It’s been a busy year in consumer protection law and during this holiday season, we’re taking stock of the past year and looking ahead to what’s next.  In 2018, we saw many class actions related to pricing practices, scrutiny of Made in USA claims, continued growth in popularity and the evolution of influencers (CGI influencers!), changes to automatic renewal laws, and a new slate of FTC Commissioners.

In 2019, we expect significant activity in these areas, plus more activity related to consumer reviews and the Consumer Review Fairness Act.  Further, representatives from the FTC are signaling that the FTC may start seeking more monetary remedies for consumer protection violations moving forward (versus only injunctive relief and ongoing monitoring).  Finally, the growth of the blockchain and digital currencies has raised a number of complex legal issues that companies using the blockchain must navigate, and 2019 will likely bring additional guidance (and challenges) in this area.

For more thoughts on what comes next, see our Hot Ad Law Topics for the New Year.

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 must at least meet the “all or virtually all” standard, meaning that all significant parts and processing that go into the product are of U.S. origin.
  • Federal, state, self-regulatory, and private actors are increasingly bringing enforcement actions and other litigation for false or misleading use of Made in USA labels.

This update from September outlines the FTC’s enforcement policy on U.S.-origin claims and analyzes recent actions challenging such false or misleading claims. Read the full Update here.

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 and durability, associating it with the U.S. military, and identifying its components as made in the United States.

NAD recommended, among other things, that Telebrands discontinue its claims that the Atomic Beam is “40 times brighter” and more durable than ordinary flashlights and provides features (such as strobe or zoom) that ordinary flashlights do not provide because the company did not submit evidence showing a superior brightness over such “ordinary” or “regular” flashlights or that the “tactical” features of its flashlights were not available on other flashlights.

In response to the challenge from Energizer Brands LLC alleging that the advertising also created the false impression that the Atomic Beam was endorsed by or associated with the U.S. military, Telebrands changed the name of the product to “Atomic Beam” from “Atomic Beam USA” and removed a statement in a commercial that the Atomic Beam uses “U.S. Special Forces Tactical Technology” while displayed with an action shot of military commandos.

NAD also recommended that the company discontinue its claim that the “critical components” in the flashlights are “made right here in the USA” but confirmed that the company could make truthful and qualified claims that specific parts are made in the United States.

See NAD’s press release for more information about these and other claims about the Atomic Beam flashlight.