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Melissa Landau Steinman

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Melissa Steinman focuses on advertising and marketing, promotions, consumer protection, antitrust, trade regulation, and consumer product safety. In addition to counseling and compliance, she also actively represents clients in government investigations and defends clients against class actions. Melissa represents a broad array of clients, including consumer products and hospitality brands, media and tech companies, retailers, gaming and software companies, start-ups, celebrities, producers, charities, and trade associations. She is particularly well known for her deep knowledge of promotions law, including sweepstakes, contests, gift cards, loyalty programs, and charitable promotions, and she speaks and writes frequently on the topic in the United States and internationally.

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The National Advertising Division (“NAD”) held its Annual Conference in New York yesterday. Andrew Smith, the head of the Bureau of Consumer Protection for the FTC, delivered the keynote address and provided attendees with an excellent overview of the past year’s landmark decisions in FTC jurisprudence. For those who frequent this blog, it comes as no surprise that the hottest discussions focused on the recent trend among courts to question the FTC’s broad interpretation of its enforcement authority under Section 13(b), concentrating on rulings in the Shire ViroPharma decision from the Third Circuit, the LabMD decision from the Eleventh Circuit, and the recent Seventh Circuit decision in Credit Bureau Center.

In Shire ViroPharma, the Third Circuit ruled that, pursuant to the plain language of Section 13(b), to obtain an injunction under Section 13(b), the FTC must plead facts sufficient to show that a defendant “is” violating or “is about to” violate the law. Essentially, the Shire decision means that the FTC cannot use Section 13(b) to address wholly concluded past harm—a profound finding that could dramatically affect how the FTC pursues cases. For more analysis, see our past blogs on both the district court‘s and Third Circuit’s opinions. The FTC chose not to seek Supreme Court review of the Shire ViroPharma decision and instead appears to be trying to limit that case to its facts.Continue Reading Mr. Smith Goes to New York: Takeaways from the Keynote Address of the FTC’s Director of the Bureau of Consumer Protection at the NAD Annual Conference

The National Advertising Division Annual Conference kicked off with Andrew Smith, the Director of the FTC’s Bureau of Consumer Protection, as the keynote speaker. Near the close of his remarks, Director Smith announced that the FTC will hold a workshop on the Children’s Online Privacy Protection Act (“COPPA”). For a refresher, COPPA is designed to protect the privacy of children by establishing certain requirements for websites that market to children. The FTC operates under the assumption that if children are the target demographic for a website, the website must assume that the person accessing the website is a child, and proper consent must be obtained. This assumption exists even if the website did not start with children as the target audience.

To illustrate this point, Director Smith discussed TikTok, a social media app that allows users to create and share short-form videos, which purchased Musical.ly, an app that allowed its users to post videos of themselves lip synching to songs. Musical.ly originally marketed to adults. However, as the website grew in popularity, it became clear that children used the website and that Musical.ly knew that children used the website. On February 27, 2019, the FTC brought a Complaint against Musical.ly alleging that Musical.ly collected information about children, but did not obtain the required parental consent to collect that information. In fact, child predators began using the website to obtain the location of children, though luckily, no child was hurt. As a result, TikTok agreed to pay $5.7 million to settle the FTC allegations.Continue Reading A Morning Cup of COPPA From the NAD Annual Conference

On August 7, 2019, the Federal Trade Commission (FTC) held a workshop examining consumer protection issues related to “loot boxes” in video games in Washington, DC. Loot boxes are digital containers of virtual goods that a user can purchase in-game using real-world currency or earn based on meeting certain in-game milestones. A user does not know what is in the loot box before purchasing. It may contain digital goods (such as character skins, tools, weapons, etc.) that the user can use in the game. Importantly, the user cannot choose the contents of the loot box. The box could contain an extremely rare/sought-after item, or the contents could be a collection of items already owned by the user (or somewhere in between).

Loot boxes are a form of micro-transaction that video game manufactures rely upon to offset the cost of game development, which, as explained in the workshop, has risen from tens of thousands of dollars to, in some cases, hundreds of millions of dollars. However, the FTC and other consumer groups are concerned that these transactions may come as a surprise to consumers (especially parents of small children) if they are not properly and clearly disclosed.Continue Reading FTC Gathers Video Game Industry to Talk Loot Boxes

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.

iBackPack adContinue Reading FTC Reminds Crowdfunders: Deliver on Your Promises or Refund

In February 2018, the FTC teamed up with the Missouri Attorney General’s office in filing a complaint against a prize promotions company and others that allegedly operated a large-scale deceptive prize scam targeting the elderly. A little more than a year later, the FTC and the Missouri AG’s office announced that they reached a settlement…

Amazon has just announced Project Zero to potentially assist brand owners in combatting counterfeit goods by removing products likely to be fake from the online retailer’s platform. Project Zero would allow brand owners to designate product listings for removal, instead of undergoing Amazon’s prior reporting and removal process, which required brand owners to report counterfeit…

The Commissioners of the FTC agreed, during an oversight hearing on November 27, 2018, to investigate the use of “loot boxes” in video games. Senator Hassan (D-NH), following up on questions she asked the newly appointed Commissioners during their confirmation hearings, specifically requested the FTC investigate loot boxes citing addiction concerns, (especially as it relates to children) and the resemblance of loot boxes in video games to gambling.

A loot box is a digital container of virtual goods that a user can purchase in-game using real-world currency. A user does not know what is in the loot box before purchasing. The loot box may contain digital goods (such as character skins, tools, weapons, etc.) that the user can use in the game. Importantly, the user cannot choose the contents of the loot box. The box could contain an extremely rare/sought-after item or the contents could be a collection of items already owned by the user (or somewhere in between).Continue Reading The FTC is Searching for the Value in Loot

Social Media AppsIn 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.

We know the FTC’s view is that it takes a village to ensure influencers disclose any material connection to a brand company with which they have a relationship and that the Commission will hold brands, agencies, influencer networks, and influencers all responsible for compliance lapses. The basic expectation is that brands will train their influencers on the rules of the road, monitor for compliance, and enforce consequences for noncompliance. The consent orders in cases like CSGOLotto, Inc. lay out more detail as to what the FTC expects, including:

  1. Providing each influencer with a clear statement of responsibilities for including clear and conspicuous material connection disclosures and obtaining signed statements from each influencer acknowledging receipt and consent;
  2. Establishing, implementing, and maintaining a system to monitor and review influencer posts; and
  3. Immediately terminating and ceasing payment to any noncompliant endorser.

Continue Reading Walking the Line with Influencers: How to Satisfy the FTC without Your Influencers Becoming Employees in California

Enter to Win!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.”

While many people use “raffle” interchangeably with “sweepstakes” or “drawing” to designate a legal game of chance that any entity can run, most raffles are illegal under federal and state gambling laws. Narrow exceptions exist for certain activities involving nonprofit organizations, such as charities, but those carve-outs and their accompanying requirements vary from state to state.

The chief problem with raffles is that they, by their nature, contain all three elements of an illegal lottery: (1) the award of a prize; (2) that is determined by chance; and (3) participants must submit consideration to enter.Continue Reading These Six Letters Can Spell “Trouble” for Sweeps and Promotions

We are pleased to announce that Venable has been accepted as a member of GALA (Global Advertising Lawyers Alliance). GALA is an alliance of lawyers located throughout the world with particular expertise and experience in advertising, marketing and promotion law. (Click here to go to the GALA website.) Being a GALA member will help us…