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Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
Oprah, Flogs and FTC: Hot Topics 2010
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Oprah, Flogs and FTC: Hot Topics 2010

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This session un-muddies the murky waters of the FTC’s ever-changing focus, the proliferation of IP-related lawsuits, and the legal ambiguity regarding many forms of Internet-based marketing.

This session un-muddies the murky waters of the FTC’s ever-changing focus, the proliferation of IP-related lawsuits, and the legal ambiguity regarding many forms of Internet-based marketing.

Published in: Business, Economy & Finance
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  • 1. OPRAH, FLOGS & THE FTC <br />HOT TOPICS 2010<br />Pete Wellborn<br />Wellborn, Wallace & Woodard, LLC<br />www.wellbornlaw.com <br />
  • 2. AFFILIATE SUMMIT WEST 2010 LAS VEGAS, NEVADA<br />OPRAH, FLOGS & THE FTC: HOT TOPICS 2010<br />Affiliate Programs<br />
  • 3. AD CONTENT<br />TRUTH, PROOF & FAIRNESS<br />
  • 4. TRUTH IN ADVERTISING<br />* * * GENERALLY * * * <br />PROHIBITS<br />“DECEPTIVE” ADS<br />AND<br /> “UNFAIR” ADS<br />F T C<br />
  • 5. TRUTH IN ADVERTISING<br />* * * GENERALLY * * * <br />BRICKS & MORTAR = .COM<br />F T C<br />
  • 6. TRUTH IN ADVERTISING<br />* * * GENERALLY * * * <br />“DECEPTIVE” AD<br /><ul><li> Likely to mislead consumer</li></ul> and<br /><ul><li> Likely to affect consumer’s</li></ul> behavior or decision about<br /> the product or service<br />F T C<br />
  • 7. TRUTH IN ADVERTISING<br />* * * GENERALLY * * * <br />“MISLEADING”<br /><ul><li> Relevant info left out OR
  • 8. False claims OR
  • 9. Unsubstantiated claims.</li></ul>F T C<br />
  • 10. TRUTH IN ADVERTISING<br />* * * GENERALLY * * * <br />“MISLEADING”<br />COMMON VIOLATIONS<br /><ul><li> Disclaimers & Disclosures
  • 11. Demonstrations
  • 12. Refund Policies
  • 13. Ads Directed at Children
  • 14. Environmental Claims
  • 15. “Free” Stuff
  • 16. Jewelry-Related Claims</li></ul>F T C<br />
  • 17. TRUTH IN ADVERTISING<br />* * * GENERALLY * * * <br />“UNFAIR” AD<br />Causes, or is likely to cause, injury that is:<br /><ul><li>Substantial AND
  • 18. Not outweighed by </li></ul> other benefits AND<br /><ul><li> Not reasonably avoidable.</li></ul>F T C<br />
  • 19. TRUTH IN ADVERTISING<br />* * * GENERALLY * * * <br />WHO IS LIABLE?<br /><ul><li> Seller (Manufacturer or Provider)
  • 20. Ad Agencies (Negligence Standard)
  • 21. Site Designers (Negligence Standard)
  • 22. Affiliates (Negligence Standard)
  • 23. Individuals (Personally Involved) </li></ul>“Negligence Standard” = knew or should have known that the ad included false or deceptive claims. <br />F T C<br />
  • 24. TRUTH IN ADVERTISING<br />* * * GENERALLY * * * <br />OTHER FTC-ENFORCED LAWS<br /><ul><li> Franchise & Business Opportunity Rule
  • 25. MLM/Pyramid Scheme Rules/Laws
  • 26. Truth in Lending Act
  • 27. Fair Credit Billing Act
  • 28. Fair Credit Reporting Act
  • 29. Equal Credit Opportunity Act
  • 30. Electronic Fund Transfer Act
  • 31. Consumer Leasing Act
  • 32. Mail/Telephone Order Merchandise Rule
  • 33. Negative Option Rule
  • 34. 900-Number Rule
  • 35. Telemarketing Sales Rule
  • 36. Written Warranty Rule
  • 37. Etc. Etc. Etc.</li></ul>F T C<br />
  • 38. TRUTH IN ADVERTISING<br />* * * GENERALLY * * * <br />RULES OF THUMB<br /><ul><li>Truth
  • 39. Consumer Point-of-View
  • 40. Proof
  • 41. Careful: Disclaimers/ Disclosures
  • 42. Careful: Endorsement Claims</li></ul>F T C<br />
  • 43. OUR FOCUS TODAY<br />Testimonials & <br />Endorsements<br />“Free” Stuff<br />“Flogs” <br />(Fake Blogs)<br />Proof of <br />Claims<br />
  • 44. TESTIMONIALS & <br />ENDORSEMENTS<br />
  • 45. TESTIMONIALS & <br />ENDORSEMENTS<br />FIRST RULE:<br />Accurate<br />SECOND RULE:<br />With Permission<br />(“Right of Publicity”)<br />
  • 46. TESTIMONIALS & <br />ENDORSEMENTS<br />GENERAL CONSIDERATIONS<br /><ul><li>Honest Opinion/Belief of Endorser</li></ul>Guides Concerning the Use of Endorsements <br />and Testimonials in Advertising (16 CFR Part 255 )<br />
  • 47. TESTIMONIALS & <br />ENDORSEMENTS<br />GENERAL CONSIDERATIONS<br /><ul><li>Honest Opinion/Belief of Endorser
  • 48. Same Claim-Standard as Seller</li></ul>Guides Concerning the Use of Endorsements <br />and Testimonials in Advertising (16 CFR Part 255 )<br />
  • 49. TESTIMONIALS & <br />ENDORSEMENTS<br />GENERAL CONSIDERATIONS<br /><ul><li>Honest Opinion/Belief of Endorser
  • 50. Same Claim-Standard as Seller
  • 51. Endorsers Must Continue in Belief</li></ul>Guides Concerning the Use of Endorsements <br />and Testimonials in Advertising (16 CFR Part 255 )<br />
  • 52. TESTIMONIALS & <br />ENDORSEMENTS<br />GENERAL CONSIDERATIONS<br /><ul><li>Honest Opinion/Belief of Endorser
  • 53. Same Claim-Standard as Seller
  • 54. Endorsers Must Continue in Belief
  • 55. Statements Presented in Context</li></ul>Guides Concerning the Use of Endorsements <br />and Testimonials in Advertising (16 CFR Part 255 )<br />
  • 56. TESTIMONIALS & <br />ENDORSEMENTS<br />GENERAL CONSIDERATIONS<br /><ul><li>Honest Opinion/Belief of Endorser
  • 57. Same Claim-Standard as Seller
  • 58. Endorsers Must Continue in Belief
  • 59. Statements Presented in Context
  • 60. Claimed Use: Bona Fide and Ongoing </li></ul>Guides Concerning the Use of Endorsements <br />and Testimonials in Advertising (16 CFR Part 255 )<br />
  • 61. TESTIMONIALS & <br />ENDORSEMENTS<br />CONSUMER ENDORSEMENTS<br /><ul><li>Claims Must Be Representative
  • 62. Claims Must Be Substantiated</li></ul> OR<br /><ul><li>Claims Can Be Disclaimed (MAYBE)
  • 63. Same Claim-Standard as Seller
  • 64. “Actual Consumer” Must Be Just That</li></ul>Guides Concerning the Use of Endorsements <br />and Testimonials in Advertising (16 CFR Part 255 )<br />
  • 65. TESTIMONIALS & <br />ENDORSEMENTS<br />EXPERT ENDORSEMENTS<br /><ul><li>“Expert” Must Be Just That
  • 66. Actual Exercise of Expertise/Opinion
  • 67. Claims Must Be True As Stated </li></ul>Guides Concerning the Use of Endorsements <br />and Testimonials in Advertising (16 CFR Part 255 )<br />
  • 68. TESTIMONIALS & <br />ENDORSEMENTS<br />ORGANIZATION ENDORSEMENTS<br /><ul><li>True Collective Judgment/Opinion
  • 69. Must Be True “Expert” Opinion</li></ul>Guides Concerning the Use of Endorsements <br />and Testimonials in Advertising (16 CFR Part 255 )<br />
  • 70. TESTIMONIALS & <br />ENDORSEMENTS<br />MATERIAL CONNECTIONS<br /><ul><li>Connection Between Endorser and Seller That Might Materially Affect the Weight or Credibility of The Endorsement Must Be Fully Disclosed.
  • 71. Rule Often Applies Where Endorser Is Not Celebrity or Well-Known Expert.
  • 72. “Connection” May Be Money or Publicity.</li></ul>Guides Concerning the Use of Endorsements <br />and Testimonials in Advertising (16 CFR Part 255 )<br />
  • 73. “FLOGS” <br />(FAKE BLOGS)<br />MATERIAL CONNECTIONS RULE APPLIES TO BLOGS AND FLOGS<br />(EXAMPLES)<br />
  • 74. “FREE” STUFF<br /><ul><li> “Free” means free.
  • 75. “Regular Price” means same price, in the same quality, quantity, and service level at which the seller has sold the product in that geographic market or trade area for a reasonably substantial period of time.
  • 76. Ad must be clear. All obligations and conditions set forth at the outset (not the end).
  • 77. Seller must “cut off” deceptive resellers.
  • 78. State laws may apply !</li></li></ul><li>PROOF OF CLAIMS<br />REQUIRED PROOF OF AD CLAIMS<br /><ul><li> “Reasonable basis” for All Express and Implied Claims.
  • 79. “Reasonable” = Content + Presentation + Context + Qualification
  • 80. Amount and Type of Substantiation/Proof</li></ul> - Type of Product (Health Products = High Level)<br /> - Type of Claim<br /> - Benefit of Truthful Claim<br /> - Cost of Substantiation<br /> - Consequences of False Claim<br /> - What Experts in Field Say Is Reasonable<br />
  • 81. PROOF OF CLAIMS<br />WHEN SCIENTIFIC EVIDENCE IS <br />USED OR REQUIRED<br /><ul><li> Prove Stated Level of Support (“4 out of 5 dentists agree . . .”)
  • 82. Amount and Type of Proof Varies (“Anecdotes not enough”)
  • 83. Quality of Evidence (“Competent and reliable”)
  • 84. Totality of Evidence (“Can’t ignore unfavorable”)
  • 85. Relevance of Studies to Claim (“Study matches claim”)</li></li></ul><li>QUESTIONS?<br />Pete Wellborn<br />pete@wellbornlaw.com<br />www.wellbornlaw.com<br />

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