United States: Advertising News And Analysis - March 14, 2013

Last Updated: March 25 2013
Article by Jeffrey D. Knowles

Edited by Jeffrey D. Knowles and Gary D. Hailey


FTC's .com Disclosures: New Media Still Subject to Old Rules

On March 12, The Federal Trade Commission (FTC) issued new guidance for digital advertisers and marketers titled ".com Disclosures: How to Make Effective Disclosures in Digital Advertising" intended to help mobile and other online advertisers make disclosures clear and conspicuous to avoid deception. The release of the revised ".com Disclosures" is the first update to the guidance since its original publication in 2000. The central point of the revised guides, write Venable partners Ellen T. Berge and Jonathan L. Pompanin a recent client alert, is that consumer protection laws apply equally to marketers across all mediums, whether delivered on a desktop computer, a mobile device, or more traditional media such as television, radio, or print.

The revisions include updated guidance that takes into account the increase in the use of small screens, social media, and mobile advertising. The guides also contain a number of mock ads that illustrate the updated principles.

Click here to read the full text of the client alert authored by Berge and Pompan.

Click here to read the full text of the revised .com Disclosures.

Paper, Plastic...or Mobile? FTC Issues Report on Mobile Payments

Earlier this month, the FTC issued a staff report titled "Paper, Plastic...or Mobile?: An FTC Workshop on Mobile Payments" addressing mobile payments, their effects on consumers, and potential areas of concern. The staff report follows a workshop held last year on the same issues.

The report discusses the benefits that mobile payments offer consumers but also expresses concern about dispute resolution, data security, and privacy issues affecting consumers, write Venable attorneys Amy R. Mudgeand Maggie T. Gracein a recent post to Venable's advertising law blog, www.allaboutadvertisinglaw.com.

The report urges companies to develop clear policies on resolving disputes over unauthorized and fraudulent charges, and to educate consumers about the same. It also identifies ways in which data can be kept secure, and encourages mobile payment providers to urge all companies in the mobile payment transaction chain to use strong security measures. Lastly, the report briefly discusses international mobile payment issues and highlights examples of governments and international organizations working on mobile payments-related consumer protection issues.

Click here to read the full text of the blog post by Mudge and Grace.

Click here to read the full text of the FTC's report.

Why So Negative on Negative Option?

Continuity marketing is a pervasive component of the American economy. Today, consumers can have regularly scheduled shipments of just about anything -- DVD rentals, bacon, black socks, even razorblades -- delivered to their doors. Despite the utility of continuity, or "negative option," programs, regulation of such programs has tightened at both the state and federal levels, write Venable partners Jeffrey D. Knowlesand Gary D. Haileyin the March 2013 edition of the DRMA Voice.

When it comes to continuity marketing, write Knowles and Hailey, an ounce of prevention beats a pound of cure. Although they note that regulations governing continuity marketing are evolving and vary widely from state to state, the pair outline best practices that can help marketers avoid many consumer complaints, chargebacks, and regulatory inquiries.

Click here to read the full text of their column.

Cy Pres Settlements: Giving Back Receives Increased Scrutiny

Much of what happens in the class action world is subject to a discretionary standard of review on appeal – including class certification and settlement decisions. Two recent appellate decisions on opposing ends of the discretionary spectrum illustrate that the discretionary standard of review still leaves plenty of room for a second opinion, writes Venable partner Thomas E. Gilbertsenin a recent post to Venable's advertising law blog, www.allaboutadvertisinglaw.com.

Both decisions focus on so-called cy pres awards, which have been a common solution to the question of what to do with undistributed funds after all the claim forms from a class action settlement have been paid. The cy pres award is essentially a donation of leftover settlement funds to a designated charitable organization.

Courts are increasingly wary about the use of cy pres awards in lieu of cash benefits paid directly to class members, so class action defendants must do more in support of these settlements when submitting them for court approval. Gilbertsen notes that class members dissatisfied with benefit levels and claim form processes are free to object or vote with their feet by opting out before the settlement goes live. However, he says, absent a challenge about the sufficiency of notice or claim form administration, objectors should not be allowed to challenge the sufficiency of benefits in hindsight.

Click here to read the full text of Gilbertsen's blog post on Venable's advertising law blog, www.allaboutadvertisinglaw.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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