ASA Decision Regarding Use Of Filters In Social Media Advertising

Recently the Advertising Standards Authority for Ireland (“ASA”) issued a decision regarding paid influencers’ use of post-production techniques (such as in-camera filters or Photoshop) that embellish an advertised product’s effectiveness or appearance (with or without the intention to do so).   The decision has broad reach to domestic advertisers, as it highlights certain tenets of U.S. advertising law.

In the case, blogger Rosie Connolly promoted Rimmel Foundation by posting a photo of herself using the make-up on social media.  The photo was filtered and altered via Photoshop and included statements about Rimmel Foundation’s effectiveness, such as, “ultra-light and flawless coverage” and “stunning finish”.  The complaint stated that people may purchase Rimmel Foundation based on Ms. Connolly’s posts, thinking they would achieve the same results if they use the product.  However, since the images were altered, this would likely not be the case.

The ASA upheld the complaint, holding that the use of post-production techniques that exaggerate the effects of an advertised product could mislead consumers.  The Federal Trade Commission’s guidelines on endorsement and testimonials already prohibit influencers from making claims about products that the advertiser could not make itself.

What does this mean for advertisers? Based on this ASA decision and existing guidance in the U.S., advertisers should likely prohibit use of filters and other post-production techniques if the use of those techniques could impact a viewer’s understanding of how a product or service will work.

The New CA Consumer Privacy Act: Don’t Panic (Yet)

California has pushed through an online privacy law that is sending some shockwaves through the Internet economy. On Thursday, June 29, the legislature passed the California Consumer Privacy Act of 2018 (“CCPA”), which the Governor signed swiftly. Beginning January 1, 2020, many companies that do business in California will need to make significant changes and provide consumers, including minors, significantly more control of their personal information.

While the CCPA is in many ways a game-changer in the U.S., it is fair to anticipate that it will evolve some before the implementation date. Companies with concerns should consider how to participate in the legislative process, as California will likely amend the statute and now is the time to think through where clarifications or changes may be needed. It is also possible that there will now be a stronger push for federal legislation. Otherwise, we may see piece-meal, perhaps conflicting, state by state regulation for which it will be burdensome and potentially impossible for businesses to comply.

At its core, the CCPA gives residents of California the right to know what personal information a business is collecting, the right to access that information and request deletion (with certain important exceptions), the right to know whether their information is sold, shared or disclosed (and to generally to whom), the right to opt-out of the sale of their personal information (or the right to opt-in for users younger than age 16), and the right to receive the same service at the same price, even if they exercise their privacy rights, although certain financial incentives are acceptable. CCPA also provides a private right of action in the event of a breach or unauthorized access to personal information.

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Major U.S. Supreme Court Decision Allows States to Charge Sales Tax for Online Purchases

Yesterday the United States Supreme Court overruled decades of legal precedent governing taxation for online purchases. The decision, South Dakota v. Wayfair, Inc., No. 17-494 (June 21, 2018) changes the national standard on when an online business must collect and remit taxes under the states’ respective tax laws. Specifically, the Court ruled that an out-of-state seller’s “physical presence” is not necessary for the state to compel the company to collect and remit its sales tax, overruling prior cases on the matter (Quill Corp. v. North Dakota By and Through Heitkamp and National Bellas Hess, Inc. v. Department of Revenue of State of Ill.)

In a typical retail transaction, states tax the retail sale of goods and services within their state. The sellers are generally required to collect and remit the sales tax to the state, but when they do not, the in-state customers must pay a “use tax” at the same rate (consumer compliance rates are “notoriously low” which can cause states to lose billions). This model did not previously apply to businesses operated entirely out-of-state, without any physical presence, such as an office, warehouse, or any employees.

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InfoLawGroup LLP Continues to Grow Firm with Addition of Two Lawyers

Chicago, June 18, 2018—InfoLawGroup LLP is pleased to announce that it has hired Sara Chubb as senior counsel. Ms. Chubb joins InfoLawGroup from Winston & Strawn. She will be based in Chicago.

Ms. Chubb focuses her practice on advertising, marketing, privacy and intellectual property law. She has represented top brands across a variety of industries, handling a range of matters, including advertising clearance, marketing to children, sweepstakes and contests, licensing, sponsorship, social media, trademark and copyright issues.

In her privacy practice, Ms. Chubb helps clients build privacy into their new products, drafts privacy policies and advises on data security regulation compliance, among other matters. Continue Reading

The First Data Broker Law

Vermont is the first state to enact a law that will regulate data brokers that aggregate and sell data about consumers. The driving impetus of the legislation is to provide consumers with more information about the collection of their data and to protect consumers from data theft.

Vermont made a point of distinguishing data brokers from other types of businesses that collect information about their customers and that distinction hinges on having a direct relationship with the consumer. “Data broker means a business, or unit or units of a business, separately or together, that knowingly collects and sells or licenses to third parties the brokered personal information of a consumer with whom the business does not have a direct relationship,” according to the legislation.

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The FTC’s advice for online giving portals that collect on behalf of charities

Seventy-eight percent of Americans believe companies must do more than just make money – they must also positively impact society, according to the recent 2018 Cone/Porter Novelli Purpose Study. Not only did 79% of respondents say that they are more loyal to purpose-driven companies, but 73% said they would be willing to defend those companies. As for-profit businesses continue to find ways to demonstrate their positive social impact, one recent trend is by teaming up with online giving portals. Businesses such as online retailers and crowdfunding sites (like GoFundMe) are increasingly directing consumers to online giving portals that offer lists of charities to which consumers can donate.

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Dropbox Settles Autorenewal Lawsuit

[Updated May 23, 2018]

File-sharing powerhouse Dropbox has agreed to pay $1.7M to settle claims brought against it by the District Attorneys of Alameda, San Diego, San Francisco and Sonoma Counties.  The regulators alleged that Dropbox violated California’s law on automatic renewals by failing to properly disclose the terms associated with its autorenewing Dropbox Pro subscriptions and by failing to get consumers’ affirmative consent to those terms. For its part, Dropbox issued the following statement through a spokesperson: “We believe that our policies have been fair, transparent, and in compliance with applicable law, but we’re pleased to have resolved this matter. Being worthy of trust is a core value of Dropbox and we’ll continue striving to earn and maintain the trust of our users.”  Continue Reading

Brands Are Creating Virtual Influencers, Which Could Make the Kardashians a Thing of the Past

But brands could face legal troubles along the way

We all know that spokespeople and endorsers can be erratic. Wild antics can generate negative PR and damage brands. What if you could eliminate the threat of a spokesperson going rogue while still tapping into the massive influencer audiences? Although swapping the Kardashians for virtual influencers might sound like a dream come true, the reality is that virtual influencers and their creators bring their own set of PR and legal challenges.

Meet Shudu Gram and Miquela Sousa. Shudu is billed as the world’s first digital supermodel while Miquela, also known as Lil Miquela, is a virtual influencer. As unreal as Max Headroom, they are merely online personas fashioned out of the imaginations of artists. Shudu was invented by a photographer, and Miquela’s creators are cloaked in secrecy.

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Chambers Global and USA 2018 Recognize InfoLawGroup; InfoLawGroup Partners

Chamber Global and Chambers USA 2018 have released their new rankings and InfoLawGroup is once again recognized for Media and Entertainment in Illinois, with two of our partners, Justine Gottshall and Jamie Rubin, being highlighted. Ms. Gottshall was also ranked nationally by Chambers Global and USA for privacy. We, of course, want to thank our clients for the positive feedback received.

Per Chambers Global and USA, our team is lauded for being “an innovative boutique firm dedicated to resolving cutting-edge media, entertainment and technology issues on behalf of content producers, distributors, marketers and third-party platforms. Also well versed in privacy and cybersecurity.”

Clients told Chambers Global:

  • The firm is “very practical and accessible. The team understands business issues and doesn’t over-lawyer matters. They evaluate risks in an efficient manner.”
  • The lawyers are “very accessible” and “they know the answers when you ask.”

And when describing specific InfoLawGroup lawyers, clients told Chambers Global:

  • “Justine made an effort to understand the nuances of our business.” Another interviewee said: “She is proactive and raises issues in ways that allow us to address them before they become a problem.”
  • Ms. Gottshall’s knowledge of privacy issues is “completely up to date. “You can take the most obscure questions to her because she is a walking encyclopedia.”
  • Mr. Rubin “understands the business and gives us practical advice.”
    Clients also said that Mr. Rubin “helps us understand how to move forward and find solutions. He is well versed on content creation and distribution issues across different areas, including digital, film, TV and live entertainment.”

“He is always helpful, regardless of whether it is a complicated issue or a quick question,” says a client. Justine Gottshall is “known for her privacy work,” say market sources. She also handles data security and technology matters, as well as advertising issues.

About Chambers Global 2018
Chambers Global covers over 190 countries across the world and also includes Region-wide and Global-wide sections. Each jurisdiction features one or more practice areas. It ranks leading law firm networks around the world, by region and practice area. Chambers Global is published annually in February. In addition, information, such as mergers or lawyer moves, is kept up-to-date on the website throughout the year.

About Chambers USA 2018

Chambers USA covers all the states in the USA. Law firms that have a national presence are also ranked in our Nationwide tables (which focus on those firms that are the country’s best in their respective areas of practice). In every state we rank the leading law firms in at least four areas of law: Corporate / Commercial, Labor & Employment, Litigation, and Real Estate. In most states we cover more than four areas of law, so that the guide overall covers 45 different practice areas on a state and national level. Rankings at state-level are based upon the location in which a firm or lawyer practices regardless of where the clients, deals, and cases take place.


The SEC’s New Cybersecurity Guidance Is More Significant Than You Might Think

In the wake of increasing major cyber security incidents—such as the recent Equifax data breach that affected about 140 million U.S. consumers— the Securities and Exchange Commission (SEC) issued its interpretive guidance on cybersecurity disclosures in late February. The guidance was highly anticipated within the business community, which had expected it to affirm and expand the cybersecurity disclosure guidance the staff of the SEC’s Division of Corporate Finance issued in 2011. Almost immediately, however, the guidance slammed into a buzz saw of criticism from the media for failing to institute any major changes the original guidance.

But what it lacks in expansion, it makes up for in affirmation. When rules and guidance such as these are staff-generated, there is a perception that SEC commissioners aren’t bound by those recommendations. With this guidance, the commissioners have now endorsed what the Division of Corporate Finance staff established seven years ago—giving it a sense of permanence.

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