On April 22, 2021, in a unanimous decision, the U.S. Supreme Court in AMG Capital Management v. FTC held that the authorization to seek a “permanent injunction” under Section 13(b) of the Federal Trade Commission Act does not permit the FTC to obtain equitable monetary relief such as restitution and disgorgement. While the FTC may
On April 29, 2021, the Federal Trade Commission (FTC) will host a public workshop to examine consumer protection issues related to “dark patterns”—website and app interface features designed to subvert or impair consumer autonomy, decision-making, or choices.
In a recent statement, FTC Commissioner Rohit Chopra defined dark patterns as “design features used to deceive, steer, or manipulate users into behavior that is profitable for an online service, but often harmful to users or contrary to their intent.” According to Chopra, examples of dark patterns include “misdirection, confusing language, hidden alternatives, or fake urgency to steer people toward or away from certain choices.” The FTC recently warned against employing a “roach motel” dark pattern scenario, specifically where it is easy for consumers to enter into a digital subscription program, but nearly impossible to escape (unsubscribe).…
Continue Reading FTC Announces Workshop to Address Digital “Dark Patterns”
- The FTC’s Enforcement Policy on S. Origin Claims and related compliance guide apply to advertising of “Made in USA” or similar U.S. origin claims, including manufacturer advertisements of private label products to trade customers who will later market and sell such products under retail brand names.
- The $1.2 million settlement is the largest obtained by the FTC in a Made in USA case and reinforces prior signals that the agency will continue to seek monetary penalties when enforcing against allegedly deceptive Made in USA
- Marketers should continue to ensure that all health claims are supported by competent and reliable scientific evidence. While the scientific community’s understanding of COVID-19 is still relatively new, marketers should be particularly careful making any express or implied advertising claims related to COVID-19.
- NAD continues to monitor and challenge misleading health claims related to COVID-19. NAD will refer these claims to the FTC and FDA as needed.
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
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 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
On April 28, 2020, the FTC announced a preliminary order in a civil enforcement action against a supplement manufacturer that allegedly made false and unsubstantiated claims regarding COVID-19 and cancer. Specifically, the FTC alleged that Whole Leaf Organics had marketed its “Thrive” product as an “anti viral wellness booster” that treated, prevented, or reduced the risk of COVID-19. The FTC also alleged that Whole Leaf Organics marketed three products containing cannabidiol (CBD) as effective cancer treatments.…
Continue Reading More FTC Civil Enforcement for COVID-19 and CBD Cancer Treatment Claims