Ad Law Insights - Legal and Regulatory Updates
Latest FTC and state attorneys general compliance, investigation and enforcement developments of concern to advertisers and marketers
On May 23, 2023, the Federal Trade Commission hosted a national workshop designed to consider the current state of recycling practices and recycling-related advertising.
This follows an FTC announcement in December 2022 that the agency was seeking public comment on potential updates and changes to its ‘Green Guides’ for the use of environment marketing claims. The Green Guides help marketers avoid making environmental marketing claims that are unfair or deceptive under Section 5 of the FTC Act.
Updates to ‘Green Guides’
In December 2022, the FTC announced that it would seek public comment on potential updates to its “Green Guides” for the use of environmental marketing claims. FTC attorneys seek to update the Green Guides based on increasing consumer interest in buying environmentally friendly products. The comment period was extended through April 24, 2023.
“Consumers are increasingly conscious of how the products they buy affect the environment, and depend on marketers’ environmental claims to be truthful,” said FTC lawyer and Bureau of Consumer Protection Director Samuel Levine. “We look forward to this review process, and will make any updates necessary to ensure the Green Guides provide current, accurate information about consumer perception of environmental benefit claims. This will both help marketers make truthful claims and consumers find the products they seek.”
The Green Guides were first issued in 1992 and were revised in 1996, 1998, and 2012. They provide guidance on environmental marketing claims, including how consumers are likely to interpret particular claims and how marketers can substantiate these environmental claims to avoid deceiving consumers.
The Florida Telephone Solicitation Act (“FTSA”) has long been criticized for numerous reasons, including an overly broad and vague autodialer definition. Florida’s Governor recently signed HB 761, which makes significant, telemarketer friendly changes, to the FTSA (Fla. Stat. § 501.059).
Fewer Types of Telemarketing Equipment Covered
The amendments narrow the types of telemarketing equipment covered by the statute.
For example, prior the the amendments, autodialing restrictions applied to “automated system[s] for the selection or dialing of telephone numbers.” Now, the amended autodialing restrictions apply only to “automated system[s] for the selection and dialing of telephone numbers.” The foregoing effectively eliminates the legal argument that a dialing or texting platform falls under the statute even if the calling party manually selects or dials a telephone number to be called or texted.
Caveat, the amended version of the statutes continues to restrict “the playing of a recorded message when a connection is completed to a number called, or the transmission of a prerecorded voicemail.”
Text Message Notice and Cure Period
The revised statute provides for a fifteen (15) day notice and cure period before a plaintiff is permitted to initiate formal legal action. For example, by responding “STOP” to message.
Expanded Definition of “Signature”
The modified statute has a broadened definition of “signature” and includes “checking a box” and “responding affirmatively to receiving text messages.” Digital signatures may be acceptable to obtain prior express written consent provided that “such form of signature is recognized as a valid signature under applicable federal law or state contract law.”
Florida Telephone Solicitation Act class action cases that are not certified prior to the effective date of the statutory amendments are subject to the retroactive application of the new legislation.
FTC issues policy statement addressing emerging technologies that might harm consumers and violate the FTC Act.
On May 18, 2023, the Federal Trade Commission issued a warning that the increasing use of consumers’ biometric information and related technologies, including those powered by machine learning, raises significant consumer privacy and data security concerns and the potential for bias and discrimination.
Biometric information refers to data that depict or describe physical, biological, or behavioral traits, characteristics, or measurements of or relating to an identified or identifiable person’s body.
“In recent years, biometric surveillance has grown more sophisticated and pervasive, posing new threats to privacy and civil rights,” said FTC lawyer Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s policy statement makes clear that companies must comply with the law regardless of the technology they are using.”
In a policy statement, the Commission said the agency is committed to combatting unfair or deceptive acts and practices related to the collection and use of consumers’ biometric information and the marketing and use of biometric information technologies.
Recent years have seen a proliferation of biometric information technologies. For instance, facial, iris, or fingerprint recognition technologies collect and process biometric information to identify individuals. Other biometric information technologies use or claim to use biometric information in order to determine characteristics of individuals, ranging from the individuals’ age, gender, or race to the individuals’ personality traits, aptitudes, or demeanor.
As previously blogged about here, the FCC recently proposed a rule that would turn the lead generation on its head. The proposed new rule goes quite a bit further than simply requiring wireless carriers to block texts from illegitimate numbers.
In addition to carrier investigation and blocking obligations, as well as an extension of DNC protections to text messages, the FCC proposes:
“…to ban the practice of obtaining a single consumer consent as grounds for delivering calls and text messages from multiple marketers on subjects beyond the scope of the original consent.”
In an illustration of the issue, Company A describes a website that purports to enable consumers to comparison shop for insurance. The website sought consumer consent for calls and texts from insurance companies and other various entities, including Company A’s ‘partner companies.’ The ‘partner companies’ were listed in a hyperlink on the web page (i.e., they were not displayed on the website without clicking on the link) and the list of ‘partner companies’ included both insurance companies and other entities that did not appear to be related to insurance.”
Public Knowledge, an influential non-profit Washington, D.C.-based public interest group argues that lead generators and data brokers use hyperlinked lists to harvest consumer telephone numbers and consent agreements on a website and pass that information to telemarketers and scam callers. Commentors have argued that the telemarketer that obtains the consumer’s contact information from the lead generator may believe that it has the consumer’s prior express consent,
On May 3, 2023, the FTC announced that it is proposing a blanket prohibition preventing Facebook from monetizing youth data. The Commission alleges that the company violated the 2020 privacy order and now proposes new protections for children and teens.
The Federal Trade Commission proposed changes to the agency’s 2020 privacy order with Facebook after alleging that the company has failed to fully comply with the order, misled parents about their ability to control with whom their children communicated through its Messenger Kids app, and misrepresented the access it provided some app developers to private user data.
“Facebook has repeatedly violated its privacy promises,” said FTC lawyer Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The company’s recklessness has put young users at risk, and Facebook needs to answer for its failures.”
As part of the proposed changes, Meta, which changed its name from Facebook in October 2021, would be prohibited from profiting from data it collects, including through its virtual reality products, from users under the age of 18.
The company would also be subject to other expanded limitations, including in its use of facial recognition technology, and required to provide additional protections for users.
This marks the third time the agency has taken action against Facebook for allegedly failing to protect users’ privacy.
The Commission first filed a complaint against Facebook in 2011, and secured an order in 2012 barring the company from misrepresenting its privacy practices.
About This Blog and Hinch Newman’s Advertising + Marketing Practice
Hinch Newman LLP’s advertising and marketing practice includes successfully resolving some of the highest-profile Federal Trade Commission (FTC) and state attorneys general digital advertising and telemarketing investigations and enforcement actions. The firm possesses superior knowledge and deep legal experience in the areas of advertising, marketing, lead generation, promotions, e-commerce, privacy and intellectual property law. Through these advertising and marketing law updates, Hinch Newman provides commentary, news and analysis on issues and trends concerning developments of interest to digital marketers, including FTC and state attorneys general advertising compliance, civil investigative demands (CIDs), and administrative/judicial process. This blog is sponsored by Hinch Newman LLP.