Astroturf was again in the news last week, but not because the big game whose name we can’t mention was played on synthetic turf. Rather, last week, the office of the NY Attorney General (“AG”) announced it reached a precedent-setting settlement with artificial engagement company Devumi LLC and related companies (“Devumi”) over the selling of
On November 14, the FTC Commissioners, in an opinion authored by Chairman Simons, issued an opinion in an antitrust case involving the online advertising industry that has important implications for online advertisers. Last November, we discussed the initial decision by FTC ALJ Chappell that 1-800 Contacts had violated Section 5 of the FTC Act by coming to agreements with its competitors limiting their abilities—as well as 1-800 Contacts’ ability—to bid on each other’s trademarks and URLs in auctions for placement in search results. In his decision, termed an “Initial Decision” in FTC parlance, Judge Chappell found that those agreements directly harmed competition and consumers in the market for contact lenses sold over the internet, and he rejected the efficiency justifications proposed by 1-800 Contacts.
The full Commission went even further, affirming the ALJ’s decision, albeit on different grounds, and also holding that the agreements also violated the antitrust laws by harming competition in the bidding market for search engine keywords, reducing the prices that search engines like Google received for presenting ads in search results, and reducing the quality of the results delivered to consumers. As a result of the Commission’s decision, 1-800 Contacts is barred from either enforcing the agreements it already has with other online contact lens marketers, or from entering into similar agreements in the future.
My kids watch a lot of YouTube videos, ranging in topics from taking an alligator to the vet to the world’s longest walk on Legos. They have their favorites – YouTubers under the names LoserFruit and Dude Perfect come to mind. I have caught my daughter practicing for her own channel about making slime.
Those aspirations had me thinking about the career path of being an “influencer.” Indeed, trickshot stars and video game aficionados have been hired as brand ambassadors for everything from sports equipment and toys to automobiles and insurance. By some accounts, YouTubers are making five-to-seven figures as brand partners.
While brand ambassadors can influence the purchasing choices of their audience, there are rules in the U.S. about influencer marketing that influencers must follow and brand marketers must monitor. This post outlines the basics in three golden rules.
Venable clients that engage in selling goods and/or services over the internet should evaluate whether the recent Supreme Court decision in South Dakota v. Wayfair will now require them to begin collecting sales and use taxes in states where they have not previously done so. In the Wayfair Case the Court held that a state can require a remote vendor to collect its sales/use tax based merely on “economic nexus” with the state. The prior law standard requiring a remote vendor to have physical presence in a state has been overturned. Under the South Dakota law at issue in Wayfair, an internet retailer is required to collect South Dakota sales tax if it has more than $100,000 of sales into the state or more than 200 sales transactions in the state over the course of a year.
Our chart below lists the states that currently have authorized an economic nexus standard similar to that approved in Wayfair and lists the threshold requirements for each state. This list can be expected to grow as states without economic nexus laws for sales tax purposes rush to alter their existing standards to take advantage of Wayfair’s liberalization of the sales tax nexus rules.
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.
Any organization with a publicly-facing website—in other words, virtually any organization—should be aware that the World Wide Web Consortium (W3C) recently published its most recent update to the Web Content Accessibility Guidelines (WCAG) 2.0, titled WCAG 2.1. The W3C is a private organization that develops website accessibility standards.
As you may now know, in recent years, the WCAG 2.0 has become the widely accepted industry standard of technical requirements for making websites, mobile apps, and other digital content accessible to persons with disabilities. Although the Department of Justice (DOJ) has yet to adopt the WCAG 2.0 as the applicable standard for the private sector, governmental and private plaintiffs increasingly urge adopting WCAG 2.0 AA as the standard by which to measure a website’s accessibility—and more and more courts and agencies do so.
What if the influencer you had been following on Instagram—an influencer whose style choices you admired, and who supported social causes that you believed in—turned out to be…a robot?
This is what happened to followers of Lil Miquela, a 19-year old model from California who launched an Instagram account in 2016. For the past two years, she’s been posting photos of herself in designer clothing, eating at trendy restaurants, and pitching beauty products. Along the way, she managed to amass over a million followers. Then, in mid-April, after getting hacked by a fellow influencer named Bermuda who refused to return her account unless she “[told] the world the truth”— Miquela revealed that she wasn’t human. She is a CGI creation. And so is Bermuda.…
Continue Reading The Rise of CGI Influencers
Robust conversations about IoT, smart technology, and product safety continue across the federal government. On May 16, 2018, the Consumer Product Safety Commission (CPSC) held a public hearing on the Internet of Things (IoT) and consumer product hazards. (See previous related blog posts here and here about the hearing.)
On June 13, the House Energy and Commerce Committee’s Subcommittee on Digital Commerce and Consumer Protection (SDCCP) voted to send H.R. 6032, the State of Modern Application, Research, and Trends of IoT Act (SMART IoT Act), to the full committee for consideration. The SMART IoT Act directs the Secretary of Commerce to conduct a study on the state of the internet-connected devices industry and is authored by SDCCP Chairman Latta and Rep. Peter Welch. It will be interesting to see whether or how quickly the SMART IoT Act actually becomes a law. Smart IoT technology is one of the hottest topics these days other than blockchain and bitcoin. Many different stakeholders have vested interests in how the government chooses to engage on this issue. The SMART IoT Act is a first step for Congress to actively engage and survey the federal government on this issue.
On May 16, 2018, the Consumer Product Safety Commission held a public hearing to receive testimony on the Internet of Things (IoT) and issues related to product safety (IoT Hearing). Thirteen diverse stakeholders presented at the IoT Hearing. Of the thirteen presenters, there were three representatives of consumer organizations, one academic, one security expert and researcher, one representative from a testing lab coalition, one representative from a testing and voluntary consensus standards organization, two representatives from international interests, and three representatives from industry trade associations or coalitions. While each presenter had his/her own agenda, there was some agreement: There are potential significant safety, privacy, and product liability issues associated with emerging IoT technologies. At the hearing, the CPSC learned there are currently 8.4 BILLION connected things, and 5 BILLION consumer applications—numbers allegedly on track to double by the year 2020.
How can the CPSC address the related safety issues?
The consumer activists described the situation as “urgent” and pressed the Commissioners to provide a certification process for IoT devices and stronger mandatory regulations for manufacturers that incorporate software technologies into their products. The industry trade associations/coalitions advocated for a voluntary consensus-based, industry-led approach—which they have already started to address. They argued that their approach would be the most cost-efficient and efficient way to implement the most up-to-date technologies to address the growing problem.
In 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:
- 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;
- Establishing, implementing, and maintaining a system to monitor and review influencer posts; and
- Immediately terminating and ceasing payment to any noncompliant endorser.