Takeaway:

The Second Circuit recently affirmed a district court decision denying enforcement of an arbitration clause because it found that Subway’s website was “cluttered” and that the terms and conditions were not clear and conspicuous. The decision emphasizes that terms and conditions must be easily located. Continue Reading Court Holds That Subway’s “Cluttered” Website Inhibits Ability to Compel Arbitration

On June 25, 2020, the Federal Trade Commission (FTC) announced a $22 million settlement with the marketers of a low-level light therapy device called Willow Curve to enjoin them from making unsubstantiated and deceptive claims about the device’s ability to treat chronic, severe pain and associated inflammation. The settlement comes amid ongoing attention from the FTC and state attorneys general regarding false and deceptive advertising relating to pain products (such advertising is largely reactive to the opioid crisis). It also represents another enforcement action involving “native advertising,” in which paid advertisements are formatted to appear as independent content—a practice that the FTC finds deceptive without clear disclosure. Continue Reading FTC Enters Into $22 Million Settlement With Manufacturer of Willow Curve Regarding Unsubstantiated Pain Relief Claims and Deceptive Native Advertising

While regulator actions related to the COVID-19 pandemic have understandably received the bulk of consumer protection headlines in recent months, influencer marketing remains a hot topic for the Federal Trade Commission (FTC) and National Advertising Division (NAD). As we continue into the latter half of 2020, we recap key enforcement actions, press releases, guidance, and letters related to endorsements and influencer marketing that brands may have missed during the pandemic. Continue Reading Check in on Influencer Marketing

On July 9, 2020, the U.S. Supreme Court granted certiorari in two cases to review whether the FTC has authority to seek restitution under Section 13(b) of the FTC Act. Section 13(b) provides that the FTC “may seek, and after proper proof, the court may issue, a permanent injunction.” For decades, courts have interpreted this language to authorize the full panoply of equitable remedies, including restitution and disgorgement of ill-gotten gains. Continue Reading Supreme Court to Review FTC Authority to Obtain Restitution

The co-chairs of Perkins Coie’s Advertising, Marketing & Promotions (AMP) group are excited to launch their podcast titled The AMP Moment. Meant to be easily digestible for busy in-house marketing and litigation counsel, the podcast focuses on where advertising, marketing, and promotions law meets practicing in the moment. On the first episode, Jason Howell and Amanda Beane discuss practicing law in the current climate and share hot marketing and litigation topics during COVID-19, including health claims and cause marketing. Listen to their first episode here.

As part of its routine monitoring program, the National Advertising Division (NAD) recently announced several decisions involving social media posts that advertised products as having health benefits that could help protect against COVID-19. The NAD’s inquiries are consistent with similar efforts by the Federal Trade Commission (FTC) intended to combat false and misleading advertising in connection with the pandemic. In its decisions, the NAD noted that it shares the FTC and FDA concerns related to advertising that touts a product can treat or protect consumers from COVID-19 and is therefore using its monitoring resources to identify misleading health claims. Continue Reading NAD Uses Monitoring to Discourage Misleading COVID-19 Health Claims

Last week, the FTC sent another 50 warning letters related to COVID-19 advertising claims, adding to the growing list of FTC warnings and actions intended to address false and deceptive marketing during the pandemic. The latest round of letters targets companies advertising their products and services as effective in preventing or treating COVID-19 without adequate scientific support, including acupuncture, intravenous (IV) therapies, ozone therapy, stem cell treatments, sound frequencies, air-purifiers, and immune-defense supplements. Continue Reading FTC’s COVID-19 Response: Latest Developments

A global marketer who charged consumers after they signed up for “free trials” has settled with the FTC. The FTC alleged that the defendants made $74 million by enrolling customers for paid subscriptions of cosmetics and dietary supplements without their consent. The FTC characterized its complaint as part of an effort to hold companies accountable when they supposedly offer “free trials” but hide the real terms and conditions.

The FTC filed a complaint in July 2019, seeking a permanent injunction and other equitable relief against AH Media Group, LLC, and the company’s owners, Henry Block and Alan Schill. The FTC later filed an amended complaint in October 2019, adding Zanelo, LLC (“Zanelo”) as a defendant. The complaint alleged that Zanelo was also active in the deceptive scheme. Continue Reading FTC Stops Online Subscription Service Offering “Free” Trials with Hidden Terms

The ESRB, and it’s European equivalent PEGI, have issued new labeling requirements for video games containing loot boxes or other types of in-game purchases with randomized elements. The new labeling designation of “In-Game Purchases (Includes Random Items)” includes, but is broader than, loot boxes. Failure to adhere to this requirement may result in fines. Read the full article here.

The Federal Trade Commission (FTC) recently announced a settlement with online fashion retailer, Fashion Nova, requiring it to pay $9.3 million in refunds to consumers for violations of the FTC’s Mail, Internet, or Telephone Order Merchandise Rule (“Mail Order Rule”).

In its complaint, the FTC alleged that Fashion Nova (1) made false representations to consumers about the speed of its shipping and (2) failed to refund consumers for items that were never shipped.  For example, according to the complaint, Fashion Nova regularly advertised “Fast Shipping, “2-Day Shipping,” “Fast International 6-10 Shipping,” and “Expect Your Items Quick!,” but regularly did not meet these promises or notify consumers of shipping delays.  Also, instead of issuing refunds to consumers for orders that were never shipped, Fashion Nova issued gift cards, which do not qualify as appropriate refunds under the Mail Order Rule. Continue Reading Fashion Nova Settles with FTC for $9.3 Million for Alleged Violations of the Mail Order Rule