Everything You Need to Know About Advertising and Privacy Law
1. Back By Popular Demand: Everything You
Always Wanted to Know About Advertising
and Privacy Law but Were Afraid to Ask
Presented by: Brian Heidelberger
Brian Fergemann
Liisa Thomas
2. Today’s eLunch Presenters
Brian Heidelberger
Chair, Advertising, Marketing and
Privacy Law
Chicago
bheidelberger@winston.com
Brian Fergemann
Partner, Advertising, Marketing
and Privacy Law
Chicago
bfergemann@winston.com
Liisa Thomas
Chair, Privacy and Data Security
Chicago
lmthomas@winston.com
2
3. Overview
• When do employees need to disclose their connection to the company in social
media?
• How serious is the FTC about requiring the inclusion of #sweeps/#contest in social
media sweepstakes entries?
• What abbreviated legal do we need for sweepstakes/contests in Social Media?
• Where do we draw the line in real-time marketing?
• How do I handle notice and choice for mobile OBA?
• How much effort is too much to establish “consideration”?
• Does my website need to be ADA compliant?
• How do I get consent to send text messages?
• What are the requirements for testing a product to substantiate performance
claims?
• Should I worry about non-US privacy laws?
• What else would be good to know about?
• What about kids?
3
4. When Do Employees Need to Disclose Their
Connection to the Company in Social
Media?
5. Any “Material Connection” Must Be
Disclosed
• FTC’s “Guides Concerning the Use of Endorsements and
Testimonials” require disclosure if there is a material
connection between someone making an “endorsement”
and the advertiser
• The FTC clarified that full disclosure of any material
connection between an endorser and the company whose
products or services are being endorsed is required
• Could the connection materially affect the credibility of the
statement? If so, it should be disclosed
5
6. What is a “Material Connection”?
• What constitutes a material connection?
• A material connection includes any payment or incentive, including
free product or the chance to win a prize
• Employees have a material connection to their employers
• Agencies and their employees have a material connection to their
clients
6
7. Agency Charged by FTC for Failure to
Disclose
• Assistant AE sent an agency-wide email to staff to Tweet
about Sony’s PlayStation Vita
• Agency employees tweeted from personal accounts
• “This is sick . . . See the new Major Game System in action. The
gaming #GameChanger”
7
8. Agency Charged by FTC for Failure to
Disclose
• Employees were not notified of their obligation to disclose
their connection to Sony and most did not disclose
• FTC stated that Deutsch LA “misled consumers by urging
its employees to create awareness and excitement about
the PS Vita on Twitter, without instructing employees to
disclose their connection to the advertising agency or its
then-client Sony”
8
9. Disclosure of Material Connection by
Employees
• Disclosure needs to be made if there is an endorsement,
which the FTC has interpreted broadly to include any
reference to the employer’s goods or services
• Informational posts likely do not need a disclosure
(where credibility and bias are not concerns)
• Post announcing a job opening
• Post touting recent company news or charity work?
9
10. Disclosure of Material Connection by
Employees
• Disclosure can be done “organically” or by use of clear
disclosures that can be easily understood
• My company just released this great new product, check it
out!
• #employee
• Disclosure of employee status on social media bio pages
is not adequate
• Disclosure must be “unavoidable”
10
11. When Do Paid Endorsers Need to
Disclose Their Material Connection?
• In general, a paid endorser should be disclosing his or her
status as a paid endorser each and every time he or she
posts anything with a reference to the company’s product
because otherwise the material connection may not be
readily apparent to the reader
• Unlike traditional advertising (where it is understood that the
celebrity is being paid), in social media there is no other way to tell
what is personal and what is advertising
• Disclosure is necessary even if the celebrity is not specifically
commenting about the product or its characteristics
• Disclosure is necessary even if the celebrity was not directed to
make the specific post
11
12. How Should Paid Endorsers Disclose
Their Material Connection?
• Disclosure may be “organic” or through the use of a
disclosure
• Acceptable disclosures likely include:
• #Sponsored
• Note: FTC staff has indicated they do not believe #Spon is clear
• #PaidAd or #Ad
• #[Brand]Partner
12
13. How Should Paid Endorsers Disclose
Their Material Connection? (cont.)
• “There are ways to abbreviate a disclosure that fits within
140 characters . . . if you cannot make the disclosure, you
can't make the ad.”
• Richard Cleland, Bureau of Consumer Protection
13
14. How Serious is the FTC About Requiring the
Inclusion of #Sweeps / #Contest in Social
Media Sweepstakes Entries?
15. FTC Closes Investigation of Cole Haan
• Cole Haan “Wandering Sole” Pinterest Contest
• Required entrants to create Pinterest boards with images of Cole
Haan products and include the hashtag #wanderingsole for a
chance to win a shopping spree
• The FTC concluded that the pins constituted an
endorsement of Cole Haan and that the chance of winning
a prize by pinning those images was a material
connection that needed to be disclosed
15
16. Disclosure of Material Connection by
Entrants
• If a consumer is given an entry into a chance promotion or a contest by
posting anything that could be viewed as an endorsement of the
sponsor or its product, require entrants to identify the post as a
sweepstakes/contest entry
• Only applies if the post constitutes an “endorsement”
• An image of the sponsor’s product likely = an endorsement
• Does a hashtag which includes the sponsor’s trademark or the requirement to
include @BRAND constitute an endorsement?
• A generic hashtag (e.g., #mysummervacation) likely does not constitute an
endorsement
• Only applies if the post is incentivized
• A sweepstakes entry is a material connection
16
17. Disclosure of Material Connection by
Entrants
• FTC noted that it did not believe that the #wanderingsole
hashtag adequately communicated the material connection
• What constitutes an adequate disclosure?
• #Sweepsentry or #Contestentry
• #Sweeps or #Contest?
• #wanderingsolecontest?
• How serious is the FTC?
• Disclosure of material connection in various contexts, including
sweepstakes and contests, has been a key point of emphasis for
staff and we believe it will continue to be for the foreseeable future
17
23. Where Do We Draw the Line in Real-Time
Marketing?
24. Find Your Risk Profile
23
Event/Third-
Party
Trademark
Copyrighted
Works
Celebrities
25. Event/Third Party Trademark
24
1. One-Time Positive
Comment to Another
Brand
2. Sharing Content
Posted By Third-Party
Brand That Positively
Mentions Your Brand
1. Posting Evocative
Content That Does Not
Use Trademarks
2. Using Official
Hashtag Promoted By
Event Owner
1. Creating and Using
an Unofficial Hashtag
Containing Third-Party
Trademark
2. Using Trademark of
Event if Competitor is
a Sponsor
26. Copyrighted Works
25
1. Re-purposing Quote
2. Linking to an Article
3. Posting Content
Owned by Brand
1. Your Own Work
Which is Evocative Of
Another
2. Using Name of a
Work One Time
1. Reproducing/Editing
Another’s Photo,
Video, etc.
2. Taking Works From
Social Media and
Using in Other Format
27. Celebrities
26
1. Responding one time to
Message or Mention
2. Interacting with Celeb.
Content that Positively
Mentions Brand/Product
1. @mention one time for
newsworthy event in
positive manner as part of
current “conversation”
2. Liking a Post Mentioning
Brand-Relevant Content
1. Showing Pic
2. Sales Message
3. Implying Endorsement
29. 9th Circuit’s Recent View on “Incidential
Use”
(Davis v. Elec. Arts Inc., 2015 BL 1633 (9th Cir. Jan. 06, 2015))
1. whether the use has a unique quality or value that would
result in commercial profit to the defendant
2. whether the use contributes something of significance
3. the relationship between the reference to the plaintiff and the
purpose and subject of the work
4. the duration, prominence or repetition of the name or likeness
relative to the rest of the publication. Id. at *6
• No incidental use where:
• “the former players’ likenesses have unique value and contribute to the
commercial value of Madden NFL”
• “[a]ccurate depictions of the players on the field are central to the creation of
an accurate virtual simulation of an NFL game”
28
30. How Do I Handle Notice and Choice for
Mobile OBA?
31. In-Ad Notice
Logo in ad:
A hyperlink
Hover over logo:
get brief disclosure
Click link:
Takes you to notice
30
33. Recent Accountability Program
Enforcement
• Buzzfeed, Go, Yelp, others
• Publishers have to have notice when let third parties collect
information for OBA purposes
• Some confusion, Accountability Program clarified and had a grace period
(Oct 2013-Jan 2014)
• Then did a sweep looking for non-compliance (found these)
• Tools used: ghostery.com
• Remember: this means not just in-ad, but on site itself
• Accountability Program will look at your site and see if you have trackers…
you should, too!
32
34. Apps/Mobile
• Notice/choice for tracking
• Recent compliance warning from
Accountability Program, applies regardless
of technology
• Notice would work same way
• Prior consent needed
• But choice??
• Web-based is easier:
www.aboutads.info/choices
• Tool has been developed, should be
implemented soon
33
35. Remember, It’s Harder in Europe
• Prior notice and consent… various options suggested by UK
ICO:
34
36. Expanding Technologies,
Requirements Stay The Same
• Different Advertising Activities: Native Ads
• These are ads that look like surrounding content
• Warning from DAA enforcement body: need to have notice/choice
• Non-cookie technologies (like mobile)
• Warning from DAA, still need notice/choice
• FTC had originally made clear: need to have notice choice
• FTC recent report on “Internet of Things,” this might get on FTC radar
again?
35
38. 39
1. Short Survey/Trivia,
2. Photo,
3. Short Video,
4. Short Essay,
5. Social Media Post,
6. Watching Short Video,
7. Use of a Product Owned by
Sponsor to Enter (as long as
ownership of product is
limited to prior to the date)
8. Single Store/Event Visit
9. Entering inside a paid
event (provided promo not
advertised outside)
1. Sharing Post/Email
2. Sending Text Message
(without free method of
entry)
3. Entries in exchange for
each friend who enters
1. Purchase or Payment
Highly Personal, Financial or
Sensitive Info
40. Title III of the ADA
• Requires that any person who owns, leases, or
operates a place of public accommodation must
provide a disabled individual the full and equal
enjoyment of the goods, services, facilities, privileges,
advantages or accommodations of its place of public
accommodation
• A “place of public accommodation” includes:
• inns, hotels, restaurants, movie theaters, auditoriums,
bakeries, museums, parks, zoos, and health spas
What about websites and apps?
41
41. Majority of Courts Apply “Nexus” Test
• For ADA to apply to a website, the website must
provide individuals with some type of access, use, or
enjoyment of an physical (bricks and mortar) place of
public accommodation
• Applying the “nexus” test, courts have found a
sufficient nexus between a retailer's website and a bricks
and mortar store where the website offered:
• ability to refill prescriptions or order photos for in-store
pickup
• ability to print coupons to use in-store
42
42. Recent Increase in Complaints Alleging
Websites Violate ADA
• At least one court (D. Mass.) has held that the ADA applied to a
website with no nexus to a physical location
• To date, courts in other circuits (such as the 9th Circuit) have
rejected attempts by plaintiffs to extend that holding to their
forum
• Claims have been filed under California’s Unruh Act as well
• No nexus requirements, but
• plaintiff must allege intentional discrimination, not just “disparate impact”
43
43. DOJ Proposed Rulemaking and
Enforcement
• Regulations to address the obligations of private parties to make
their websites accessible to disabled individuals
• Now expected in June 2015
• Settled with H&R Block over the accessibility of its website and
app, but DOJ’s allegation in complaint were partially based on
“nexus” theory:
• Tax services provided through website linked online customers to tax
professionals at retail locations
• Recent settlement with online grocery delivery service, Peapod
(which does not have physical locations)
• Settlement suggests DOJ’s broad view of ADA’s application to
websites/apps even though no connection to physical place
44
46. Getting Consent: Marketing Text
• Must be signed
• Electronic okay
• Content of request:
• Consent is not required
• Consent is not a condition for purchase
• Messages will be sent “automatically”
• MMA/Carrier issues
• STOP, HELP
• Don’t forget about “stop” cases, give alternative opt out method
• Standard text/data rates apply
• And…
• Say who is going to send
• Don’t let consent last forever
47
47. Getting Consent: Not Marketing
• Still need express consent (do not need signature)
• Easiest to follow the same process, though
• Still need to address carrier/MMA and other issues
• Rare exceptions:
• When not sent using auto-dial technologies
• And don’t forget faxes! FCC Junk Fax Order
• Must have opt-out in solicited faxes (not just unsolicited)
48
48. What Are the Requirements for Testing a
Product to Substantiate Performance
Claims?
49. What Substantiation is Required?
• Federal law requires that an advertiser possess adequate
substantiation at the time the claim is made
• “Prior substantiation” requirement
• The type of substantiation required depends on the nature
of the claim, but in general, substantiation should be
reliable, objective, unbiased written evidence establishing
a reasonable basis for the claim
50
50. What Substantiation is Required?
(cont.)
• What constitutes a “reasonable basis” will depend on the
claim
• A factual issue which will be affected by the interplay of overlapping
considerations:
• the type and specificity of the claim made
• the type of product
• the possible consequences of a false claim
• the degree of reliance by consumers on the claims
• Pfizer, Inc., 81 F.T.C. 23 (1972)
51
51. What Substantiation is Required?
(cont.)
• “Advertising claim substantiation is based, not on
perfection, but, rather, on a determination of whether an
advertiser has provided a reasonable basis for its claims.”
• Johnson & Son, Inc., NAD Case Reports (September 2006)
52
52. What Substantiation is Required?
(cont.)
• Claims relating to a product’s performance will require
thorough and scientifically valid laboratory or clinical
studies on the product
• Studies on an ingredient, as a general rule, are not sufficient to
support product performance claims. Biotech Corporation, NAD
Case Reports (October 2008).
• Establishment claims, such as “tests prove,” generally
require a higher level of substantiation
• More rigorous testing
• Multiple tests
53
53. What is Not Adequate?
• Anecdotes about performance or isolated personal
experiences/testimonials
• Santica, NAD Case Reports (Jun. 2009)
• Isolated studies which run counter to the weight of
previously published studies
• Internal memos touting a product
54
54. What is Not Adequate? (cont.)
• Tests performed according to a narrow unrepresentative
set of conditions that are not disclosed in the ad
• Example: Cleans carpet better than any other vacuum
• If testing was only conducted on one style of carpet that is rarely found in
homes, this would be insufficient to support the broad, unqualified claim
• If the substantiation only applies to certain conditions or
circumstances, the claim must be appropriately qualified to limit the
scope of the claim
55
57. Enforcement
Increasing
Worldwide
Sample 2014 Cases
58
• Allocate more compliance
$$ for global programs
• Where you could “skate
by” in U.S. for consent,
may really need it
elsewhere
• Manage lists: where did
you get that email
address?
59. What Else Would Be Good To Know
About?
• NAD Holds “Up To Claim” Only Requires “Appreciable Number”
• AT&T Services, Inc. (U-Verse) (NAD Case No. 5781)
• Use of “May” or “Helps to” Doesn’t Obviate Need for Substantiation
• Dietary supplement “may relieve symptoms including, impulsiveness,
inattention” still requires backup that some improvement will occur (ADD-
care, LLC, NAD Case No. 5785)
• Offer to Refund a Ticket isn’t Appropriate for “Best Price Guarantee”
• Requires price matching (Fareportal, NAD Case No. 5789)
• California’s “Made in the USA” Law Is Stricter Than Federal Law
• Makes having any foreign parts illegal (not “virtually all”) (Sect. 17533.7)
• Promo Can Be Offer (Not Just An Invitation, Make An Offer)
• Oregon court holds “Buy 10 gallons of fuel, get a voucher for a free lift
ticket!” promotion to be an offer (Kearney v. Equilon Enterprises, LLC)
60
61. Kids, Kids, Kids – Is COPPA Really
Working?
• Will FTC investigate Topps?
• Consumer advocacy groups asked FTC to investigate
• #RockThatRock alleged to have collected photos w/out consent
• Kids told to upload photos thru FB, Twitter, Instagram and use hashtag
• In contest rule said "by using hashtag you have gotten parental consent"
• Were they "collecting" on social media sites?
• Can you rely on social media site age gating?
• OBA and COPPA – safe harbor all the more important
• Verifiable methods of obtaining parental consent
• Some companies are coming up with “new” ways for FTC approval, but are
they really new??
62
63. Thank You.
Brian Heidelberger
Chair, Advertising, Marketing and
Privacy Law
Chicago
bheidelberger@winston.com
Brian Fergemann
Partner, Advertising, Marketing
and Privacy Law
Chicago
bfergemann@winston.com
Liisa Thomas
Chair, Privacy and Data Security
Chicago
lmthomas@winston.com
65