A U.S. District Court signaled that deterrence was a significant factor in awarding treble damages in a Telephone Consumer Protection Act (“TCPA“) lawsuit. The United States District Court for the Middle District of North Carolina Judge Catherine C. Eagles (the “Court“) denied to reduce or set aside a $61 million judgment against Dish Network LLC (“Dish“) for violating the TCPA. Businesses should pay attention to this case because TCPA lawsuits are attractive to class action plaintiffs’ counsel due to the statutory damages, $500 per violation (that is per call/text) or up to triple the amount for “willful or knowing” violations – which could mean a whopping $1,500 per violation. The TCPA statute leaves it up to the court to decide what is a knowing or willful, so any time a court finds a knowing or willful violation it could make it easier for other plaintiffs to get large awards. Continue Reading
We all know that food and beverage companies cannot expressly lie to consumers about the ingredients in their products. But what about implying that a certain ingredient is included in the product; one that is known to have some health benefits? In a recent class action lawsuit alleging that Dr. Pepper Snapple Group Inc. falsely advertised that Canada Dry ginger ale contains actual ginger root, the United States District Court for the Northern District of California permitted the lawsuit to proceed by denying Dr. Pepper’s motion to dismiss.
In Jackie Fitzhenry-Russell et al,, plaintiffs claimed that they were the victims of fraud by relying upon the phrase “Made From Real Ginger” on cans of Canada Dry, in addition to its advertising making similar statements and visual implications. Whether Canada Dry actually contains ginger root is important because, according to plaintiffs, a reason they bought and drank Canada Dry was the well-known health benefits of consuming ginger root.
The Federal Trade Commission (FTC) has indicated that operators of child-directed online services may permissibly offer voice search and similar features without first obtaining parental consent under the Children’s Online Privacy Protection Act (COPPA), provided that certain requirements are satisfied. In an “Enforcement Policy Statement” on COPPA released today, the FTC clarified that – while there is no pertinent exception to the requirements of its COPPA Rule – it would not bring an enforcement against an operator based on collection of an audio recording that captures a child’s voice where:
- the recording is collected “solely as a replacement for written words” (e.g., voice search or verbal instructions);
- the recording is maintained only long enough to complete that purpose and then is immediately deleted;
- the operator does not use the voice recording for any other purpose prior to deletion (e.g., user identification through voice recognition); and
- the operator does not use voice features to request information that would itself be considered “personal information” under COPPA (e.g., no names, email address, etc.).
This is obviously helpful news, particularly for those who operate child-directed services on platforms where voice search is becoming de rigueur. However, those considering relying on this policy statement should be careful to ensure that they not only comply with the FTC’s requirements at the outset, but that they have in place monitoring procedures to confirm continued compliance going forward.
The Long Reach of the GDPR
This is a wake-up call for those who think the new EU General Data Protection Regulation (GDPR), which will be enforced starting in May 2018, is not a serious compliance issue outside Europe. Here’s why you should care:
- Your European partners, affiliates, or customers will have to ensure that you respect the stricter requirements of the GDPR in handling any personal data they share with you.
- The GDPR expands the territorial scope of Europe’s privacy laws: it applies directly to processing in support of activities in Europe, as well as to the offering of goods or services to European residents and “monitoring” their behavior, even from outside the EU.
- The GDPR imposes new obligations and potential liabilities for processors as well as controllers. You need to be aware of those responsibilities even if you feel confident that you will always be characterized as a “mere processor” following the instructions of a European controller.
Join InfoLawGroup Partner Justine Young Gottshall at the IAPP Privacy Security Risk Conference 2017 in San Diego, CA. Justine will be speaking on Tuesday, October 17, 2017 during the session titled Let’s Build It: Practical Advice For Building Your Privacy Program, which will provide insight into creating, maintaining and updating an internal privacy compliance program.
Join Jamie Rubin for the 2017 ANA/BAA Marketing Law Conference, November 13-15, 2017 at the Marriott Chicago Downtown Mag Mile. Mr. Rubin will moderate a panel titled Metrics & Monitoring Efficiencies and the Performance of Social/Digital Media Advertising. Hear about how the Media Rating Council (MRC) measures and audits online ads, the 3MS initiative started by the IAB, ANA and 4A’s and other business and legal issues effecting the ad measurement space, including measuring outcomes (sales increase) vs. metrics (ad on screen for X seconds), filtering for bots, spiders and fraud, platform measurement tools vs. third party measurement services and associated privacy concerns.
InfoLawGroup partner Justine Young Gottshall on IoT Privacy Compliance Best Practices in the September issue of Risk Management Magazine: 5 Best Practices for IoT Privacy Compliance.
According to a January 2017 forecast from Gartner, 8.4 billion internet of things items will be in use worldwide this year—a 31% increase from 2016—to the tune of almost $2 trillion in annual spending on devices and services. As companies create these interactive items, most of which can track consumers, the Federal Trade Commission (FTC)—the government agency with primary responsibility for protecting the privacy and security of consumer data—is watching.
In a recent report, the FTC cited “enabling unauthorized access and misuse of personal information” as its top area of concern regarding the internet of things. Not long before the FTC issued its June 2017 IoT analysis, consumer electronics company Vizio found out first-hand about the commission’s regulatory priorities. In February, Vizio settled a complaint by the FTC and New Jersey attorney general’s office claiming it had installed software on about 11 million smart TVs and used it to secretly track customers’ detailed viewing habits from 2014 to 2016. The complaint alleges that Vizio then linked that data with specific household demographics and sold the information to third-party marketers—all without customers’ consent. Vizio ultimately had to destroy all the data collected during that time and pay $2.2 million to settle the suit.
REMINDER: Our “Cocktails and Learn!” Event is on Wednesday, September 27, 2017 from 5:30-7:30 PM in Chicago. Tyler Hattery, Creative Strategist at Facebook, has an exciting presentation for us on social media feeds and the speed at which people digest them. PLEASE JOIN US!
The event is on the 2nd Floor of the Hyatt Place Chicago/Downtown the Loop (28 N. Franklin Street, Chicago) in the Madison/Franklin conference room. Beverages and light-fare food will be served.
Join Justine Young Gottshall for the 2017 Privacy + Security Forum, October 4-6, 2017 at the George Washington University Marvin Center. Ms. Gottshall will speak on What’s New In Online Advertising? IoT, Addressable TVs and Beyond. The discussion will cover the recent developments in targeting, advertising and profiling.
Last week was a busy one for the Federal Trade Commission. On Thursday, the FTC gave notice that it is still very much focused on influencers and whether they are properly disclosing any material connections that they may have to a product or brand. As InfoLawGroup’s Benjamin Stein noted, the FTC issued revised FAQ’s to its Endorsement Guidelines which provide additional information and context on how and when influencer disclosures need to be made. In addition to the updated FAQ’s, the FTC also announced two other important items related to influencers.
First, the Commission noted its first law enforcement action against individual influencers for failure to disclose their connections to a product or service. Additionally, the Commission announced that it has sent follow up letters to a number of the social media influencers who it had sent initial letters to previously in its Instagram sweep earlier this year.
In its first ever influencer complaint, the FTC pursued Trevor Martin and Thomas Cassell for allegedly deceptively endorsing the online gambling site CSGOLotto.com (“CSGO”) without disclosing that they owned the company.
According to the FTC, both Martin and Cassell posted a number of videos about the site which touted how cool the site was and how easy it was to win and make money on it, without disclosing the fact the fact they owned the company. Some of their videos received more than 5 million views.
The complaint also indicted that Martin and Cassell allegedly ran their own influencer program for the site and paid gamers to post on social media about their experiences with the site. According to the FTC, the contracts with those influencers specified that they could not make statements that would reflect negatively on CSGO.
Martin and Cassell agreed to settle the matter with the FTC. The proposed settlement requires Cassell, Martin, and CSGO to make disclosures clearly and conspicuously in the future.
In the other influencer news item of the week, the FTC announced that it had sent follow up warning letters to 21 of the influencers that it had sent letters to earlier this year, asking the recipients to confirm whether they do in fact have material connections to the brands or products the identified social media posts, and if they do, to spell out the specific steps they will be taking to clearly disclose their material connections to those brands and products. A sample of the new warning letter can be found here.
You may recall that earlier this year, the FTC announced that it had sent out what it termed as “educational letters” to approximately 90 Instagram influencers and brands, reminding them of their obligations to clearly and conspicuously disclose any material connections to any products or brands that they are posting about and providing them with examples of disclosures that the FTC did not feel were accurate.
The original round of letters canvassed a wide variety of influencers, from very well-known celebrities like Jennifer Lopez and Sean Combs to a number of “niche” personalities and reality tv stars. The list also included certain international influencers based outside of the U.S. The brands featured in the initial round of letters were diverse as well, with national retailers, quick service restaurants, specialty apparel, footwear, food and consumables and a number of health and beauty products all being included.
The initial letters provided a number of specific examples of disclosures which the FTC felt were not sufficient. The commission noted that disclosures like #sp”, #thanks” or “#partner” were inadequate and even noted that “#ad” is likely to be insufficient if it is intermixed with a number of other hashtags or if it is buried at the bottom of a long post. The newly revised Endorsement Guide FAQ’s outline many of the same disclosure examples that were outlined in the letters. If you are curious on the full list of brands and influencers who received the initial educational letters, copies can be found here.
While we do not yet know the identities of the 21 influencers who received the letters, it will be interesting to see what happens next and how (or if) the influencers respond. In any event, it is clear that the FTC is sending a clear message that influencers are an enforcement priority right now so if you are an influencer or if you do any work with influencers (someone having “Influence Over Influencers” as the FTC would phrase it) make sure that clear and conspicuous disclosure of material connections is at the forefront of your planning. Now would also be a good time to check your forms of agreement that you use when hiring an influencer to make sure that don’t have statements that prohibit the influencer from providing their honest opinions about the product or brands. We would be happy to assist you with that review or help answer any other questions you may have.
Still don’t believe the FTC is serious about influencers? Maybe this video message from acting FTC Chairman Maureen Ohlhausen about the importance of the FTC’s influencer actions will convince you.