Last Thursday, the Federal Trade Commission (the "FTC" or "Commission") announced that it had settled its lawsuit against Mr. Avrom Lasarow in connection with a number of allegedly deceptive mobile apps. Mr. Lasarow's "Mole Detective" apps purported to detect the skin cancer melanoma in moles on users' skin.
What can app providers learn from this regulatory ordeal?
Allegedly Deceptive Mobile Apps and FTC Lawsuit
Purchasers of the Mole Detective apps were instructed to use the cameras on their mobile devices for purposes of melanoma risk assessment. According to the FTC's complaint, the allegedly deceptive mobile apps used a mathematical algorithm to measure specific mole characteristics from the captured digital images, such as asymmetry, border, color, diameter and evolution.
Mr. Lasarow allegedly advertised the Mole Detective apps through print, social media and other Internet marketing channels, claiming that the Mole Detective apps could detect melanoma early and, therefore, increase consumers' chances of survival. The Mole Detective apps were sold on Apple's App Store and the Google Play Store for $4.99 each. In 2012 and 2013 alone, U.S. sales exceeded $50,000.
In February of this year, the Commission filed suit against Mr. Lasarow – as well as his company and third-party marketers – in federal district court in Chicago. The complaint alleged that the defendants' claims of mole analysis and skin cancer detection were false, misleading and unsubstantiated, in violation of the FTC's deceptive marketing regulations.
App Provider Settles FTC Lawsuit
On August 13, 2015, the Commission announced that Mr. Lasarow had agreed to settle the FTC lawsuit. Under the terms of the settlement, he is now forbidden from making any misleading or unsubstantiated claims about the health benefits or efficacy of any product or service, through mobile apps or otherwise.
Additionally, Mr. Lasarow has agreed to pay $58,623.42 to the Commission to redress consumer injuries if certain financial statements, declarations and other documents that he submitted to the FTC are found to be untrue, inaccurate or incomplete.
Mobile Marketers: Apps Must Comply with Federal Regulations
As evidenced by this lawsuit, the FTC continues to take legal action against mobile marketers for claims made in connection with their product/service advertising. As apps and other mobile-based marketing strategies continue to grow in popularity, so does federal regulation of such channels.
If you are an app provider, a marketer of such software, or if you have been served with legal process relating to your marketing practices, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.
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