Recent Bulletins

FTC CAUTIONS INFLUENCERS ABOUT POOR DISCLOSURE May 26th, 2017

May 26, 2017.  In an effort to remind influencers of their obligation to clearly and conspicuously disclose their relationships with advertisers, the FTC recently sent out over 90 letters to influencers and marketers. It marks the first time that the agency has contacted influencers directly. The FTC did not characterize the letters as warnings, but rather framed the messages as reminders of the obligation of marketers and the influencers they hire to properly disclose their connection.

Spurred on by complaints from watchdog groups such as Public Citizen, the FTC offered guidance to this select group of endorsers on how to effectively make the necessary disclosures of a material connection to a brand. A material connection is something that might affect the credibility of the endorsement such as the influencer’s receipt of payment or free product from an advertiser.

To make a disclosure clear and conspicuous in Instagram posts, the FTC specifically directed that the brand relationship should appear before the “more” button, in the first 3 lines of the post. The FTC noted this is because Instagram posts are primarily being viewed on mobile devices. In addition, where there are multiple tags or links, the FTC warns that disclosures buried in a string of hashtags are not likely to be effective and therefore not “conspicuous.”

A safe way to make the disclosure unambiguous? #Ad at the top of the post. Prior guidance from the FTC also reveals that #Sponsored would likely be sufficient to notify consumers of the nature of the post as an advertisement. In these most recent letters, the FTC notes in particular that “#sp,” “Thanks[BRAND],” and “partner” are inadequate disclosures because readers may not understand these mean a post is sponsored. While there is no one-size-fits-all way to make “clear and conspicuous” disclosures, unfamiliar and obscure abbreviations are certainly not going to do the trick.

Conspicuously branded posts may pose a bit of a challenge to agencies and advertisers who want to keep influencer content authentic and relevant. The goal should always be honest communication with consumers about paid endorsements. #fulldisclosure

The FTC letter can be found here: https://www.ftc.gov/news-events/press-releases/2017/04/ftc-staff-reminds-influencers-brands-clearly-disclose

FLG earns Female Business Enterprise certification September 9th, 2015

September 9, 2015.  We are happy to announce that Friedman Law Group has been certified by the State of Illinois as a Female Business Enterprise.

In addition to finalizing the efforts to earn this certification, the firm has also undertaken to expand its capabilities in the area of general business counseling and regulatory compliance, including franchise and retailing matters and IT contract negotiation. This expansion and the recent FBE certification underscores the firm’s commitment to regularly update its resources to help clients navigate a broad range of business and legal challenges in pursuit of their strategic goals.

A Reminder about Forgetting July 15th, 2015

July 15, 2015.   With Europe’s “right to be forgotten” in the news again,1 it’s a good time to remind clients that our domestic version became effective earlier this year. The California law, entitled “Privacy Rights for California Minors in the Digital World,” allows minors to delete content they’ve previously posted online, apparently assuming that adolescents lack the maturity to exercise good judgment in their online activities, but possess the insight to eventually realize this.

The “eraser button” law applies to a wide range of digital properties – Web sites, online services, online applications, and mobile applications – if they are intended to reach predominantly minors (defined as California residents under 18) or if there is actual knowledge that they are used by a minor.2

The operator of the site or application must permit minors who are registered users to remove, or request and obtain removal of, content posted by the minor. In addition, the operator must provide certain mandated notices.

There are a number of statutory exceptions to the erasure requirement. For example, operators don’t need to remove posts if the content has been anonymized or if the minor received consideration for the post. They also don’t need to remove content reposted or stored by third parties, even if originally posted by the minor.3

Some consumer groups are pushing for a more expansive right to be forgotten in the U.S.4 While the debate continues, we adults, unlike California teens, will have to make do without the do-over.

1. “French Regulator Orders Google To Extend ‘Right To Be Forgotten’ Worldwide”

2. In addition to the “eraser button” provisions, a less-publicized section of the law prohibits or limits operators from marketing or advertising certain products and services, including tobacco, alcohol, firearms, and tattoos.

3. Click here for the full text of the law, including all exceptions.

4. “Consumer Group Wants Government to make Google give Americans ‘Right to be Forgotten’ Online

Meet an FLG Pro Bono Client and Earn CLE May 12th, 2015

May 12, 2015. Friedman Law Group is pleased to announce that long-time pro bono client, Art Works Projects, will be featured in an upcoming Chicago Bar Association CLE program, “Prosecution of Sexual Violence Crimes & Human Trafficking.” The program will include excerpts from Art Works Projects’ in-progress documentary, THE PROSECUTORS, about lawyers in Columbia, the Democratic Republic of Congo, and Bosnia and Herzegovina who have dedicated and risked their lives to prosecute perpetrators of sexual violence in conflict. THE PROSECUTORS is a project of Kartemquin Films (Hoop Dreams, Life Itself) and portions of the film were recently screened at Kartemquin’s Spring Showcase at the Siskel Film Center.

AMANI KAHATWA, CONGOLESE LAWYER. PHOTO: FILM STILL FROM THE PROSECUTORS BY MICHAEL CHRISTOPHER BROWN

Leslie Thomas, executive director of Art Works Projects and director of the film, is speaking at the event, as are Michelle Nasser, Assistant U.S. Attorney for the Northern District of Illinois, and Juliet Sorensen, Clinical Associate Professor of Law, Center for International Human Rights, Northwestern University School of Law.

The program takes place on May 27, from 12:00PM to 1:30PM at the Chicago Bar Association, 321 South Plymouth Court, Chicago, and is also available via live Webcast. 1.25 MCLE credits are available. For more information about the event, or to register, please visit: http://www.chicagobar.org/source/Meetings/cMeetingFunctionDetail.cfm?section=Calendar&product_major=C19615&functionstartdisplayrow=1

Andrea E. Friedman Named Among Top 10 Women IP Lawyers in Illinois April 24th, 2015

Chicago (April 13, 2015) — Law Bulletin Publishing Company and its Leading Lawyers division today announced that Andrea E. Friedman of Friedman Law Group Ltd. was named by her peers one of the Top 10 Women Intellectual Property Lawyers in Illinois.

The honor, published in the most recent edition of Leading Lawyers Magazine, comes in her 11th year as a Leading Lawyer. The number of Leading Lawyers cannot exceed 5 percent of a state’s registered attorneys, making the peer-voted selection a rare distinction for practicing attorneys.

“Andrea Friedman is known throughout the practice and throughout the state as a top-notch professional in not only marketing law, but in such diverse fields as intellectual property, advertising, media, sports and arts law,” said Scott Anderson, director of Leading Lawyers and publisher of Leading Lawyers Magazine. “The fact her peers selected her one of the top 10 in her field is a recognition of that skill and reputation.”

Law Bulletin Publishing Company, through its Leading Lawyers division, conducted extensive statewide surveys of lawyers asking: “If you couldn’t take a case in your area of law, to whom would you refer a family member or friend?” Only those lawyers who were most often recommended by their peers in one of 100 areas of law and approved by the Leading Lawyers’ advisory board achieved the distinction of being a Leading Lawyer. Lawyers could not nominate themselves or any lawyers at their own firm. Also, the rigorous research methodology eliminated the possibility of lawyers being selected through a popularity contest.

It may be true, but is it available? March 6th, 2015

February 20, 2015. In a recent opinion regarding Comcast’s advertising for its “Extreme 505” high-speed Internet service, the NAD reaffirmed the precedent it set in a 2014 year end decision for AT&T high speed Internet service.
In the earlier AT&T case, the NAD evaluated AT&T’s promotion of its 45 Megabits per second speed claims. The NAD determined that AT&T had a reasonable basis for its claims regarding speed of service. The NAD also found that the speed “was achievable by an appreciable number of consumers under circumstances that are typically encountered.” That said, the NAD still advised AT&T to disclose in advertising that its service is “more unavailable than available.”
Following that precedent, in a January 2015 opinion, the NAD found that Comcast’s claims regarding its “Extreme 505” service speed were substantiated and that the service was available to an “appreciable number of households” in the areas where the service was marketed. That said, the NAD found that the service was more widely available in some of those markets than in others, and advised that Comcast make the disclosure “more unavailable than available” when advertising the service in markets where the service is not available to a majority of households.
You can view the NAD Press Releases on these two cases at:
Comcast: http://www.asrcreviews.org/2015/01/nad-examines-internet-speed-claims-finds-comcasts-monadic-speed-claim-supported-but-recommends-modification-to-better-disclose-limitations-of-service-recommends-discontinuation-of-comparati/

AT&T: http://www.asrcreviews.org/2014/11/nad-recommends-at-finds-advertiser-provided-reasonable-basis-for-speed/

FTC Consent Order Settles Charges that Company’s “Made in USA” Certification Deceived Consumers February 16th, 2015

February 16, 2015 In November, the Federal Trade Commission (FTC) issued a final consent order settling charges that an Ohio-based company, Made in the USA Brand, LLC, (the “Company”) deceived consumers by licensing its “Made in USA” certification mark for use on products without either verifying the accuracy of the “Made in USA” claims or disclosing to the public that some of those licensees had self-certified their product’s “Made in USA” status.

The Enforcement Policy of the FTC with respect to Made in USA claims requires that products using a claim of US origin be “all or virtually all” made in the United States. The Order prohibits the Company from making deceptive claims or providing companies that it certifies with the means to deceive consumers regarding any products’ claim of U.S. origin.

The Certification logo:  On its website and brochures, the Company claimed, “The Made in USA Brand Certification Mark provides a standard symbol for Made in USA product identification…. When printed on labels by accredited manufacturers, consumers are able to identify at a glance which products are made in the USA.”

Based on its investigation, the FTC found this statement to be false and misleading, alleging that, since 2009, the Company had:

  • Sold licenses to use its “Made in USA” certification mark through its website, for annual fees of $250 to $2,000 depending on licensee’s sales.
  • Granted licenses to use its certification mark to any company, product, or entity that paid the licensing fee and stated that its products met the standard for U.S. origin claims.
  • Never rejected a license application or terminated a license.
  • Falsely represented in its promotional materials that its customers’ products depicting its certification marks had been independently and objectively evaluated for compliance with U.S. origin claims.

As is typical in Consent Orders, the Company neither admitted nor denied the allegations in the Complaint.

The FTC Order requires that, going forward, the Company must either have competent and reliable evidence substantiating the Made in USA claim for every product that carries its certification mark, or, the Company’s certification mark, and its seal, logo, brand, and other promotional materials must clearly and prominently disclose that the Company’s customers may self-certify that their products meet Made in USA standards.

The revised logo on the Company’s website now looks like this:

Our thoughts: The FTC has come back to this point time and time again, always emphasizing that, as stated in this case, “As U.S.-origin claims become more material to some consumers, those consumers increasingly rely on seals and certification programs to confirm that such claims are credible.” It seems likely that FTC enforcement activity will remain robust for certification programs such as “Made in USA,” “green” and other areas of interest to today’s consumers. See our companion post on the recent FTC Order regarding the Trustee online privacy certification.

The Order demonstrates the importance of two FTC pillars: claims substantiation, and clear and prominent disclosure. In its Order, the FTC uses both pillars to craft a remedy to ensure the future credibility of certification marks used by Made in USA Brand, LLC and its licensees. Competent and reliable evidence is required to substantiate a Made in USA claim. But if the Company wishes to allow its licensees to self-certify their Made in USA status, the Order requires that the certification mark and all related promotional materials must clearly and prominently disclose that its licensees may self-certify their product’s compliance with the FTC’s Made in USA rules. At that point, presumably, the obligation of having competent and reliable evidence, shifts solely back to the licensee. We find it odd that the FTC did not impose a higher standard on the Company that it have at least a modicum of credible support that the licensee meets the Company’s standard for use of the Company’s logo. After all, of what value is a certification mark that has no standards that must be met?

Finally, it is surprising this case took so long to come to light. According to the FTC’s allegations, the Company’s seemingly brazen marketing activities began in 2009. It is a lesson to all that just because we haven’t heard about an FTC investigation/enforcement action in a certain area doesn’t mean the Agency is a sleeping dog on the topic.

Maine Eases Cause Marketing Regulation October 10th, 2013

October 10, 2013

Effective this month, Maine will no longer require commercial co-ventures (a/k/a cause marketers) to be licensed by the state’s Department of Professional and Financial Regulation, Office of Professional and Occupational Regulation (OPOR). Prior to amending its Charitable Solutions Act to repeal the provisions governing commercial co-ventures, Maine had one of the more burdensome state laws, requiring annual licensure and bonding of commercial co-ventures, as well as annual financial reporting. The Maine Statute had broadly defined commercial co-ventures as a commercial entity that “conducts a sale, performance, event or collection and sale of donated goods that is advertised in conjunction with the name of any charitable organization.”

In testimony supporting the elimination of licensing for commercial co-ventures, Anne Head, Director of OPOR and Commissioner of the Department of Professional and Financial Regulation, stated that OPOR “had never received a complaint relating to the conduct of a commercial co-venturer. The agreement between the charitable organization and the sponsor is a matter of contract. Any dispute arising between a charitable organization and a sponsor concerning [contributions] can be resolved by those parties or the courts as a matter of contract law.”

Of course, cause marketing in Maine and elsewhere remains subject to federal and state deceptive advertising laws and many states continue to expressly regulate cause marketing. Most common is the requirement of a written agreement between the commercial co-venturer and the charity, with several states mandating the inclusion of certain contract provisions. Massachusetts, and Alabama require registration and bonding of commercial co-ventures. Illinois, South Carolina, Mississippi, Hawaii, and California require some form of registration, although California waives registration provided the agreement between the commercial co-venture and the charity contains specific provisions designed to protect the charity.

Can Web Operators Edit and Alter User Generated Content and Still Be Protected under CDA? New York Court Of Appeals Says Yes! November 8th, 2011

November 8, 2011 – This past June, New York’s highest state court held that Section 230 of the Communications Decency Act (CDA) shields web operators from liability for allegedly defamatory user generated content (UGC), even if the web operators edit or alter the content.

In Shimali, & c. v. The Real Estate Group of New York, Inc., et al., the plaintiff alleged that the defendant, a competitor, published defamatory UGC about the plaintiff, intentionally highlighted the UGC by moving it to a separate post, and then added its own defamatory comments and an illustration related to the original UGC. According to the New York Court of Appeals, the plaintiff did not become a content provider simply by re-posting and providing a forum for further commentary, for that is “well-within a ‘publisher’s traditional editorial functions.’”  Similarly, encouraging negative commentary did not make the web operator a content provider because creating “an open forum for third-parties to post content – including negative commentary – is at the core of what Section 230 protects,” although the court indicated the outcome might be different had the defendant required negative comments as a condition of use. The court found that the plaintiff did author the additional comments and illustration accompanying the UGC post, but determined such content was not defamatory as a matter of law.

Despite a split 4-3 decision in the case and a strong dissenting opinion, the court believed it was following “national consensus” by interpreting the CDA to immunize web operators from liability for UGC “wherever such liability depends on characterizing the provider as ‘publisher or speaker’ of objectionable material” and to bar suits “seeking to hold a service provider liable for its exercise of a publisher’s traditional editorial functions – such as deciding whether to publish, withdraw, postpone or alter content.”

So what does this mean for web operators who not only welcome but intentionally highlight posts that may be derogatory and potentially defamatory? It seems that as long as posting a negative comment is not a condition of use and the web operator does not have a hand in authoring or materially developing he content, web operators are immune from liability under the CDA, even if they take editorial liberties in publicizing the negative content. At least in New York. We’ll have to see if that is in fact the “national consensus” elsewhere.

Can You Put an Expiration Date … May 31st, 2011

May 31, 2011 – on a pre-paid voucher for goods and services? For now, we think it is not advisable…

Numerous lawsuits against Groupon raise the question of the applicability of state and federal gift certificate/gift card laws to non-traditional gift certificates/cards, such as pre-paid vouchers like Groupon vouchers.

There are at least 9 cases pending against Groupon, and the key issue is whether the Groupon voucher is a gift certificate/gift card – which might vary by state/federal statutory definition. If the Groupon voucher is determined to be a gift certificate/gift card, then Groupon may be in violation of the applicable law’s prohibition or restriction on expiration dates.

Interestingly, these lawsuits are being filed even though Groupon has a policy that once the Groupon voucher expires, the retailer must honor the Groupon voucher for the value paid, as required by applicable law (for instance, Illinois law prohibits expiration of gift certificates for 5 years). For example, on June 1, 2011 you bought a Groupon voucher for $5.00 that gives admission to an Illinois museum anytime until August 31, 2011. The normal museum admission fee is $15. If you go to the museum after August 31, 2011, but before June 1, 2016, the museum could deny your entry to the museum with the voucher, but under the Groupon policy, the museum should deduct $5 from the regular admission fee (thus you tender your Groupon certificate plus $10 to gain entry to the museum). Essentially, the Groupon policy is meant to permit the “bargain” to expire, but ensure that you do not lose the original amount you paid. If the establishment refuses to honor the purchase price, Groupon’s current policy is that it will refund the purchase price to you directly.

In addition, Groupon currently has a customer-friendly refund policy that states that Groupon will refund your purchase price if you are unsatisfied with your Groupon experience for any reason.

And yet, in the face of all these Groupon policies, the lawsuits continue.

In light of the lack of clarity on the applicability of many of the gift certificate/gift card laws to pre-paid vouchers, until case law or statutory updates clarifiy the definition of gift certificates or gift cards, we advise against using expiration dates that would violate the applicable laws for gift certificates and gift cards.