Looking Back, Looking Forward, Terri Seligman

I love our blog. My colleagues are so smart and entertaining and really keep abreast of developments in the advertising law arena. And we’re so prolific! What better way to catch up on the developments over the last year by reviewing what we were writing about? So, I did just that. And here’s what I discovered:

The FTC went through a lot of changes over the past year: not only was Linda Khan sworn in as the new Chair, but she made a number of new appointments at the agency, and announced her vision to “champion a fair and thriving economy for all” and protect the public from “corporate abuse.” That vision was reflected in the agency’s focus on communities of color, other vulnerable communities and shining a light on, and addressing, the prevalence and impact of “dark patterns” in consumer marketing.
The FTC also had to deal with the fall-out of the Supreme Court’s ruling in the AMG case, where it held that that the FTC does not have the authority to obtain equitable monetary relief from defendants by going directly to court. Rather, as a result of the Court’s ruling, the FTC must first pursue its administrative remedies, which includes getting a cease and desist order from an administrative law judge. The ruling was met with shock and dismay at the FTC, with then Chair Rebecca Slaughter stating “[i]n AMG Capital, the Supreme Court ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior.” Whether as a result of that ruling, or due to other strategic decisions and priorities, the FTC announced that it was dusting off its Notice of Penalty Offenses tool, which would allow the FTC to seek $43,792 per violation, and that it plans to refer companies and their executives to criminal authorities for prosecution when it believes that they have engaged in criminal conduct. One very notable development involving the FTC’s use of the Notice of Penalty Offense tool was its announcement that it had sent notices to 700 companies warning them about using endorsements to mislead consumers.
As to specific areas of interest to enforcers and legislators this past year, subscription programs were high on the list. Not only did California amend its already stringent law to become even stricter, but the FTC released an Enforcement Policy Statement for Negative Option Marketing as a response to the “prevalent, unabated consumer harm” resulting from abusive auto-renew programs. The Policy Statement provides specific guidance for disclosures, consent and cancellation. That guidance was based on its extensive enforcement history under ROSCA, Section 5 of the FTC Act, and the Telemarketing Sales Rule, including in 2021.
Shipping promises (and problems) also ranked high on enforcement agency priorities. Although companies may still be struggling with supply chain problems, the FTC and state enforcers are not giving companies a pass from keeping their promises. The FTC has been actively enforcing the Mail, Internet, or Telephone Order Merchandise Rule (“MITOR”) over the last few years, in part because it has been receiving a record number of complaints from online shoppers about products that were never delivered. The FTC has been especially concerned about companies making shipping promises they don’t keep about PPE materials. Local prosecutors have also been active enforcing state analogs of MITOR.
Made in US claims continued to attract FTC scrutiny. Not only did the agency adopt a new Made in US Labeling Rule, with specific requirements for use of a Made in US claim, but it continued to issue many closing letters to companies using Made in US claims. More significantly, it didn’t stop with just closing letters. There were actual monetary settlements with companies the FTC charged with falsely using Made in US claims such as this case, and this one.
Green and sustainability claims also got a lot of attention this year, especially by NAD, consumer groups and private litigants. With the FTC scheduled to review the Green Guides in 2022, I think it’s fair to say that the uptick in interest both by companies in making green claims and competitors and consumers in challenging greenwashing, will only accelerate.
And speaking of NAD, the self-regulatory forum had a very busy year, testing out its new case procedures, like SWIFT and Complex Track, and issuing a number of important cases in new industries and involving all types of media. NAD dealt with cases involving product reviews (such as this and this), the use of emojis as a claim, and sustainability claims, among others. Our blog also covered interesting court cases involving claims, puffery and substantiation.
The ad law world doesn’t just revolve around solely FTC, NAD and court actions, of course. The platforms also were busy this year, releasing new functionality and new rules, particularly around targeting. You can check out some of those posts here, here and here.
No round-up of our blog posts would be complete without reminding you about Brian Murphy’s always insightful and popular coverage of interesting copyright cases, like this one addressing “substantial similarity”, and this dealing with the server test and embedded photos. He also helped us all by covering the ever complex and important developments with the SAG Commercials Contract, like this and this.
And, finally, we covered the unleashing of NFTs on the world. Still don’t know what an NFT is, or why you should care about them, be sure to read Hannah Taylor’s and Jeremy Goldman’s detailed posts here and here. A fad or here to stay? We’ll find out in 2022.