In November, the FTC issued a new resource for online social media influencers, titled “Disclosures 101 for Social Media Influencers,” which provides compliance tips for influencers disclosing payment, free products, and other “material connections” in their social media posts. This new guide is the latest development in an ongoing effort by the FTC to educate influencers on when disclosure obligations apply and how to make effective disclosures. A few takeaways from the new guide Continue Reading FTC Publishes “101” Disclosures Guidance for Social Media Influencers
On October 21, 2019, the Federal Trade Commission (FTC) announced that it had settled two cases regarding alleged fake indicators of social media influence and fake product reviews.
In the first action, the FTC alleged that Devumi, LLC and its CEO had “sold fake indicators of social media influence, including fake followers, subscribers, views, and likes, to users of different social media platforms, including LinkedIn, Twitter, YouTube, Pinterest, Vine, and SoundCloud.” These fake indicators were designed to make the influencers more attractive to businesses and individuals hiring the influencers or making purchase decisions related to the influencers (e.g., the more followers or engagement associated with the influencer, the higher fees a business might pay to engage them or more value consumers might give their opinion). Continue Reading FTC Settles Two Cases of Alleged Fake Reviews and Online Influence
Businesses must begin taking concrete steps to prepare for the next wave of environmental and consumer products safety litigation, which is likely to focus on any historic and/or current use of materials containing certain per- and polyfluoroalkyl substances (PFAS). An umbrella term covering more than 5,000 man-made chemical compounds, PFAS has been widely used in consumer and industrial products for more than 70 years, including in many common food containers and wrappers, non-stick cookware, furniture, clothing and other products that resist water, grease or oil. Known colloquially as “forever chemicals,” scientific studies have suggested that human exposure to unsafe levels of PFAS may be linked to a variety of health risks. The federal government has announced regulatory and legislative efforts to reduce or eliminate the use of PFAS compounds in consumer products and several state governments have already adopted laws doing the same.
The following update addresses possible risks for manufacturers and distributors of products containing PFAS, as well as next steps these companies should take. Read our update here.
On Thursday, October 26, 2019, and Friday, October 27, 2019, nearly 40 complaints were filed in the Southern District of New York against various retailers and restaurants alleging that failure to provide gift cards in Braille violates the Americans with Disabilities Act. If you are a company that sells store gift cards either online or in places of public accommodation, you may want to take note and analyze your risk.
In late September 2019, California enacted a new law, AB 647, that would impose expanded disclosure requirements on certain cosmetic and disinfectant products. Effective in July 2020, manufacturers and importers of cosmetics and disinfectants that contain hazardous substances, as defined by California’s Department of Industrial Relations (“DIR”), would need to post a safety data sheet (“SDS”) on the entity’s website by the product’s brand or commonly known name. The required SDS must also be translated into Spanish, Vietnamese, Chinese, Korean, and other languages as required by DIR. Continue Reading California Expands Disclosure Requirements Regarding Cosmetics and Hazardous Substances
Regardless of your industry it may be time to take a closer look at your potential vulnerability to a claim about hidden fees or drip pricing. Continue Reading AGs and Consumers Fight “Drip Pricing” and “Hidden Fee” Programs
In September 2019, the FDA sent warning letters to three tattoo ink manufacturers about microbial contamination in the products. The agency conducted microbial analysis of tattoo ink samples collected from customers around the country.
The warning letters noted that the tattoo inks contained pathogens and microorganisms that rendered them adulterated under the Federal Food Drug & Cosmetic Act (FFDCA). The agency regulates tattoo inks as “cosmetics” under the FFDCA because the inks are introduced into the body to “promot[e] attractiveness” or “alter the appearance.” See 21 U.S.C. § 321(i). Continue Reading FDA Issues Warning Letters Regarding Adulterated Cosmetics
Earlier today, the Supreme Court denied a petition filed by Domino’s Pizza asking the Court to decide whether Title III of the Americans with Disabilities Act (ADA) applies to websites and mobile apps. As we’ve previously discussed, the U.S. Court of Appeals for the Ninth Circuit issued a decision in January of this year holding that companies whose online activities share a nexus with physical places of public accommodation may be held liable under the Title III for failing to make their websites and apps accessible to persons with disabilities, and that the absence of formal web accessibility regulations implemented by the Department of Justice does not raise due process concerns. The Supreme Court’s denial of Domino’s appeal means that the Ninth Circuit decision stands. The case is to be remanded to the U.S. District Court for the Central District of California, which will have to decide in the first instance whether Domino’s website and app satisfies the ADA. The Supreme Court’s decision leaves unresolved a long-standing circuit split concerning the applicability of the ADA to the Internet, and will no doubt attract further web accessibility suits by disability rights advocates and private plaintiffs.
On June 28, the Ninth Circuit adopted the California Supreme Court’s McGill rule in Blair v. Rent-a-Center, Inc., 928 F.3d 819 (9th Cir. 2019). In Blair, the Ninth Circuit held the McGill rule to be consistent with the Federal Arbitration Act (“FAA”), and therefore not preempted by the federal statute.
The McGill rule was the result of a decision by the California Supreme Court in which it held that a consumer credit card agreement waiving the consumer’s right to seek public injunctive relief violated California Civil Code § 3513. Section 3513 provides that “a law established for a public reason cannot be contravened by a private agreement.” Blair, 928 F.3d at 824. Several California consumer protection statutes explicitly provide consumers with the right to pursue a public injunctive remedy. Continue Reading The Ninth Circuit Ratifies California’s McGill Rule: Consumers Cannot Waive Statutory Rights to Seek a Public Injunction via Arbitration Agreement
On August 7, 2019, the Federal Trade Commission convened an all-day workshop to discuss consumer protection issues associated with “loot boxes”—randomized virtual items players can purchase or earn in video games. While the production cost of video games has increased significantly, the average price of console games has largely not changed since the 1970s, and many mobile games are free to download. Panelists observed that loot boxes have helped bridge the gap between this high cost of video game production and their relatively flat sale price. Continue Reading Video Game Loot Boxes: FTC Workshop on the Role of Virtual Rewards in Game Play