence for the victims of hurricanes, the recent mass shooting in Las Vegas, and his mother who had recently had a stroke, Attorney General Racine gave the room an overview of the goings-on and priorities of his office as well as his thoughts on the priorities of AG offices around the country.
It is no secret that influencer marketing—in which social media influencers have the ability to engage with their followers and create “organic” content about a particular product or service—is a huge asset for companies. It is also no secret that advertisers, agencies and influencers alike are often confused about how to comply with the FTC’s 
And the big “winner” is (drumroll) … the Italian Competition Authority. A multinational electronics company was a most recent victim of the stringent Italian prize promotion regulations — to the tune of € 3.1 million (or roughly US$3.37 million). The costly sanctions were imposed on the company by Italian authorities for, among other issues, unfair commercial practices. The authorities challenged the execution of some of the company’s promotions, claiming that the advertising for the promotions did not include clear and sufficiently visible explanations of how to win the prize, in violation of Italian customary commercial practices, and that the sponsor’s requirement that the winner must register and provide personal information in order to win the prize was in violation of Italian law as well. And the issues highlighted above are just some of the parameters a marketer needs to consider when running a successful sweepstakes in Italy, from a notary requirement to the need for a VAT (“value-added tax”) representative for non-Italian sponsors to the need for compliance with Italian privacy laws. The combination of these issues provided the perfect backdrop for an enforcer to make an example out of the multinational company’s marketing efforts, and gives us the perfect opportunity to remind companies to be diligent when running international promotions while we alert our base to these complex foreign issues.