Regulatory and Litigation Developments for Advertisers and Marketers
As part of the 2019 year-end congressional appropriations wrap-up free-for-all, Congress adopted a new Section 642 of the Communications Act that significantly changes how a cable operator advertises and bills video subscribers. The law applies to both stand-alone video programming packages and the video portion of bundled plans that combine video programming with broadband Internet service.
Under the law, cable operators must change their billing practices as follows by June 20, 2020.…
Last week, President Trump signed two executive orders designed to limit the ability of federal agencies to make and enforce policy through the use of guidance documents. While this may seem like a mere technical issue, the ramifications could be significant.
A federal agency may issue a guidance document for a variety of reasons. Some agencies, such as the U.S. Food and Drug Administration (“FDA”), use it as the primary instrument for announcing and explaining significant policies. Many FDA guidance documents clarify agency positions regarding complex and ambiguous laws and regulations governing the broad range of companies it regulates. This includes manufacturers and marketers of food, dietary supplements, cosmetics, drugs and medical devices.
Some question whether agencies (including FDA) have gone too far. Agencies are supposed to promulgate a regulation when creating a new rule. In contrast, an agency may convey an interpretation of a currently existing rule through the issuance of a guidance document or other, less formal means. While it is often challenging to distinguish a new rule from an interpretation, the distinction has serious implications. The cost, time and effort required to publish a guidance document are far lower. Notably, a regulation may only be finalized after the agency has received and addressed all public comments. No such requirement exists for guidance documents.…
In two recent decisions, federal district courts have dismissed at least some of the claims brought by federal and state authorities, finding the complaints insufficiently specific in alleging that a defendant’s conduct met the relevant statutory requirements and/or insufficiently clear regarding their allegations as a whole. These rulings may provide a useful roadmap for future challenges to complaints brought by federal and state regulatory agencies and/or attorneys general.
We’ve blogged previously about the FTC and State of New York’s challenge to the advertising for cognitive supplement Prevagen. If your memory is good, you will recall that Judge Stanton dismissed the case, but the Second Circuit reversed on the issue of whether the studies Prevagen mentions in its ads support the claims in its ads. In addition to the product manufacturer and marketer, Quincy Bioscience, LLC, Prevagen, Inc., and Quincy Bioscience Manufacturing, LLC, the government also named as defendants Quincy’s co-founders and two largest shareholders, Mark Underwood and Michael Beaman.…
On May 17, 2019, the U.S. Supreme Court announced it would not hear an appeal in Supply Pro Sorbents, LLC v. RingCentral, Inc., apparently satisfied with a Ninth Circuit ruling that the inclusion of a one-line company identifier on a fax cover page was not in violation of the TCPA’s bar on unsolicited advertisements.…
Winding down the 67th Antitrust Law Spring Meeting last week, Andrew Smith, the Director of the FTC’s Bureau of Consumer Protection (the “Bureau”), provided an overview of the FTC’s consumer protection priorities. Director Smith reiterated that Chairman Simons’ focus on law enforcement applies across the Bureau’s five major areas: marketing, finance, advertising, privacy, and…
In June 2017, the FTC initiated a regulatory rule review of the Controlling the Assault of Non-Solicited Pornography and Marketing Rule (“CAN-SPAM Rule” or “Rule”), seeking information about the Rule’s costs and benefits as well as its economic and regulatory impact. The FTC received 92 responses to its request for public comment. Last week, the…
The regulatory framework for online gambling recently took a wild turn when the Department of Justice Office of Legal Counsel (“OLC”) announced its view that the Wire Act (18 U.S.C. § 1084) applies to all forms of gambling—not merely sports betting. This marked a 180-degree reversal from the stance the OLC took just seven years earlier. The OLC’s 2011 opinion—which itself departed from public positions the DOJ had previously taken—was the foundation upon which today’s state-regulated online gambling industry is built. Four states—Delaware, Nevada, New Jersey and Pennsylvania—currently allow online gambling, and Michigan came close to legalizing it at the end of last year, although outgoing Governor Snyder vetoed the bipartisan bill in a surprise move. The OLC’s follow-on announcement gives now-unlawful online gambling businesses 90 days to bring their operations into compliance with federal law before Wire Act enforcement will begin under this newly expanded view. Below, we contemplate what enforcement of the industry will look like in light of this recent announcement.
Perhaps we will see a Cole memo-esque enforcement regime, where the feds will exercise discretion not to prosecute well-behaved online gambling businesses operated in accordance with robust state regulatory frameworks. After all, legal online gambling businesses and their service providers are already subject to extensive vetting, and in Delaware, online gambling is state-run. Regardless, we expect the DOJ to publish internal guidelines for how the feds should prosecute cases—this is a model that has been used in other areas, and would presumably outline the specific factors under which proposed enforcement would be reviewed and approved.…
Every brand that has designed a product label has felt the call of the asterisk. Visual real estate on packaging and in advertisements is limited, and marketing departments often groan at the piles of clumsy language that legal departments insist make it onto the page. But the elegant solution—dropping an asterisk and including the disclaimers, clarifications, or required disclosures in tiny print at the bottom—has traditionally drawn the ire of regulators or private plaintiffs who complain that such disclosures are ineffective because nobody actually reads them. Now, a line of California federal court cases has begun taking the plaintiffs’ argument at their word, and not in a way that class plaintiffs like: by using Federal Rule of Civil Procedure 9(b) to dismiss complaints that don’t specifically allege whether or not a consumer followed an asterisk and weighed the information in the disclaimer.
In Anthony v. Pharmavite, No. 18-CV-02636-EMC, 2019 WL 109446 (N.D. Cal. Jan. 4, 2019), the court examined a purported class action by consumers allegedly misled into buying biotin supplements labeled with the claim, “May help support healthy hair, skin and nails.” According to the plaintiffs, the average human already obtains a surfeit of biotin in his or her daily life and any amount beyond what can be synthesized is automatically flushed from the body. Indeed, according to the plaintiffs’ studies, “99.9962 percent of people have no possibility of benefiting” from biotin supplements. Only those with exceedingly rare genetic disorders, the plaintiffs explained, could possibly derive any material benefit from supplemental biotin.…
“Slamming and cramming” might sound more appropriate in professional wrestling than telecommunications, but it’s the Federal Communications Commission and not the WWE that’s making moves in this area. On June 7, the Commission approved new rules aimed at stopping both slamming and cramming by telecommunications carriers, which we’ve summarized below. On August 16, these new…
Self-driving cars have captured the imagination through television and movies (Knight Rider and Herbie the Love Bug, to name a few). Today, with advances in computing and other technologies, a number of technology and automotive companies are testing autonomous vehicles on public roads and expect to deploy such vehicles in the near future. Indeed, the potential of autonomous vehicles is promising— in terms of both mobility and safety. According to the National Highway Traffic Safety Administration (“NHTSA”)—the leading federal agency responsible for automotive safety—fully autonomous vehicles (“FAVs”) have the potential to drastically improve transportation safety and decrease crashes. Currently, there are over 37,000 fatalities on the roadways, and crash data shows that 94 percent of crashes have an element of driver error. Autonomous vehicles will not only impact transportation, but will also provide advertisers a new medium to advertise their products and brands, posing exciting questions about how the technology works and what role regulators will play.
Continue Reading Exciting Questions and Opportunities for Advertising Through Self-Driving Cars
