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.
FTC Issues Updated Guidance for Advertising Health Products
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
FTC Targets Lasik Eye Correction Promotional Pricing With $1.25 Million Settlement Order
Key Updates:
- LCA-Vision, d/b/a LasikPlus and Joffe Medicenter, has agreed to pay $1.25 million to settle the Federal Trade Commission’s (FTC) allegations that it misrepresented the price of eye surgery to entice prospective customers.
- According to the FTC’s allegations, only a small percentage of patients qualified for the promotional rate.
- In addition to the monetary fine, the clinics are prohibited from misrepresenting the cost of surgery or omitting restrictions on advertised services.
Building Blocks – Lawmakers Are Increasingly Focused on Children’s Privacy
Key Takeaways:
- On September 15, 2022, California Governor Gavin Newsom signed into law the bipartisan California Age-Appropriate Design Code Act (CAADCA or the Act), Cal Civ. Code 1798.99.28 et seq., which goes into effect on July 1, 2024.
- The Act places new obligations on companies with online products, services, or features that are “likely to be accessed by children” under the age of 18.
- The Act is notable for its strict obligations applying to a broad spectrum of businesses, including those whose digital products and services are used by a significant number of minors, even if the business does not directly target children. It is also notable for applying to all minors under 18, rather than distinguishing between those under 13 and those aged 13-18.
- A recent lawsuit brought by a technology trade group claims the Act violates free speech and is preempted by the Children’s Online Privacy Protection Act (COPPA), which sets website operator requirements for online interactions with children 13 and under, and the Communications Decency Act (CDA).
- At least five other states are considering children’s privacy-related legislation.
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FTC Invites Comments for Green Guides Review
The Federal Trade Commission (FTC) announced that it is seeking public comment on the Green Guides for the Use of Environmental Claims (Green Guides) as it considers potential updates. Last updated in 2012, the Green Guides serve as the FTC’s guidance for environmental marketing claims. The FTC is seeking public feedback on various green advertising topics, including whether to make the Green Guides independently enforceable and their interaction with other environmental marketing laws. The FTC is interested in hearing what industry stakeholders and consumers think about environmental claims generally, including those that are not currently covered by the guidelines.
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Vonage To Pay $100 Million To Settle FTC Action Regarding Dark Patterns and Junk Fees
Key Updates
- The Federal Trade Commission (FTC) settled with internet phone service provider Vonage for allegedly using dark patterns to make it difficult for customers to cancel their phone service, charging unnecessary fees, and continuing to charge customers who had canceled their service. Dark patterns are design practices – often for a website or software app – that harm consumers, typically by manipulating or tricking them into making choices that they might not otherwise have made.
- Under the settlement terms, Vonage is required to obtain express consent before charges, simplify its cancellation procedure, and pay $100 million in refunds.
FTC Explores Potential Regulations To Prohibit “Junk” Fees
Key Update:
- The Federal Trade Commission (FTC) is considering rulemaking to curb unfair and deceptive fees.
- The FTC seeks comments on the effects of such fees and the methods companies may employ to impose them.
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New Bill Seeks To Establish Digital Accessibility Requirements for Websites and Apps
U.S. Senator Tammy Duckworth and U.S. Representative John Sarbanes have jointly introduced a new bill—the Websites and Software Applications Accessibility Act (the Act)—to address barriers that Americans with disabilities encounter when attempting to use websites and apps. The Act proposes to codify digital accessibility requirements for websites and apps, set schedules for continuous accessibility-related rulemaking to keep up with technological changes, and establish organizations to serve as support structures to facilitate digital accessibility. If enacted, the Act would fill a hole left open by the Americans with Disabilities Act (ADA), which has been interpreted by some (but not all) courts to apply to websites and apps.
FTC Issues New Dark Patterns Report and Signals Further Enforcement
The Federal Trade Commission (FTC), on September 15, 2022, published Bringing Dark Patterns to Light (Dark Patterns Report), which stemmed from an FTC workshop. The Dark Patterns Report highlights common dark patterns—design practices that trick or manipulate consumers into making choices that they might not otherwise have made and that may cause harm. According
FTC and CARU Target Advertising to Children in the Digital Age
Key Update:
- The Federal Trade Commission (FTC) will host a virtual event on October 19, 2022, titled “Protecting Kids From Stealth Advertising in Digital Media.” The FTC is also seeking public feedback on how digital advertising and marketing affect children.
- The Children’s Advertising Review Unit (CARU) of BBB National Programs issued a compliance warning reminding advertisers that the Self-Regulatory Guidelines for Children’s Advertising (Advertising Guidelines) apply to advertising directed to children in the metaverse.
- Brands should be aware of this increased scrutiny by the FTC and CARU when engaging in advertising to children in digital media.
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