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The Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) agreed this week to cooperate and coordinate consumer protection efforts in enforcing the FCC’s reinstated “net neutrality” rules. The agencies stated in a Memorandum of Understanding that they will share legal, technical, and investigative expertise and experience in enforcing the rules.

The reinstated rules, adopted on April 25, formally reclassify internet service providers’ broadband services as “Telecommunications Services” under Title II of the Communications Act, rather than as a less-regulated Title I “Information service.” With this change in status, the FCC also reinstates specific proscriptive rules against blocking, throttling, or engaging in paid preference for certain network traffic, and re-adopts a “general conduct” standard barring unreasonable interference with consumers or providers that provide content and services.Continue Reading FCC and FTC to Cooperate in Enforcing Reinstated Net Neutrality Rules

It’s not often we see defendants win a resounding victory against the Federal Trade Commission (FTC) and/or state attorneys general, especially after trial. But a recent opinion out of the Eastern District of Pennsylvania provides us with just that. On March 29, 2024 the court issued a 55-page opinion following a 15-day bench trial on the FTC and Pennsylvania attorney general’s claims against American Future Systems, Inc. and its two co-defendants, finding in favor of the defendants on all six counts.

The FTC and Pennsylvania AG challenged telemarketing for print publications, claiming defendants deliberately misled consumers when defendants:Continue Reading Telemarketing Trial: Defendant Sweeps All Six Claims Against the FTC and Pennsylvania AG

In February 2024, a New York federal jury returned a split verdict in the New York attorney general’s lengthy battle against Quincy Bioscience, finding that certain of Quincy’s efficacy and establishment claims for a dietary supplement called Prevagen were materially misleading. Quincy advertises that Prevagen improves memory through an active ingredient derived from jellyfish.

The Federal Trade Commission (FTC) and the New York AG jointly brought the case against Quincy in 2017, alleging its marketing of Prevagen was unfair, deceptive, or false advertising in violation of Sections 5 and 12 of the Federal Trade Commission Act, and New York General Business Law Sections 349 and 350, and for repeated fraudulent acts under New York Executive Law section 63(12). The New York AG sought injunctive relief and restitution from Quincy, and the FTC sought injunctive relief. The FTC’s claim is still pending and was not a part of the New York jury trial. The FTC/AG tag team has become common after the AMG decision, and the FTC recently discussed this in its report to Congress on cooperation with AGs.Continue Reading Unraveling a Tangled Net of Claims: Jury Split on a Jellyfish-Derived Supplement Product

Historically, the Federal Trade Commission (FTC) has touted self-regulation as integral to consumer protection. This has included encouraging industries to work with the Better Business Bureau (BBB) in developing a self-regulatory body that can promote industry-wide policies and heightened compliance. However, late last month, the FTC criticized guidance promulgated by a self-regulatory body calling into question how much the current FTC values industry self-regulation.  

In 2023, the BBB National Programs’ Direct Selling Self-Regulatory Council (DSSRC), a self-regulatory agency for multilevel marketers (MLMs) and their members, released a guidance document on the use of Income Disclosure Statements (IDS). The purpose of IDS is to give prospective members information on the amount of income they can expect to earn in a business. Although these disclosures are not mandatory, if issued, they must comply with FTC regulations, as they are considered advertisements.Continue Reading Not So Fast: FTC Letter Rebukes Direct Selling Self-Regulatory Council Guidance

Last month, the Supreme Court of Maryland delivered a pivotal ruling defining the scope of the Maryland Telephone Solicitations Act (MTSA), holding that the act extended to inbound calls initiated by consumers who engaged with merchant advertisements. The Maryland Supreme Court also confirmed that the Maryland Public Service Commission can enforce the MTSA against covered entities.

The case, In the Matter of Smart Energy Holdings, LLC D/B/A SmartEnergy, originated in response to customer complaints to the Public Service Commission’s Consumer Affairs Division (CAD) alleging that their bills were excessive and that they were unable to cancel their service with SmartEnergy, a provider of 100% green energy. After proceedings before an administrative law judge, the Public Service Commission held:Continue Reading The Power of Customer Calls: Maryland Supreme Court Upholds Public Service Commission’s Interpretation of the Maryland Telephone Solicitations Act

In late January, the Federal Trade Commission (FTC) and Justice Department (DOJ) announced a collaborative effort to update their instructions regarding preservation of electronic communications to targets of pre-litigation information requests in antitrust investigations. The agencies’ new instruction makes clear that targets must preserve ephemeral messages and threatens civil or criminal sanctions for failure to do so.

A number of popular messaging platforms—both text and email—allow users to send messages that are erased and permanently disappear either immediately or shortly after the recipient reads the message. SnapChat and Slack are common examples of apps that give users the option of ephemeral messaging. Some of these apps use end-to-end encryption to prevent third-party providers from accessing the communications. For example, Signal and Proton Mail are prevalent messaging and email platforms used for their ephemeral messaging capabilities.Continue Reading The FTC’s and DOJ’s New Magic Act: Vanished Messages Will Reappear in Discovery

The Rule-A-Palooza continues at the FTC. On March 7, 2024, the Federal Trade Commission (FTC) released a Final Rule that updates the recordkeeping requirements under the Telemarketing Sales Rule (TSR). The Final Rule requires telemarketers and sellers to maintain additional records relating to their telemarketing transactions. The FTC also extended the period for which all records must be kept—now five years instead of two. The Final Rule also extended the prohibition of material misrepresentations and false or misleading statements in business-to-business (B2B) calls.

New Recordkeeping Requirements

According to the FTC, the newly added recordkeeping requirements are meant to help the FTC identify the telemarketer and seller and to link the content of the telemarketing calls with the call detail records to determine TSR violations. The new requirements are as follows:Continue Reading FTC Piles on Additional Recordkeeping Requirements and Business-to-Business Protections

Is a product recyclable if it is made of recyclable materials? Or is it recyclable when it can be recycled by waste management facilities? Last month, the United States District Court for the Northern District of California attempted to tackle these questions in response to a motion to dismiss in Della v. Colgate.

The plaintiff alleged that Colgate-Palmolive Company engaged in false and misleading advertising claims about the recyclability of its toothpaste tubes with claims like “First of Its Kind Recyclable Tube” and images of the universal recycling symbol. The plaintiffs claimed these statements were misleading because the products cannot be recycled at most waste management facilities. Colgate argued that since the tube is made from recyclable material—specifically a material that can be recycled at most facilities—the “recyclable” claim was not misleading.Continue Reading California Court Cites FTC Green Guides, Allowing Plaintiff’s Challenge of Colgate Toothpaste Tubes “Recyclable” Claims to Proceed

Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate their organization’s legal risk. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear the authors of this chapter dive deeper into surviving an FTC investigation in this week’s episode.

If your advertising or marketing practices have triggered a Federal Trade Commission (FTC) investigation and you have received a civil investigative demand (CID) (i.e., administrative subpoena) or access letter, what’s next? Every situation is unique, and every strategy, heavily fact dependent. Below are a few points to consider based on our considerable years of experience handling significant FTC matters and working with and against senior FTC officials.

Keep these points in mind when navigating an FTC investigation:

Continue Reading Surviving an FTC Investigation: An Excerpt from the Advertising Law Tool Kit

On February 15, 2024, the Federal Trade Commission (FTC) announced a two-step approach to tackling impersonation fraud. First, the FTC finalized a rule regulating the impersonation of businesses and government entities (the Impersonation Rule). Later that day, the FTC proposed a revision to the Impersonation Rule to extend liability to those impersonating individuals.

The Impersonation Rule deems it unfair or deceptive to falsely pose as or misrepresent affiliation with a government or business entity. This could include using government seals, business logos, or spoofed email addresses. Even more broadly, the rule prohibits using government or business lookalike insignias or marks without prior authorization. The rule will become effective 30 days after it has been finalized.Continue Reading Impersonation Rulemaking: FTC Takes Steps to Tackle AI