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.

Continue Reading FTC Sues Advertising Behemoths Google and iHeartMedia for Deceptive Endorsements by Radio Personalities

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.”

Continue Reading FTC Issues New Rulemaking Proceedings on Customer Reviews and “Junk Fees”

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

At the height of the pandemic, the Federal Trade Commission took swift action to stamp out scammers and other actors looking to take advantage of—or simply make a buck off—the crisis. One of the early moves it made was to file separate lawsuits against a pair of companies that sold sanitizer, face masks, and other protective equipment gear (PPE), but failed to ship the products as promised.

As of this week, the FTC has won summary judgment in both cases, FTC v. QYK Brands LLC d/b/a Glowwy and FTC v. American Screening, LLC. The cases highlight the two following points.

Continue Reading When a Mail Order Rule Case Is Not Just About the Mail Order Rule

Last week, the FTC brought and settled enforcement actions against two manufacturing companies for allegedly limiting customers’ right to repair purchased products under unlawful warranty terms. The FTC alleged that the two companies, Harley-Davidson Motor Company Group, LLC (a motorcycle manufacturer) and MWE Investments, LLC (a Westinghouse outdoor generator maker), acted illegally when using voidable warranties that required customers to use manufacturer-supplied parts and service instead of allowing customers to use independent dealers to either supply parts or perform repairs. In the settlements, the FTC ordered both companies to remove these warranty terms, admit to customers what they did, and ensure fair competition between dealers and independent third parties providing repair services and parts.

According to the FTC’s complaints against Harley-Davidson and MWE Investments, the companies’ unlawful warranty terms violated the Magnuson-Moss Warranty Act for conditioning warranty coverage on using the companies’ respective parts or services without either seeking the FTC’s waiver or providing the parts or services free of charge under the warranty. The FTC also alleged the manufacturers acted deceptively in failing to disclose these conditions properly. The FTC alleged that Harley-Davidson also violated the FTC’s Rule Governing Disclosure of Written Consumer Warranty Terms and Conditions (“Disclosure Rule”) when it failed to provide a single document containing the warranty terms, so customers would need to contact authorized dealers to understand the full terms of their warranties.

Continue Reading Repair Your Warranty Terms: FTC Takes Action Against Unlawful Repair Restrictions

Taking a page from Federal Trade Commission legend (and one of our mentors) Bob Pitofsky, the FTC recently announced that it plans to hold a series of public hearings modeled after the FTC’s 1995 “Global Competition and Innovation Hearings.” New FTC Chair Joe Simons said that the hearings will provide the FTC with an opportunity to engage in “self-examination and critical thinking” to ensure that the agency can keep pace with changes in the economy. Chairman Simons also recently told reporters that regardless of what the hearings may demonstrate, “Just in terms of priorities: our mantra is vigorous enforcement. That is what I did the last time I was here in the Bureau of Competition, and that is what I expect to do now not only in competition but also in consumer protection.”

Public comments may be submitted on any of the proposed topics until August 20 with hearings expected to take place in the fall and winter. Most of the topics are of more relevance to the Commission’s competition mission, but a few also relate to consumer protection. For example, the Commission is inviting comments on the state of consumer protection law and enforcement generally as well as consumer protection issues specific to the communications, information and media technology fields. Comments are also invited on the Commission’s investigation, enforcement and remedial processes as well as possible unfair or deceptive conduct in markets that feature “platform businesses.” Not surprisingly there are also a number of topics centered around data security including the extent of the Commission’s remedial authority.

Continue Reading Upcoming FTC Hearings Include Several Topics Relating to Consumer Protection

hashtagWhat 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

https://www.youtube.com/watch?v=m648v4s5sFc

It’s Summer in the City and the back of my neck, and just about everything else, is getting dirty and gritty.  The FTC, however, just announced two cases reminding advertisers to keep it clean on claims that their products can sanitize.

The FTC sued Angel Sales, Inc. and Zadro Health Solutions, as well as the two companies’ principals, alleging that the companies’ claims that their ultraviolet light devices could kill everything from foot fungus to MRSA were unsubstantiated and therefore deceptive.  The companies settled the FTC’s charges by agreeing to substantial monetary judgments and injunctive relief prohibiting such claims in the future.  In 2011, the FTC settled similar charges against Oreck for its UV vacuum cleaner.

Continue Reading FTC Reminds Marketers to Keep It Clean

The Magnuson-Moss Warranty Act (MMWA), is one of many vehicles that plaintiffs use to bring lawsuits over warranty claims.  It is a federal statute that governs warranties on consumer products.  The Federal Trade Commission has enacted regulations governing the disclosure of written consumer product warranty claims.

Just this month, the Federal Trade Commission completed a review of its Interpretations, Rules and Guides under the MMWA.  One of the revisions that the FTC made was to clarify that under the MMWA, warranty language that implies to a consumer that warranty coverage is conditioned on the use of select parts or service is deceptive.  The FTC wrote that “[g]enerally, the MMWA prohibits warrantors from conditioning warranties on the consumer’s use of a replacement product or repair service identified by brand or name, unless the article or service is provided without charge to the consumer or the warrantor has received a waiver.” 
Continue Reading FTC’s New Guidance on Implied Tying Claims Under the Magnuson-Moss Warranty Act