Key Priorities for 2024
Issues to consider in allocating your budget
As you are considering how to allocate your 2024 budget for legal and compliance matters, regulators and others have signaled that there are some key privacy and advertising issues to be sure to get right this coming year. To help you on this front, we asked our team “What is one legal issue (or to do item) for organizations to prioritize in 2024?” Here are their answers:
AI transparency (from Dave Radmore): AI will continue to be a hot button item, and a contentious one at that, with more high-profile lawsuits like the New York Times suing Microsoft and ChatGPT sure to arise, and more government regulation on the horizon. In this atmosphere, those using or seeking to use AI should make sure that they are transparent with their customers (and employees!) about how they are using AI in their business.
AI assessment and strategy (from Rosanne Yang): In addition to transparency, a key 2024 priority for businesses should be to develop a risk based assessment of AI tools that their employees and contractors are asking to use (see this post on steps to do now). They should understand when and to what extent the risks are acceptable to their business, and when and to what extent they are not, taking into account not only data privacy and security issues, but also IP (primarily copyrights and trade secrets).
International AI regulation (from Max Landaw): AI will be a huge point of enforceability and legislation in 2024. Aside from companies like ChatGPT whose business model is based around a large collection of data for machine learning models, for most companies, the key to AI will be preparation for future enforceability. The final text of the European Union’s AI Act will be released in 2024 with full implementation to be in place by 2026. The countries of the world may view the AI Act as the benchmark by which to draft their own AI legislation, which would make the AI Act analogous to GDPR in its international influence.
Operationalizing compliance (from Justine Young Gottshall): We will continue to see an increase in laws and regulation, on the national, state/territory and local level. It is essential to create a compliance plan that takes into account the laws that apply to you, your business practices and key risks, and your internal culture, in order to create a workable, effective and efficient compliance program.
Consumer health data collection (from Dhara Shah): There is no slow down when it comes to US states that are passing comprehensive state privacy laws, and 2024 will bring forth considerable compliance measures for companies that handle consumer health data - including new privacy notices, authorizations, and rights. Companies should begin by determining whether they are collecting any consumer health data - with a reminder that consumer health data goes beyond the traditional understanding of health data that is otherwise subject to laws like HIPAA. Rather, companies may be collecting consumer health data through tracking technologies, when creating segments for online ads, or when engaging in keystroke monitoring.
Online advertising (from Tatyana Ruderman): Organizations will need to address existing and new challenges to online advertising strategy, including CA, CO, and other state requirements to recognize and respond to universal opt-out signals (e.g., Global Privacy Control, GPC), the ongoing threat of litigation around online tracking under various statutes (CIPA, VPPA, etc.) industry changes (e.g., Google beginning to phase out support for third-party cookies), and continued international regulation.
Dark patterns (from Jamie Rubin): Organizations will need to pay more attention to how they funnel customers and potential customers through online transactions in order to avoid user experiences that may be considered dark patterns. This is both an advertising law issue (think deceptive practices, getting appropriate consent to recurring charges, etc.) and a privacy issue, since the misleading or heavily manipulated collection of customer data can itself be a concerning dark pattern.
Advertising and labeling standards (from Mindy Abern): Re-examine what you say about your products and services. Both the FDA and the FTC are working on (potentially) updating some standards for terms that many companies use about their products and services every day, whether it be on packaging or advertisements. Updated standards often provide much needed clarity, which is helpful … but often bring new requirements that companies need to comply with.
“Green” and other environmental claims (from Sara Chubb): Enforcement around sustainability and other environmental and “green” claims will continue to be a focus for the FTC in 2024 as updates to its Green Guides remain forthcoming. Companies should closely examine environmental claims they make about their products, manufacturing processes and product life cycles, and company environmental goals across advertising, product packaging and corporate/investor materials to consider whether claims are properly qualified and adequately substantiated.
Endorsements and influencer marketing (from John Allaire): Enforcement around endorsements and influencer marketing will likely be a large priority for the FTC. In June, the FTC announced a finalized new version of its Endorsement Guides. Among other issues, the Guides now address incentivized reviews, employee reviews, and the possibility that consumers may have less expectation of material connections in certain forums like personal social media posts as opposed to ads on television. As consumers increasingly turn to social media and review platforms to guide their buying decisions, brands will have to make sure that they follow the FTC’s requirements to avoid potentially deceptive and misleading advertising.
Pricing and fees (from Ben Stein): Companies that charge any fee beyond the stated cost of their products/services - other than taxes, other government-mandated fees, or shipping costs for physical goods - should review how they advertise prices to ensure they are in line with California’s new law on hidden fees, which takes effect on July 1st, as well as proposed FTC rulemaking on this topic.
Sales frequency and reference pricing (from Eric Anderson ): The seeming resurgence of sale frequency/reference pricing cases against retailers, alleging fictitious discounts and markdowns. After a relatively quiet few years, Plaintiff’s Class Action counsel appear to be stirring the pot once again (see examples here and here).
Charitable activities (from Heather Nolan): How and what does your organization say publicly about its charitable activities and donations? If public action (like a purchase, donation, sweepstakes/promotion entry, or social media activity) influences its monetary donations, there may be expanded compliance steps needed, including under California’s new regulations.
Originally published by InfoLawGroup LLP. If you would like to receive regular emails from us, in which we share updates and our take on current legal news, please subscribe to InfoLawGroup’s Insights HERE.