Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Blurring of content and advertising keeps FTC on its toes: Consumer Protection official, (Nov 13, 2015)

By Jody Coultas, J.D.

In the keynote address at the 37th Marketing Law Conference of the Brand Activation Association (BAA) on November 10, Daniel Kaufman, Deputy Director of the FTC Bureau of Consumer Protection, highlighted how new technologies and the blurring of content and advertising have challenged the agency’s enforcement efforts.

The BAA’s annual conference, entitled “Walking the Line: Between Innovation and Regulation,” focused on multiple aspects of digital and social media, on-time behavioral advertising, big data, native advertising, and the latest developments in the areas of Lanham Act litigation, regulation, and privacy. Over 700 professionals from around the globe attended the conference, held November 9-11 in Chicago.

As a fan of the zombie show The Walking Dead, Kaufman drew parallels between the popular show and the current digital revolution. Consumers do not engage with The Walking Dead simply by tuning in each week. Companies now can engage consumers across multiple platforms in real time. The Walking Dead has spawned several apps, features sponsored products in its episodes, and allows consumers to generate their own show-related content. These new platforms have blurred the lines between content and advertising, and the FTC is particularly focused on what this blurring means for consumers.

Although the traditional tools and notions of advertising and marketing have changed, the basic rules still apply, Kaufman observed. Advertisers, marketers, and brands must clearly and conspicuously disclose affiliations and what is advertising. Companies are responsible for making sure that all advertising is truthful and accurate, and does not harm consumers. Companies also must take steps to refrain from helping others deceive or harm consumers, and keep consumer information safe.

Technology has fundamentally altered how companies communicate, engage with, and learn about consumers. In response, the FTC is focused on developing tools, issuing guidelines, and bringing enforcement actions that address the issues that arise from ever-changing technologies, according to Kaufman.

Mobile platforms. The FTC cracked down on cramming and companies that charged consumers for unauthorized purchases, settling claims with AT&T and T-Mobile. Also, the FTC brought claims against vision app developers that promised deceptive health benefits and used malware in order to mine virtual currencies.

Gag clauses. In a case against Roca Labs, the FTC received an injunction prohibiting the use of a gag clause in a sales contract that allowed the company to sue consumers who posted negative comments about their products online.

Unfair and deceptive claims. In highly publicized cases against AT&T and other wireless providers, the FTC filed suit for allegedly advertising unlimited broadband data plans that slowed down or throttled service when consumers reached a certain limit. The takeaway, according to Kaufman was that unlimited must mean unlimited. As seen in the case against DirecTV, the FTC is focused on making sure that companies clearly and conspicuously disclose subscription terms.

Robocalls. Changes to technology have led to a huge number of robocall cases. In response, the FTC has held contests to create technology that blocks robocalls and helps track down the callers. The winner created the app RoboKiller.

Privacy and Big Data. While many are excited about the possibilities associated with “big data,” there are also great risks. Companies must refrain from collecting and/or retaining more data than it reasonably needs. The FTC is looking at new technology that allows retail stores to track customers in stores and the opt-in and notice issues related to such technology. As highlighted by the on-going case against Wyndham, failing to protect consumers’ data will result in enforcement actions by the FTC. Also, consumers must be given clear and meaningful choices about how their data is used. The FTC is currently working on additional policies and guidance to supplement its current educational tools.

Fraud. Weeding out fraud is still the FTC’s largest consumer protection program. The FTC has brought a number of complaints to stop and prevent scam charities, phony business opportunities, investment schemes, and debt reduction schemes.

Kaufman noted that the FTC will act whenever necessary to promote and ensure compliance and deter consumer harm—including a zombie apocalypse.

The BAA is a national, non-profit trade association founded in 1911 to champion the marketing industry through research, education, advocacy, and collaboration opportunities. Members include Fortune 500 companies, marketing agencies, law firms, retailers, and service providers. The BAA is a division of the Association of National Advertisers. For more information visit www.ana.net and www.baalink.org.

News: Advertising ConsumerProtection Privacy FederalTradeCommissionNews