Times of national crisis tend to trigger an uptick in charitable solicitations and charitable giving. And for-profit businesses, including recognizable retail brands, want to do all they can to help as well. As the COVID-19 crisis unfolds, with its far-ranging economic and societal repercussions, many brands are engaging in coronavirus-related commercial co-venture (CCV) activities and cause marketing promotions, advertising to consumers that purchase or use of their product or service will benefit a charity or a charitable purpose.

Although the COVID-19 pandemic has resulted in a delayed federal income tax filing deadline, mortgage relief programs, and other types of suspended governmental requirements, the regulations applicable to charitable sales promotions and the commercial coventurers who carry them on remain fully in place. In some ways, compliance with these rules—particularly disclosure requirements—is more important than ever given the increased desire to act now and do good. There is no “pandemic exception” for compliance with states’ CCV laws, or state and federal truth‑in-advertising laws. Indeed, while states may accommodate reasonable filing or registration delays caused by COVID-related business interruptions and the FTC similarly has acknowledged the strain on all businesses right now, these regulators will also crack down on marketing abuses that take advantage of consumers’ generosity or fear during the pandemic. For brands wanting to capitalize on the moment, keep in mind the following basics when it comes to conducting a compliant campaign:


Continue Reading Charitable Sales Promotion Rules and Best Practices: Be Sure to Cross Your T’s and Dot Your I’s During the Pandemic

We’ve all seen the COVID-19 fall-out in the past few weeks—indeed, we’ve all lived the fall-out.  But the promotions, events, and hospitality industry has been particularly hard-hit by the recent restrictions on public gatherings and travel. From Coachella to SXSW to the Olympics, events around the globe have been cancelled, rescheduled, or postponed —sometimes indefinitely—due to the pandemic.  These postponements and cancellations have put companies sponsoring promotions such as sweepstakes and contests, events, and ad campaigns linked to these postponed events in a difficult position.  How do companies protect themselves from potential liability associated with the postponement or cancellation of a sponsored event?  Can one change the terms and conditions of sweepstakes associated with an event to when the event is postponed or cancelled?  Those of us familiar with contract law understand how important a well-drafted Force Majeure clause can be in this situation.  But one doesn’t always have a well-drafted Force Majeure clause when dealing with a new pandemic.  And, as is often the case, sweepstakes and prize promotions rules (and related documents) are a form of contract, but they are a type of agreement that is regulated a bit differently from a standard commercial contract between sophisticated business entities that have negotiated in good faith.  Let’s unpack that.

Continue Reading Coronavirus Cancellations: How Do They Affect My Promotion?

Last week, the FTC entered into a settlement with Teami, LLC, a marketer of teas and tea-based skincare products that the FTC alleges promoted its products with deceptive, unsubstantiated health claims and endorsements by social media influencers who did not adequately disclose their material connections to (i.e., monetary payments from) the company. The action highlights the FTC’s continued focus on both health claims and influencer marketing.

According to the FTC’s two-count complaint, Teami and its individual owners claimed, without reliable scientific evidence, that their products would treat cancer, clear arteries, significantly decrease migraines, treat colds, prevent flus, cause “rapid and substantial” weight loss and burn body fat.

The defendants also allegedly misrepresented that social media posts by influencers reflected the views of ordinary users of Teami products, failing to adequately disclose that the influencers were paid for their endorsements. According to the FTC, such disclosures must be clear and conspicuous—and, in this context, because consumers’ Instagram feeds typically display only the first few lines of a longer post followed by an option to read more, that means that endorsers must disclose any material connections above the “more” link.


Continue Reading Stirring the Pot: Tea Marketer Settles with FTC Over Unsubstantiated Health Claims, Inadequate Influencer Disclosures

Influencers, if you ever wished you had a handy brochure on how to make proper disclosures in your sponsored posts, you are in luck. On Tuesday, the FTC issued a new guide titled “Disclosures 101 for Social Media Influencers,” along with three videos, that lays out the agency’s guidelines for when and

Since updating its Endorsement Guides in 2015 to keep pace with the meteoric rise of social media and influencers in marketing, the FTC has placed a significant emphasis on the need to disclose material connections between advertisers and endorsers. Through its Guides, informal business guidance, blog posts, warning letters, and multiple enforcement

In the iconic words of DJ Khaled: “Another one.” That’s right, folks. Another round of celebrities have fallen on the wrong side of the federal government’s enforcement of its advertising disclosure rules. Recently, the SEC announced that it settled charges against Floyd Mayweather (professional boxer) and DJ Khaled (entertainer and music producer) for failing to tell their social media followers that they received money for promoting investments in Initial Coin Offerings (“ICOs”). This case is especially noteworthy, considering that this is the first time the SEC brought an action against a paid celebrity endorser involving ICOs.

In Mayweather’s case, he received a $300,000 payment for ICO tweets like this one: “starts in a few hours. Get yours before they sell out, I got mine…”

Likewise, DJ Khaled received a $50,000 payment for this tweet: “I just received my titanium centra debit card. The Centra Card & Centra Wallet app is the ultimate winner in Cryptocurrency debit cards powered by CTR tokens! Use your bitcoins, ethereum, and more cryptocurrencies in real time across the globe. This is a Game changer here. Get your CTR tokens now!”


Continue Reading All I Do is Win, Win, Win?: SEC Settles Charges with Floyd Mayweather and DJ Khaled

The FTC has been waging a steady war against advertisers that use introductory offers that turn into subscription agreements. With the FTC threatening to seek full consumer redress and to impose joint and several liability, most companies and their principals cannot afford to litigate such cases and are forced to settle. In March 2015, the FTC sued DIRECTV, alleging that DIRECTV failed to properly disclose material terms of its introductory offer and its subscription agreements. DIRECTV chose to fight. Last August the case went to a bench trial. After the close of the FTC’s case, the judge suspended the trial so that DIRECTV could move for a judgment in its favor. Last week, the judge granted DIRECTV’s motion in part, tossing out large parts of the FTC’s case. The opinion provides insightful guidance on how to structure continuity offers and illustrates the difference between alleging something is deceptive and proving it.

In its complaint, the FTC alleged that DIRECTV failed adequately to disclose that: (1) introductory prices were limited to the first 12 months of 24-month subscriptions; (2) the subscriber is subject to a 24-month commitment; (3) early termination fees would apply if subscriptions were cancelled early; and (4) premium channels were free for three months and then would be automatically charged at the regular rate unless the subscriber called to cancel. The FTC alleged these deceptive statements were made in print, TV, and banner advertisements as well as the directv.com website. Based on these allegations, the FTC sought restitution of $3.95 billion based on DIRECTV’S alleged unjust gains from the deception.


Continue Reading A Victory for Introductory Offer and Subscription Advertisers: FTC Fails to Prove Deception Against DIRECTV

The Federal Election Commission recently held a public hearing to discuss its March 2018 proposed rule aimed at providing voters with more information about who pays for or sponsors online political advertisements. The private sector has adopted a solution to the issue.

On May 22, 2018, the Digital Advertising Alliance (DAA) took the first step to alter the status quo by unveiling a new, industry-wide PoliticalAds transparency initiative designed to bring greater transparency and accountability to the realm of political advertising.

Similar to the DAA’s YourAdChoice program, which provides consumers with easily accessible information via the familiar blue triangle that accompanies interest-based ads, the PoliticalAds initiative will require certain political advertisements to supply information and a comparable purple icon.

Political Ad Icon


Continue Reading Transparency Coming to a Campaign Ad Near You!

Our Canadian partner in the Global Advertising Lawyers Alliance (GALA) wrote this post about influencer disclosure practices in Canada that we wanted to share with you.

On March 28, 2018, Ad Standards introduced new Disclosure Guidelines (the “Guidelines”). Developed with the cooperation of influencers and advertisers, the Guidelines are intended to provide suggested best practices for when, and how, to disclose any material connection between an advertiser or brand and the influencer.

The Guidelines inform an Interpretation Guideline under the Canadian Code of Advertising Standards (the “Code”), issued in October 2016, requiring that any “material connection” between an influencer and a brand be “clearly and prominently disclosed in close proximity to the representation about the product or service.” The Interpretation Guideline says what to do, but suggested looking to other sources including the FTC’s Guide to Testimonials & Endorsements for how to do it. The new Guidelines provide a Canadian resource, with illustrative examples of “dos” and “don’ts” to assist industry in complying with the Code.


Continue Reading Guest Blog: Ad Standards Introduces New Influencer Disclosure Guidelines

football and foam fingersThis may have been the first year we were more into the game than the ads as it was a well-matched nail biter right to the end, but this is advertising’s biggest night of the year as well as football’s and we were once again not disappointed. While views is likely the best measure of an ad’s success, here is the annual “All about Advertising Law Round Up”.

Our favorite campaign was the Australian Tourism ad featuring Chris Hemsworth and Danny McBride. The campaign encouraged tourism under the rubric of filming of a Crocodile Dundee sequel. The movie has its own IMDb page and related Twitter hype. But there is no movie. It is all part of the tourism ad campaign. This is fake news without the political baggage, creating buzz and interest for the product offering. Well played!


Continue Reading Big Game Fun Includes Viking Disclaimers and Fake News