Ad Law News And Views – August 22, 2024 – Advertising, Marketing & Branding – Media, Telecoms, IT, Entertainment

Congratulations to our Advertising Law attorneys who
were recognized in the 2025 edition of The Best Lawyers in
America©.

UPCOMING EVENT

Why You Should Care About the FTC’s Rule on Fake
Reviews

Tuesday, September 10, 2024, at 12:00 p.m.
ET

Last week, the Federal Trade Commission announced its final rule
designed to combat “fake” reviews and testimonials. Given
the focus of the rule and the FTC’s press surrounding it, many
companies may assume that they don’t need to worry about it.
The rule, however, does more than just ban fraudulent conduct. It
includes various provisions that reputable companies need to worry
about, too, as well as the potential for civil penalties. We’ll
break down the rule and explain what it means for you and your
business. Join Partner, Gonzalo Mon, and Special Counsel, Ioana Gorecki, as they:

• Discuss the requirements of the final rule




• Explore the interplay between the rule and the FTC’s
  recently updated Endorsement Guides




• Provide practical advice on what to consider when working with
  testimonials and reviews

Register Here.

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State AGs and Junk Fees – Where the Rubber Meets
the Road

Junk fees have made, and continue to make, state
attorney general headlines with recent actions by Maryland and Rhode Island relating to consumer
transportation. The rubber met the road when Maryland Attorney
General Anthony Brown brought charges against a car dealership and
its owners, and Rhode Island Attorney General Peter Neronha filed a lawsuit against a parking management
company.

NAD Decision Considers #1 Claims

LegalZoom makes various #1 claims, including that it is the
“#1 choice for online small business formation,” that it
is “#1 rated by small businesses,” and that is
“voted #1 by small businesses.” ZenBusiness challenged
these claims in the same case we wrote about yesterday. In some industries,
companies can look to empirical third-party data (such as sales
data) to support these types of claims. When that doesn’t
exist, companies are left to find their own support. NAD’s
decision show how tricky that can be.

NAD Decision Considers “As Seen In”
Claims

LegalZoom has a box on its website with the title “As Seen
In” followed by the logos of five publications that have
featured its services. In an NAD challenge, ZenBusiness argued that
because LegalZoom has an affiliate relationship with some of those
publications, it needs to disclose its connections to them in order
to comply with the FTC’s Endorsement Guides. LegalZoom argued
that mere press mentions don’t qualify as endorsements and,
therefore, that a disclosure isn’t required.

FTC Finalizes Rule on “Fake
Reviews”

Yesterday, the Federal Trade Commission announced its final rule
addressing consumer reviews and testimonials. With this rule, the
Commission takes aim at “fake” reviews and testimonials
by prohibiting their sale or purchase and allows the agency to seek
civil penalties against “knowing” violators.

FCC Proposes New TCPA Rules for AI Calls and
Texts

On August 7, 2024, the Federal Communications Commission (FCC)
adopted a Notice of Proposed Rulemaking and Notice of
Inquiry related to the use of artificial intelligence in
outbound calls and texts. Among the proposed rules are a definition
of an “AI-generated call” and disclosure requirements for
placing such calls. This item is the latest in a series of actions
taken by the FCC this year under its authority to implement the
Telephone Consumer Protection Act (TCPA) and demonstrates the
agency’s continued focus on what it says is the “top
category of consumer complaints that [it] receive[s].” Initial
comments on the proposed rules will be due 30 days after the item
is published in the Federal Register, and reply comments will be
due 15 days thereafter.

FTC Settlement with CarShield Holds Lessons on
Endorsements

If you’ve watched the news recently, it’s fairly safe to
predict that two things happened. First, you probably watched an
announcer recount disturbing news about the current political
climate. Second, following that segment, you probably watched a
celebrity recount the benefits of using CarShield. (If your
experience is different than mine, please let me know, so that I
can change my viewing habits.) Although both of those things may
continue to happen for a while, you may soon see some changes to
the CarShield commercials.

From GrubHub to StubHub: DC Sues StubHub for
Deceptive Pricing and Junk Fees

In June, we summarized a number of new and pending laws
specifically designed to regulate how companies display prices and
fees. Although it’s important for companies to focus on those,
we also noted that even in states without specific laws on point,
enforcers could still rely on laws that more generally outlaw
deceptive and unfair acts and practices to challenge how companies
display their prices. A new lawsuit filed this week by the DC Attorney
General against StubHub provides yet another perfect example.

Bots and False Advertising

In 2015, plaintiffs filed a lawsuit against Ashley Madison,
alleging that the company had surreptitiously employed an
“army of fembots” to lure unsuspecting men into cheating
on their spouses. (You can read our coverage of that case and
related warnings here.) Not satisfied with having broken up
countless homes, the bots are back, and this time they’re
trying to lure people away from their money. At least that’s
what Skillz Platform alleges in a false advertising lawsuit against
its competitor, Papaya Gaming.

FTC Settlement Illustrates Challenges with
“Up to” Claims

“Up to” claims can be difficult to substantiate, in
part, because the standard for substantiating those claims
isn’t always clear. Over the years, the FTC, NAD, and courts
have articulated different standards that are hard to reconcile
with each other. For example, last month, we posted about a decision in which a three-judge
panel with the Ninth Circuit determined that an “up to”
claim reflected the “upper limit” of what consumers could
expect and rejected the plaintiff’s assertions that consumers
should “always” expect that. This month, the FTC
announced a settlement that takes a different view.

Cameo Settles with 30 AGs Over Endorsement
Issues

Cameo is a platform where people can pay celebrities to record
videos with scripted personal messages. Jimmy Kimmel recently used
the platform to see if he could get George Santos to say silly
things and then Kimmel aired those videos on his late night show.
Santos later sued Kimmel, accusing him of copyright
infringement, and the two are battling that out in court. But
today, it’s Cameo that finds itself in a legal battle.

CFPB Issues Interpretive Rule for Paycheck Advance
or “Earned Wage Access” Products

Late last week, the Consumer Financial Protection Bureau (CFPB)
released a proposed interpretive rule
asserting that paycheck advance or earned wage access (EWA)
products are considered consumer loans and therefore subject to the
Truth in Lending Act (TILA), irrespective of whether the products
are provided through employer partnerships or marketed directly to
borrowers. The new interpretive rule, which unlike substantive
rules issued under the APA do not impose new legal requirements or
have the force and effect of law, explains how existing law (TILA
and Regulation Z, specifically) apply to the increasingly popular
financing option and replaces a 2020 advisory opinion issued in the
Trump administration.

Class Action Alleges Lululemon Engages in
Greenwashing

Last week, a Florida consumer filed a putative class action
against Lululemon, alleging that the company’s “Be
Planet” campaign “goes too far by creating the general,
express, and implied impression in consumers’ minds” that
the company is contributing to a healthier planet when, in reality,
the company is “causing significant damage to the environment,
which is only on track to get worse.”

AG CHRONICLES

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down State Attorneys General consumer protection issues and
highlighting news from the states. You may subscribe here.

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.