Kelly / Warner LawPhoenix, AZ-Internet Law   -Defamation    Law-IP Law         -Business    Law-Privacy Law    -Marketing ...
Connexus Inc.Greenville, SC Direct Response firm specializing in  Product launches, media buying, and  offer consulting....
Online Legal Group.Portland, OR Direct Response merchant  specializing in international CPA/CPL  offers in health and bea...
ONLINE BUSINESS & MARKETING LEGAL UPDATEToday we’re going to do a review of the currentcompliance standards for online mar...
ONLINE BUSINESS & MARKETING LEGAL UPDATEAfter the general compliance update, we’ll take a look at current legalissues rega...
ONLINE BUSINESS & MARKETING LEGAL UPDATEWe’ll then spend a few minutes exploring a few proposed and newlaws, lawsuits and ...
ONLINE BUSINESS & MARKETING LEGAL UPDATEAnd we’ll end with a quick rundown of the most important regulations, lawsand stat...
FTC UPDATEFor the past 12 months, the FTC hasbeen rocking and rolling to their usualtune of arguably inconsistent rulingsa...
NOTABLE FTC CASES OF THE PAST 12 MONTHSDate            Case              Outcome                  SignificanceOctober 2011...
NOTABLE FTC CASES OF THE PAST 12 MONTHSDate        Case                 Outcome                 SignificanceMay 2012    Je...
OTHER IMPORTANT FTC DEVELOPMENTSNew Rules For Kids AppsA study revealed that a large percentage of apps in theApple and An...
OTHER FTC DEVELOPMENTSNew Bizopp (Business Opportunity) RulesOn March 1, 2012, new bizopp disclosure requirements went int...
PICKING THE RIGHT ENTITYThe process of choosing to become an LLC, S-Corporation, C-Corporation, Partnership, LLP,LLLP, PLL...
Corporate StructuringThink your single member LLC is enough toprotect you from civil liability fromconsumers, trade associ...
BUT WHAT IF…No entity will protect you from criminal liability.Period. If you are committing a criminal act, suchas the ca...
Social MediaSocial media is no longer new – it’snearly a requirement these days. Assuch, law-makers are now gettingaround ...
Mobile MarketingMobile marketing is a powerful tool that is finallycoming into its own. The most personal form ofcommunica...
MAJOR MOBILE TOPICSCrammingShortcode cramming is a very hot topic, as manycarriers have recently shut down many shortcodes...
Privacy and DataSecurity IssuesOnline privacy and data security are a hot topic. While there is not currentlya universal p...
PROTECTING CONSUMER PRIVACY• Data Retention Security• Industry Standards: PCI Compliance• Reselling of lists and data
THINGS TO KEEPAN EYE ONWhat are the legal issues andlawsuits that every online businessperson and marketer should keep ane...
ISSUES & PEOPLE TO WATCH•   US National        • Fraley v.    Online Privacy       Facebook    Law                       •...
QUICK LAW LIST OF WHICH EVERY ONLINE BUSINESS               SHOULD BE AWARE   Dot Com Disclosure   New EU Privacy Laws –...
QUICK LAW LIST OF WHICH EVERY ONLINE BUSINESS               SHOULD BE AWARE   CDA – Communications decency act – protecti...
QUESTION  ANDANSWER
Cover Your Ass(ets): Online Advertising Compliance Update
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Cover Your Ass(ets): Online Advertising Compliance Update

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An update on the latest rules and regulations put forth by the FTC, FCC, federal government and international governing bodies. A can’t miss for mobile marketers and anyone who does business online.

Experience level: Beginner
Target audience: Affiliates/Publishers, Merchants/Advertisers, Networks
Niche/vertical: Compliance

John Monarch, CEO, Connexus Inc. (Twitter @papajohn56) (Moderator)
Aaron Kelly, Attorney, Kelly / Warner, PLLC (Twitter @aaronklaw)
CJ Montgomery, Attorney at Law, Online Legal Group

Published in: Business, Technology
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  • Note that the disclosures must be in the language of promotion
  • Verbally give a brief overview of each entity.
  • Verbally give a brief overview of offshoring.
  • Discuss social on this slide, no need for extras
  • SMS Spamming – “This is one area that is asking for someone to be made an example of”. Mention private Class action suit vs Simon and Schuster.
  • Telemarketing rule requires opting in via affirmation, discuss robo-dialing and how people must accept this via the privacy policy
  • Cover Your Ass(ets): Online Advertising Compliance Update

    1. 1. Kelly / Warner LawPhoenix, AZ-Internet Law -Defamation Law-IP Law -Business Law-Privacy Law -Marketing Lawwww.kellywarnerlaw.comwww.aaronkellylaw.com
    2. 2. Connexus Inc.Greenville, SC Direct Response firm specializing in Product launches, media buying, and offer consulting. Corporate formation consultantwww.connexus.us
    3. 3. Online Legal Group.Portland, OR Direct Response merchant specializing in international CPA/CPL offers in health and beauty industry. Corporate & Taxation Attorney: Compliance, Tax and Contractual attorney for affiliate marketing clients
    4. 4. ONLINE BUSINESS & MARKETING LEGAL UPDATEToday we’re going to do a review of the currentcompliance standards for online marketing &business. FTC Update – We’ll start off with a quick round-up of what the FTC has been up to over the past 12 months. Corporate Structuring– From there we’ll dive into why most affiliates and advertisers really aren’t protecting themselves properly.
    5. 5. ONLINE BUSINESS & MARKETING LEGAL UPDATEAfter the general compliance update, we’ll take a look at current legalissues regarding social media, in addition to newer marketing andbusiness models. Social Media - In recent months, much has happened in terms of social media rulings and regulation reform. We’ll do an overview of those issues and touch on a few points every online advertiser should remember about using social media to solicit customers. Mobile/SMS- With mobile getting white-hot, many affiliates are diving into the gray area in what is now considered the new “wild west” of internet marketing, mobile. We’ll discuss the legal ramifications, and how you can stay compliant in a scary world of shortcode cramming, paths, and SMS. Privacy – We’ll take a quick look at developments in online privacy legislation – both domestically and internationally.
    6. 6. ONLINE BUSINESS & MARKETING LEGAL UPDATEWe’ll then spend a few minutes exploring a few proposed and newlaws, lawsuits and government hearings that could affect the industry (andthe way you do business) in the coming months. What’s on the Horizon  Probable New FTC Regulations for Social Media and Mobile Devices  On The Franken Front  Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010  Do Not Track  CALEA  Online Sales Tax Issues  Von Kohorn Patent
    7. 7. ONLINE BUSINESS & MARKETING LEGAL UPDATEAnd we’ll end with a quick rundown of the most important regulations, lawsand statutes every online business person should keep in mind whendeveloping new campaigns or dealing with online legal issues. Online Business Bill & Regulation Rundown  DMCA  CDA  Dot Com Disclosures  COPPA  GLB  California Privacy Protection Act (Default national standard)  UK Cookie Law  FACTA/FCRA (For Daily Deal Operators)
    8. 8. FTC UPDATEFor the past 12 months, the FTC hasbeen rocking and rolling to their usualtune of arguably inconsistent rulingsand ineffective bans.And they still have an affinity fordoling out high fines.
    9. 9. NOTABLE FTC CASES OF THE PAST 12 MONTHSDate Case Outcome SignificanceOctober 2011 Swish Marketing Fined $4.8 Million and If they had had a Negative Option banned from using pay-day-loan Pay Day Loan misleading friendly privacy Program advertising in the policy, they may future; must monitor have escaped their affiliates. punishment.December 2011 HCG Weight FDA (Not FTC) If you were/are Loss Product declared HGC promoting them, Ban products illegal. you may want to reconsider.March 2012 Jesse Willms Fined $358 Million International effort; Negative Option and banned from Willms is Marketing – using negative option Canadian. International marketing and other Solidified FTC’s misleading strong interest in advertising. negative option marketing issues.
    10. 10. NOTABLE FTC CASES OF THE PAST 12 MONTHSDate Case Outcome SignificanceMay 2012 Jeff Paul’s Fined $450 Million Warning to all Shortcuts to and banned from marketers who Internet Millions, engaging in various use “continuity John Alexander’s marketing techniques, programs” Real Estate mainly negative (charging clients Riches In 14 option rebills. each month for Days, and John various services) Beck’s Free & who don’t make Clear Real Estate that clear in System. advertising or “get rick quick” disclosures. businessesJuly 2012 Google Safari Fined $22.5 Million Warning that the Snafu – cookies FTC is serious illegally about mal- circumvented intentioned safari privacy cookies and are measures getting better at spotting them.
    11. 11. OTHER IMPORTANT FTC DEVELOPMENTSNew Rules For Kids AppsA study revealed that a large percentage of apps in theApple and Android Marketplaces did not comply withCOPPA privacy standards. Developers now required toprovide more information when submitting appstargeted at kids. Expect to see more formal regulationsin the upcoming year.Social Media and MobileDisclosure WorkshopAt the end of May, the FTC held a workshop on thechallenges social media and mobile devices presentwith regards to marketing disclosures. Explored variousoptions including graphic disclosures, the effect of a linkthat can be read at a later time (on a larger screen) andthe timing of when disclosures should be made withgeo-location, mobile marketing.
    12. 12. OTHER FTC DEVELOPMENTSNew Bizopp (Business Opportunity) RulesOn March 1, 2012, new bizopp disclosure requirements went intoeffect. The new rules stated aim is to allow for greater transparencyand reduce costs. Sellers of work-at-home opportunities are now, officially, considered bizopps. New cover sheet required with specific information. Disclosure of past buyers, their contact info, your bizopp history, plus any fraud or illegal marketing legal actions (within the last 10 years) wherein you were found complicit. Financial disclosure statement. Clarification on what constitutes fraud when it comes to marketing bizopps
    13. 13. PICKING THE RIGHT ENTITYThe process of choosing to become an LLC, S-Corporation, C-Corporation, Partnership, LLP,LLLP, PLLC, can save you a lot of trouble andmoney. A brief overview of each entity type canreally clear up several misconceptions.Am I Safe?No entity is 100% safe from veil piercing. EvenFortune 500 Corporations have had their veilpierced in extreme cases, and the C-levelexecutives and Board of Directors have beenfound personally liable for the actions of thecompany. Keeping everything separate aspossible as previously mentioned will reduce therisk.
    14. 14. Corporate StructuringThink your single member LLC is enough toprotect you from civil liability fromconsumers, trade associations, andgovernment? Think again. The corporate veilis being pierced with regularity due toinconsistencies in structuring, improperorganization, bad bookkeeping, and mixingpersonal spending with business.Best PracticesWhether you’re a partnership, single memberLLC, all the way up to a C-corporation withVC, treat everything you do completelyseparately. Having your business pay yourhome electric bill is a bad idea, it should beaccounted for properly and paid out of yoursalary. Everything should be as separated aspossible.
    15. 15. BUT WHAT IF…No entity will protect you from criminal liability.Period. If you are committing a criminal act, suchas the catch-all Wire Fraud, nothing will protect youfrom government interference.What about Offshore?Offshore corporate formation is a highly complextopic, and very difficult to keep in compliancewithout proper guidance. One wrong move caninadvertently put you in bad graces with theIRS, even if your purpose wasn’t to dodge taxes.On the positive side, in many cases offshoring canindeed reduce your civil suit liability dramatically.Caution: Don’t try this at home. This is not fornovices, consult your experienced attorney (winkwink).
    16. 16. Social MediaSocial media is no longer new – it’snearly a requirement these days. Assuch, law-makers are now gettingaround to drafting and passing lawsthat govern privacy, data securityand marketing on social mediaplatforms. Judges are also makingrulings which are helping to shapelegal precedence when it comes tosocial media law.
    17. 17. Mobile MarketingMobile marketing is a powerful tool that is finallycoming into its own. The most personal form ofcommunication a person has is their cell phone, andaccess to market to this key device has proven tobe a goldmine for marketers.The Many PitfallsBeing that it is relatively new, the guidelines formarketing to this platform are still very vague andlargely not determined. A recent report showed thatthe FTC itself is highly limited in its ability to enforceMobile, as in the field the Federal government onlyallows Blackberry devices, and the FTC mobile labis a limited amount of devices, without carrieraccess.
    18. 18. MAJOR MOBILE TOPICSCrammingShortcode cramming is a very hot topic, as manycarriers have recently shut down many shortcodes.Cramming multiple billing paths into one PIN submitoffer is a functional equivalent of merchant cross-selling, which is highly non-compliant.SMS SpammingWhile many assume that SMS spam is covered underCAN-SPAM, it isn’t fully yet. If a message is sent viacarrier email (ie 8885551212@vzwpix.com) it iscovered by CAN-SPAM. However, if it is sent directlyover the network, the FCC takes jurisdiction here, andis still vague in enforcement. Consumers are allowedto sue in small claims court for at least $1 per spamSMS message received – has been as high as $175per SMS.
    19. 19. Privacy and DataSecurity IssuesOnline privacy and data security are a hot topic. While there is not currentlya universal privacy policy in the U.S. there are COPPA rules, plus the EUdoes have a universal law. Moreover, California codified a set of onlineprivacy laws, which have become the de facto national standard. FTCenforcement of Identity Theft laws has also been ubiquitous, howeverindustry enforcement leads the way.
    20. 20. PROTECTING CONSUMER PRIVACY• Data Retention Security• Industry Standards: PCI Compliance• Reselling of lists and data
    21. 21. THINGS TO KEEPAN EYE ONWhat are the legal issues andlawsuits that every online businessperson and marketer should keep aneye on over the next few months?
    22. 22. ISSUES & PEOPLE TO WATCH• US National • Fraley v. Online Privacy Facebook Law • Private “Scam• FTC Enforcement of Claims in Ads Report” sites• FCC enforcement and with Mobile Defamation
    23. 23. QUICK LAW LIST OF WHICH EVERY ONLINE BUSINESS SHOULD BE AWARE  Dot Com Disclosure  New EU Privacy Laws – Cookie Law  New Business Opportunity (BizOpp) Rules from the FTC  New updates to the FCC Telemarketing Rule  FDA Labeling Compliance
    24. 24. QUICK LAW LIST OF WHICH EVERY ONLINE BUSINESS SHOULD BE AWARE  CDA – Communications decency act – protection for website owners for non-ip claims like defamation, taking down not required for protection  DMCA – safe harbor to “service providers’ who remove infringing content – must designate a Copyright Agent that is registered with the US Copyright Office – notice requirements: evidence of authorization, identification of copyright work claimed to have been infringed, complaining parties contact info, good faith statement of belief; provisions may not be available to those who have knowledge of infringement and do nothing about it, aware of facts or circumstances from which infringing activity is obvious.
    25. 25. QUESTION ANDANSWER

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