On January 5, 2023, the Federal Trade Commission (“FTC”) unveiled a proposed ruling that would essentially ban noncompete agreements across the country. This proposed ruling is based on a finding that noncompete agreements constitute an unfair method of competition and violate Section 5 of the Federal Trade Commission Act.
Continue Reading Non-Compete No More? FTC Proposes Broad Ban of Non-Compete Agreements
In her September 20, 2022 statement before the Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights, Federal Trade Commission (“FTC”) Chairwoman Lina Kahn emphasized the FTC’s continued work combating repair restrictions that allegedly harm consumers, explaining that the FTC is “prioritizing action against business practices that unlawfully restrict consumers’ ability to repair their products, costing them more over the long term.”[1]
Continue Reading Federal Trade Commission Focused on Right to Repair Restrictions
On August 9, the US District Court of Georgia ruled that the FTC had provided “broad and detailed evidence” for its allegations that a tech company and its CEO engaged in deceptive advertising and unfair fee practices in violation of Section 5 of the FTC Act. The FTC’s 2019 complaint alleged the defendants made deceptive representations to customers and charged hidden, unauthorized fees in connection with the company’s “fuel card” as well as through co-branded cards, to companies in the trucking and commercial fleet industry. The FTC’s factual allegations include the following:
The FTC is seeking public comment on proposed changes to its Endorsement Guides. These changes aim to strengthen the guidelines against advertisers posting falsely positive reviews or by manipulating reviews by suppressing negative ones.
Continue Reading FTC Strengthens Advertising Guidelines Against Fake Reviews
On March 22, the CFPB issued Compliance Bulletin 2022-05 regarding potentially illegal practices related to consumer reviews. The guidance states that consumer reviews impact company revenue and help consumers choose between financial providers, which can in turn “incentivize dishonest market participants to attempt to manipulate the review process, rather than compete based on the value of their services, which can frustrate a competitive marketplace.”
Continue Reading CFPB Flexes UDAAP Muscle Over Contractual “Gag” Clauses and Fake Consumer Reviews
In April 2018, the Federal Trade Commission (“FTC”) wrote to Florida-based Teami LLC (“Teami”), a Florida-based producer of Teami tea and skincare products, reminding it of the requirement set forth in the FTC’s Endorsement Guides, that any material connections, including compensation, between advertisers and internet end-users need to be disclosed “clearly and conspicuously” to consumers. The letter noted that endorsers should use unambiguous language and consumers should be able to notice the disclosure easily without having to look for it; and that because consumers viewing posts in their Instagram feeds typically see only the first few lines of a larger post unless they click “more,” endorsers should decide any material connection above the name look.[1]
Continue Reading FTC Cracks Down On Deceptive Social Media Campaign By Teami LLC
Sunday Riley launched her skincare firm Sunday Riley Modern Skincare, LLC (“SRMS”) in 2009 and its skincare products, including Good Genes, Power Couple, U.F.O., C.E.O., Luna and Tidal, have enjoyed tremendous success, having been featured, promoted, and sold online through Sephora and its website, www. Sephora.com. On October 21, 2019, the Federal Trade Commission (“FTC”) announced a consent order in an action for violation of Section 5 of the FTC Act against Ms. Riley and SRMS for posting false reviews of its Sunday Riley products and falsely representing that the false reviews reflected the opinions of ordinary customers of the products.[1] The FTC’s proposed continuing consent order provides: (1) Riley and SRMS are prohibited from misrepresenting the status of any endorser or person providing a review of a product, including misrepresenting that an endorser or reviewer is an independent or ordinary user of the product; (2) Riley and SRMS are required to clearly disclose any unexpected material connection between SRMS and anyone reviewing a product; (3) Riley and SRMS are required to instruct employees, officers and agents as to their responsibilities for disclosing their connections to SRMS and any Sunday Riley product they endorse and that SRMS obtain signed acknowledgments from any endorser; and (4) Riley and SRMS are required to submit compliance reports to the FTC within one‑year of the order and to create records for twenty years and retain them for five years.[2]
Continue Reading “Good Genes?”: Maybe Not. FTC Takes Action Against Sunday Riley and Sunday Riley Modern Skincare, LLC For Employees False Reviews
In our previous blog post, “Brands Beware!!! FTC Scrutinizing Influencer Posts for Compliance with Endorsement Guides,” we reported that the Federal Trade Commission (“FTC”) had issued more than 90 letters to brands and influencers, making it clear that it is paying close attention to influencer-based marketing. More recently, the letters have been made publicly available, providing valuable insight into the types of disclosures that the FTC considers unacceptable or inadequate.
Continue Reading A Deeper Dive Into the FTC Crack-Down on Social Media Influencers: What You Should Know Before You Post
In response to a petition from a coalition of consumer groups last year complaining about the need for disclosures by social media influencers, the FTC recently announced on April 19, 2017 that it had issued more than ninety letters reminding influencers and brands that “if there is a ‘material connection’ between an endorser and the marketer of a product – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement.” The FTC explained that material connections could “consist of a business or family relationship, monetary payment, or the provision of free products from the endorser.” A copy of the form of the letter, which explains that clear and conspicuous disclosures are required can be found here.
Continue Reading Brands Beware!!!! FTC Scrutinizing Influencer Posts for Compliance with Endorsement Guides
In its opinion in In re California Naturel, Inc., the Federal Trade Commission held that the California Naturel, Inc. advertising promoting its “all natural” sunscreen on its website as containing “only the purest, most luxurious and effective ingredients found in nature” violated Section 5 and 12 of the FTC Act. The opinion, written by Chairwoman Edith Ramirez, noted that California Naturel admitted that eight percent of its sunscreen formula is in fact dimethicone, a synthetic ingredient.
Continue Reading FTC Grants Summary Judgment Against California Naturel, Inc. Falsely Advertising “Sun Blocked” Sunscreen Products