Key Update:

  • Washington consumers filed a proposed class-action lawsuit against Old Navy, accusing the retailer of sending customers emails with incorrect information regarding the duration of promotions and sales.
  • The emails allegedly advertised that products were on sale for a limited time or that discounts were available for a last-chance offer, when in fact, the sales continued beyond those time frames.

According to the complaint, Old Navy sent emails indicating that customers had a final opportunity to receive a discount. However, the plaintiffs claim that they received emails the next day promoting the same discount. The plaintiffs complain that the emails contained images of ticking clocks and phrases urging recipients to act quickly, even when there was no genuine urgency.

The plaintiffs claim that Old Navy’s actions violate both the Consumer Protection Act of Washington and the state’s Commercial Electronic Mail Act. They are suing for $500 in statutory damages for each email that violates the latter.

The FTC has expressly stated that creating a false sense of urgency is a form of dark patterns.

On May 16, 2023, Federal Communications Commission (FCC) Chairwoman Jessica Rosenworcel announced that she shared proposals with her fellow commissioners that would, for the first time, require videoconferencing platforms to comply with accessibility requirements under the Communications Act and agency rules governing interoperable videoconferencing services.

Among other things, Chairwoman Rosenworcel’s proposals would (1) treat “interoperable videoconferencing services” as providers of advanced communications services, subjecting them to certain accessibility requirements (including recordkeeping and certification obligations) under the Twenty-First Century Communications and Video Accessibility Act (CVAA) and the FCC’s rules; (2) amend the FCC’s rules to add accessibility performance objectives for videoconferencing platforms, including text-to-speech capabilities; speech-to-text (captioning) capabilities; and American Sign Language (ASL) support; and (3) conditionally waive, for one year, a rule that limits video relay service (VRS) users’ ability to turn off their video when not actively participating in a videoconference.

In sharing these proposals, Chairwoman Rosenworcel explained that while videoconferencing has played an important role in consumers’ lives since the pandemic, it remains difficult for many people with disabilities to effectively use videoconferencing platforms. It is unclear whether (and if so, when) the FCC will take official action on the proposals, and whether the proposals may be further modified prior to publication (to the extent the FCC takes that route). Nevertheless, given the chairwoman’s keen interest in this issue and parallel efforts in Congress to extend accessibility requirements to videoconferencing platforms, providers of videoconferencing services should be prepared to take steps in the near term to integrate accessibility support into their platforms.

The FTC published the proposed Negative Option Rule (Rule) to the Federal Register on April 24, 2023, with the goal of preventing unfair and deceptive practices related to recurring subscriptions for products and services. The FTC has invited the public to comment on proposed changes to the Rule. Written comments must be submitted by June 23, 2023.

See our blog for more information about the proposed Rule.

Key updates:

  • Under its Penalty Offense Authority, the Federal Trade Commission (FTC) warned almost 700 marketers with a Notice of Penalty Offenses (Notice) that certain advertising claims must be proven or substantiated with reliable evidence, especially those related to health products, or they may face civil penalties.
  • Advertisers should have a reasonable basis for health claims, including complying with recognized scientific standards when making claims about the effectiveness of their products in curing, mitigating, or treating significant conditions such as cancer or heart disease.
  • The Notice comes on the heels of the FTC updates to Health Products Compliance Guidance (the Health Guides) and indicates the FTC continues to scrutinize health claims.
Continue Reading Another Round of Notice of Penalty Offenses—The FTC Targets Health Claims

Key Update:

  • The National Advertising Division (NAD) updated its Fast-Track SWIFT process (Single Well-defined Issue Fast Track) to accommodate “implied” claims as long as they are clear cut and involve a single issue.
  • In 2020, the NAD launched its Fast-Track SWIFT resolution process, promising to resolve single-issue cases within 20 business days (as opposed to approximately three months in a standard NAD case). For an overview of the process, see our blog.

Previously, the SWIFT track was only used for express claims, and NAD frequently rejected SWIFT treatment for challenges to implied claims. The process, however, is now expanded to include “misleading express and implied claims.” NAD hopes that by making the change it will reduce the number of disputes over SWIFT jurisdiction that revolve around whether the contested claim is express or implied.

Continue Reading National Advertising Division Expands Fast-Track SWIFT Process for 2023

As part of its assessment of the Guidelines for the Use of Environmental Marketing Claims (Green Guides), the Federal Trade Commission (FTC) will hold a workshop on May 23, 2023, to consider “recyclable” advertising claims and issues related to environmental claims. The workshop is titled “Talking Trash at the FTC: Recyclable Claims and the Green Guides.”

Continue Reading FTC To Hold Workshop on “Recyclable” Claims as Part of Continuing Green Guides Review

The Federal Trade Commission (FTC) recently announced a notice of proposed rulemaking to expand its “Negative Option Rule” to apply to all recurring subscription programs (Proposed Amendment). The Proposed Amendment would have a sweeping effect on recurring subscriptions, requiring—similarly to some state laws—clear and conspicuous disclosure of material terms, double opt-ins for sign-ups, a simple cancellation method, and an annual renewal reminder. If approved, the Proposed Amendment would set a nationwide floor by requiring specific practices for subscriptions, but it would not supplant existing state laws addressing recurring subscriptions. The amendment would also greatly expand the FTC’s ability to seek penalties and consumer redress for violations.

Continue Reading FTC Proposes Rulemaking for Recurring Subscription Programs

On March 27, 2023, the U.S. Supreme Court granted certiorari in a case concerning a plaintiff’s standing to bring an Americans with Disabilities Act (ADA) suit against a hotel where the plaintiff lacked any intention of ever visiting the hotel. This case could have major implications for the continued viability of “tester” standing in ADA cases and therefore greatly affect the number of ADA claims brought every year against hotels and other businesses offering goods and services to the public.

Continue Reading Supreme Court Grants Certiorari To Determine Viability of ADA Tester Standing

Key Update:

  • The Federal Trade Commission (FTC) has used a $1 million settlement with NutraClick to reimburse customers who allegedly believed they were receiving free products but were actually enrolled in an unwanted monthly subscription program.
Continue Reading FTC Settlement With NutraClick Reimburses Customers Nearly $1 Million for Recurring Subscription Practices

The Federal Trade Commission (FTC) recently issued Health Products Compliance Guidance (the Health Guides). The Health Guides replace prior FTC guidance issued in 1998 that largely focused on dietary supplements. The new guidance addresses advertising practices for a broader range of products, namely “any health-related product,” including foods, over-the-counter drugs, homeopathic products, devices, health equipment, diagnostic tests, and health-related apps.

Key updates include:

  • Revised guidance on the “clear and conspicuous” standard, including information regarding visual and audio disclosures, notice that hyperlink disclosures are inadequate (a departure from the FTC’s 2013 guidance revision, which states that hyperlinks may be inadequate).
  • Stricter definition of “competent and reliable scientific evidence,” emphasizing the FTC expectation that advertisers will support their health-related claims with high-quality, randomized, and controlled human clinical trials. However, some existing case law calls into question this restrictive interpretation of “competent and reliable scientific findings.” See United States v. Bayer Corp., No. CV 07-01(JLL), 2015 WL 5822595, at *15 (D.N.J. Sept. 24, 2015).
  • Updated guidance regarding key components of high-quality research and testing methodology, such as control groups, randomization, and double blinding, as well as the requirement that results be statistically significant and clinically meaningful to consumers. The FTC also warns against “p-hacking,” which involves relying on an analysis of a small subset of data after failing to find a treatment effect in the population as a whole.
  • Incorporation of revisions to previous FTC guidance materials, such as an enforcement policy statement on homeopathic products and direction on endorsements and testimonials.

In short, new revisions constitute a meaningful expansion of the FTC’s guidance for advertising health-related products, expanding compliance to all health-related claims and emphasizing the importance of supporting these claims with competent and reliable scientific evidence. Marketers of health-related products would be well advised to review and understand the new Health Guides.