Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Rich highlights FTC actions on deceptive marketing, privacy, big data, (Apr 8, 2016)

By Jody Coultas, J.D.

Jessica L. Rich, the Director of Bureau of Consumer Protection of the FTC, delivered the keynote address at the 12th annual Association of National Advertisers (ANA) Advertising Law & Public Policy conference in Chicago on April 7, highlighting the FTC’s activities in the areas of deceptive marketing, consumer privacy, and big data.

The technological revolution has benefitted consumers and advertisers, even making consumers into marketers themselves. This new technology, however, has come with new issues for consumers and regulators. Although consumers benefit from the influx of personalized technology and advertising, it has become harder for consumers to protect themselves. This is where the FTC comes in, according to Director Rich. These new technologies and means of advertising have presented additional challenges for the FTC, but the basic principle remains the same—advertising must be truthful.

Over the past year, due in part to the influx of new technology, the FTC has focused on deceptive health and safety advertising, native advertising, and deceptive endorsements. The FTC has noted a huge increase in the amount of mobile apps marketed as health “detection” apps, which purport to allow consumers to detect and/or treat health issues. Director Rich also noted a trend in the area of deceptive health and safety claims targeting the elderly and children. Companies that marketed apps purporting to increase brain function, eye health, and children’s focus, memory, attention, behavior, and school performance, have all settled deceptive advertising claims with the FTC.

Another trend that the FTC has been focused on over the last year is the increase in deceptive endorsements. Director Rich stated that while the means of delivering testimonials and endorsements has changed, the line advertisers should not cross remains the same. There must be a clear disclosure of any material connection between the advertiser and the endorser. Celebrities must disclose when a company has paid them to use/test their products and product reviewers must disclose whether they were paid for the review. The FTC has also challenged the use of “gag clauses” that allow companies to sue consumers that post bad reviews.

As the lines between companies, marketers, and consumers blur, the FTC is working to make sure that consumers know what is and is not an advertisement. Advertisements and messages must be identifiable as ads, according to Director Rich.

Finally, Director Rich highlighted the FTC’s focus on consumer privacy and ways that companies can keep consumers’ personally identifiable information secure. Consumers need to know what type of data is being stored by companies, how that information will be used by the company, and whether that information will be sold to a third party.

News: Advertising Privacy FederalTradeCommissionNews