It’s here! The 11th edition of Venable’s popular Advertising Law Tool Kit is now available for download. This annual resource compiles a broad spectrum of marketing-related topics, background information, and checklists into an easy-to-access guide, authored by some of the most experienced attorneys in the industry. Download this year’s Tool Kit or bookmark the link
FTC’s Case Against Intuit Isn’t Won—Yet
Gather your W-2’s and call your CPAs! Tax season is upon us, and that means one thing for the FTC—another flurry of activity in its ongoing action against Intuit, Inc., one of the largest online tax-filing services. Recently, the FTC issued an order denying complaint counsel’s motion for summary decision in the case, concluding that the matter will proceed to a full evidentiary hearing—the FTC’s administrative version of a trial.
As we previously reported, the FTC initially brought its case against Intuit in March 2022, alleging that the marketing of TurboTax as free was misleading because the free service applies only to those customers filing “simple” tax returns, while the service charges many other customers at the end of the filing process. Two months later, we wrote about the states’ investigation of Intuit, which overlapped with the FTC case, and the resulting $141 million settlement with all 50 states and the District of Columbia. Along with the restitution payment, Intuit was required to cease its “free” advertising campaign as part of the settlement.…
CFPB Warns Digital Mortgage Comparison-Shopping Platforms About Referral Fees and Pay-to-Play Advertising
The Consumer Financial Protection Bureau (CFPB) has moved to curb digital mortgage comparison-shopping platforms from receiving referral fees, issuing an advisory opinion that outlines how companies violate the Real Estate Settlement Procedures Act (RESPA) when “they steer shoppers to lenders by using pay-to-play tactics rather than providing shoppers with comprehensive and objective information.” The advisory is a warning to digital marketing platforms of the potential consequences of business relationships with mortgage lenders. The CFPB has a direct sightline into the marketing activities of mortgage lenders though supervision and routine examinations, and has already put a target on digital marketing providers.
The CFPB’s advisory opinion describes how platform operations can violate Section 8 of RESPA by enhancing the placement of lenders or related service providers on the digital platforms, or by otherwise steering consumers to those lenders or service providers. in addition, the opinion provides illustrative examples.…
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FTC Announces Health Products Compliance Guidance
On December 20th, 2022, the Federal Trade Commission published new guidance regarding claims about the benefits and safety of health-related products: Health Products Compliance Guidance. This guidance replaces the Commission’s previous guidance, Dietary Supplements: An Advertising Guide for Industry, issued in 1998. The new guidance expands the scope to include other health-related products, such as foods, over-the-counter drugs, and devices.…
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Ready, Aim, Fire: FTC Scores Record-Breaking $520 Million Settlement with Fortnite Creator Epic Games
This week the Federal Trade Commission unveiled hefty settlements with Epic Games Inc.—the creator of the video game Fortnite—to resolve separate actions alleging violations of Section 5 of the FTC Act and the Children’s Online Privacy Protection Act (COPPA), respectively.
Epic Games will pay $245 million in consumer redress to settle the alleged Section 5 violations in an FTC administrative proceeding and will pay $275 million in monetary penalties to settle the COPPA action in federal court. The cases highlight two hot spots for the FTC—dark patterns and children’s privacy.
In its administrative complaint, the FTC alleges that Epic Games used dark patterns, making the gameplay interface confusing and tricking players into making in-game purchases, often when they did not intend to. Specifically, the complaint alleges that:…
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FTC Sues Advertising Behemoths Google and iHeartMedia for Deceptive Endorsements by Radio Personalities
Last week, the Federal Trade Commission and state attorneys general in Arizona, California, Georgia, Illinois, Massachusetts, New York, and Texas settled with advertising giants Google and iHeartMedia for deceptive advertising and endorsements under Section 5 of the FTC Act.
The FTC and states allege that Google paid iHeartMedia to record and broadcast ads featuring “radio personalities” endorsing Google’s phone, the Pixel 4. In the ads, the radio personalities lavished praised on the Pixel 4, using first-person language to describe the Pixel 4’s functionalities and calling it their favorite phone.
The ads aired over 11,200 times between October and December 2019. The problem? The Pixel 4 had not been released for sale, and Google was unable to provide the phones to the radio personalities before the ads aired. In essence, the radio personalities were extolling the Pixel 4 without ever having used one.…
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Proposed Rulemaking: FTC Dials in on Business Opportunities
At its most recent open meeting, the Federal Trade Commission voted unanimously to issue an Advance Notice of Proposed Rulemaking, seeking public comment on whether to modify or expand its Business Opportunity Rule.
The Business Opportunity Rule, first adopted in 2012, requires sellers of “business opportunities” to be able to substantiate any earnings claims they make, and to make certain enumerated disclosures pertaining to the potential transaction. These disclosures include:
- The seller’s identifying information
- Whether the seller is making earnings claims and, if so, substantiation for those claims
- Whether the seller, affiliates of the seller, or its leaders have been involved in legal actions concerning misrepresentation, fraud, securities law violations, or unfair or deceptive practices in the previous 10 years
- The terms of the seller’s cancellation or refund policy, if it has one
- A list of people who have purchased the business opportunity in the previous three years
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FTC Issues New Rulemaking Proceedings on Customer Reviews and “Junk Fees”
Last week at its monthly open meeting, the Federal Trade Commission (FTC) unveiled two new rulemaking proceedings: the first deals with deceptive customer reviews and endorsements and the second with so-called junk fees.
Both rulemakings are in their nascent stages. Last week’s actions—the issuance of two advance notices of proposed rulemaking (ANPRs)—simply request information from the public on the consumer harms caused by fake and paid reviews and junk fees. The road from ANPR to final trade rule is a long and winding one, particularly given the number of new rulemakings upon which this FTC has embarked, which Commissioner Christine Wilson has termed “Ruleapalooza.”…
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The FTC’s Latest Forecast: An Opening Meeting with A Flurry of Rulemaking
The FTC’s ears must have been burning. Yesterday, just hours after we finished a webinar discussing the latest developments in the FTC’s push for more rulemaking, the FTC announced an upcoming open meeting where it will propose issuing three advanced notices of proposed rulemaking (ANPR).
First, the FTC will consider whether to initiate rulemaking to…
A Sign of the Times: Federal Trade Commission Releases Guidance on Consumer Reviews
Customer reviews and ratings are powerful, low-cost marketing tools. Technology now allows marketers to harness this power on a scale that was unimaginable even five years ago. The ability to solicit, capture, and post reviews and ratings is virtually seamless. But it is just as easy to seek shortcuts or abuse the system. In response, the Federal Trade Commission (FTC) has devoted resources to addressing consumer review fraud, including through public education. Early in the year, it issued nonbinding guidance for both marketers and online review platforms, warning against potentially deceptive acts, such as faking, manipulating, or suppressing online reviews, as well as paying for higher rankings from purportedly “independent” consumer ranking websites. Online reviews should reflect customers’ honest opinions. So how does the FTC suggest you get there?…
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