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.
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The Federal Trade Commission (FTC) and self-regulatory bodies such as the Electronic Retailing Self-Regulation Program (ERSP) have their attention focused on social media influencers. In a recent decision involving Alo, LLC—the company behind Alo Yoga, a popular purveyor of yoga-related merchandise—ERSP reviewed approximately 60 private Instagram accounts containing endorsements for Alo Yoga’s products. ERSP’s message to advertisers is a familiar one: influencers and endorsers with a material connection to the advertiser must disclose such connection and brands must institute good training and monitoring processes to encourage such disclosures.

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On September 26, 2018, Christine S. Wilson was sworn in as a Commissioner at the Federal Trade Commission into the seat previously held by Maureen Ohlhausen.  Commissioner Wilson most recently held a senior legal role at Delta Airlines, previously was an antitrust partner at two large law firms, and during the George W. Bush Administration served as Chief of Staff to FTC Chairman Timothy Muris.

With the addition of Commissioner Wilson, the FTC now has a full slate of five commissioners at the helm, all of whom joined the agency within the last six months.  It is still early days at the FTC under the leadership of Chairman Joe Simons but there are already signs that change is afoot.  For example, the FTC has begun a broad review of whether it is using the full range of its remedial powers as effectively as possible, including whether there are new or infrequently applied remedies, such as monetary relief or notice to affected consumers in deceptive advertising cases. 
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Consumers notice and are more likely to buy products that are marketed as Made in USA, but companies face significant legal risk, negative publicity, and decades of government oversight if they overstate the extent to which their products are made in the United States.

  • Companies marketing their products without qualification as Made in USA

Takeaways:

  1. Support any comparative claims and clearly disclose the basis of the comparison.
  2. Be specific about claims regarding products or components made in the United States.

Last month, the National Advertising Division (NAD), a self-regulatory body, recommended that Telebrands, Corp., discontinue certain advertising claims for the company’s Atomic Beam flashlight, including claims comparing its brightness

 

Takeaways:

  1. Health-related advertising claims must be supported by competent and reliable scientific evidence, generally consisting of human clinical trials that are methodologically sound and statistically significant to the 95% confidence level.
  2. Advertising claims must be clearly expressed as ingredient claims if the substantiation addresses only the efficacy of the ingredients in the product, not the product itself.


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Facebook has implemented a new policy regarding ads related to cryptocurrency. While Facebook previously banned all such ads, under the revised policy effective June 26, advertisers of cryptocurrency content may apply online for approval of their advertisement. “Cryptocurrency content” is considered by Facebook to include “any advertisements or content in any way related to cryptocurrency”. In the application, advertisers are asked about their relevant licenses, whether their company is traded on a public stock exchange, and other public background information regarding their company. Facebook clarified in its press release that its ban on products such as binary options and initial coin offerings (ICOs) remains intact. 
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The NAD recently recommended that Perdue Farms, Inc. modify or discontinue certain TV and YouTube ads about Perdue’s “Harvestland Organic” chicken. Tyson Foods, Inc. challenged the Perdue ads before the NAD, arguing that they broadly communicated that all of Perdue’s chickens are “happy” and raised “organically” (free-range, non-GMO, 100% vegetarian-fed, and raised without antibiotics). Perdue responded that ads only communicated claims about Perdue’s “Harvestland Organic” sub-brand. The NAD, however, viewed the overall “net impression” conveyed by the ads and found that they communicated broad claims about all of Perdue’s chickens, in part because the ads contained many visual and audio references to the primary Perdue brand, but only fleeting visual references to the Harvestland Organic logo. Perdue announced that it will appeal the NAD’s decision.
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The annual ABA Antitrust Law Spring Meeting held in Washington, D.C., last month included sessions on consumer protection. Key takeaways include the following:

  • The FTC Act remains broad in scope, claims about products treating serious diseases must be supported by clinical testing, and companies promoting their products as “Made in the USA” must meet the