Update on the FTC

Masters of Advertising Law Conference attendees: Scroll down for CLE materials

During the ANA's 2022 Masters of Law Conference, a panel of veteran lawyers convened to review recent developments at the FTC.

Key Takeaways

The panel offered updates on a variety of topics.

Rulemaking and enforcement: The FTC is engaging in more rulemaking than in the recent past, though this siphons resources away from enforcement. What enforcement the organization has been doing has focused more intensely on big brands than normal, as opposed to concentrating on fraudsters.

Monetary penalties: The FTC's ability to subject violating organizations to monetary penalties was not altogether ended by the Supreme Court case of AMG Capital Management, LLC v. FTC, which struck down the organization's ability to seek monetary relief for restitution or disgorgement based on section 13(b) of the Federal Trade Commission Act. The FTC continues to capitalize on other statutes and powers based on section 19 of the FTC Act to do so.

Individual liability: The FTC continues to not only hold organizations accountable, but also individuals working for those organizations. This type of enforcement tends to concentrate on officers leading smaller organizations, where they can be more directly tied to offending practices.

Dark patterns: Though the FTC has disapproved of these tactics in press releases before, it recently for the first time defined them in a consent order, albeit in abstract terms. It described such tactics as an interface that impedes consumers' selection of preference, manipulates consumers, or otherwise subverts consumer choice. The panel fleshed out this definition with several examples, including:

  • Disclosures in tiny print
  • Adding unselected items to an online shopping cart
  • Discreetly adding fees to an online order that only appear at the checkout phase
  • Subscription plans from which it is especially difficult to extricate oneself

Action Steps

  • Check to see if your organization is under an FTC order. These can last decades. For instance, The FTC issued Unilever an order in the 1990s in response to misleading claims about Vaseline's antibacterial properties, and that order didn't expire until 2019.
  • Consider taking issues with competitors to the NAD as opposed to the FTC, though it can require more upfront work.
  • Post all relevant reviews for your product on your site if you are going to post any at all. The FTC forbids the cherry-picking of only positive reviews, regarding that practice as deceptive. Also, disclose all incentives, even free samples, offered in exchange for reviews and testimonials.
  • Train your agencies on the brand's expectations for making disclosures; it's not sufficient to just train your organization's own marketers.
  • Attend the open monthly FTC meetings that the organization streams online.

CLE Materials

Source

"Update on the FTC." Amy Mudge, co-lead, advertising, marketing and digital media practice at BakerHostetler; Mary K. Engle, EVP, policy at BBB National Programs; Randy Shaheen, partner at BakerHostetler; Kathryn Farrara, general counsel, beauty and wellbeing at North America Unilever. 2022 ANA Masters of Advertising Law Conference, 11/8/22.

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