Mobile Marketing Legal Risks 2.0           David S. Almeida, Partner, Sedgwick LLPTwitter handle: @almeidage; Company hand...
#MobiU2012, @almeidage @sedgwickllp                       Overarching Themes Increasing focus on privacy by FTC, FCC, Con...
#MobiU2012, @almeidage @sedgwickllp                Privacy Overview - BasicsFair Information Practice Principles (FIPP)   ...
#MobiU2012, @almeidage @sedgwickllp          Many, Many, Many Laws & Regulations                   Potentially ApplyA veri...
#MobiU2012, @almeidage @sedgwickllpIn addition to numerous federal laws, also     have to contend with state law    46 st...
#MobiU2012, @almeidage @sedgwickllp           FTC Suggested Best Privacy PracticesThe Federal Trade Commission Act        ...
#MobiU2012, @almeidage @sedgwickllp“Protect the consumer, and you protect the               opportunity”— Michael Becker, ...
#MobiU2012, @almeidage @sedgwickllp“The screen is small, but section 5 [of the FTC Act] still applies.” --                ...
#MobiU2012, @almeidage @sedgwickllp   Mobile: Different LEGALLY from Other           Forms of Marketing1. Requires affirma...
#MobiU2012, @almeidage @sedgwickllpTelephone Consumer Protection Act (TCPA) Originally passed in 1991 Broadly applicable...
#MobiU2012, @almeidage @sedgwickllp               A Text is a Call Under The Law                                          ...
#MobiU2012, @almeidage @sedgwickllpSatterfield v. Simon & Schuster, Inc.•   9th Circuit reversed MTD and held that a text ...
#MobiU2012, @almeidage @sedgwickllp          Mobile Marketing Lawsuits 2.0•   SIGNIFICANT FRANCHISOR/EE ISSUES•   Recent J...
#MobiU2012, @almeidage @sedgwickllpIs a Friend Forwarded Text a Call Under the                   Law?  •   Depends – no co...
#MobiU2012, @almeidage @sedgwickllp          Increased Regulatory Scrutiny of            Robo-calling Mobile PhonesFCC Reg...
#MobiU2012, @almeidage @sedgwickllpRecent FTC Enforcement Actions
#MobiU2012, @almeidage @sedgwickllp             Increasing Focus on Apps        (particularly children-focused apps)Privac...
#MobiU2012, @almeidage @sedgwickllp        Privacy Concerns with Promotions•   Post privacy policy on any page data is col...
#MobiU2012, @almeidage @sedgwickllp                         What’s next?•   Continued focus on mobile privacy and geo-loca...
#MobiU2012, @almeidage @sedgwickllp                       Key Takeaways Privacy policy and terms of use   •   Clear and p...
#MobiU2012, @almeidage @sedgwickllp
#MobiU2012, @almeidage @sedgwickllp                       Contact InformationDavid Almeida, Sedgwick LLP   •   312.849.198...
#MobiU2012, @almeidage @sedgwickllp                        About SedgwickSedgwick provides its clients with informed corpo...
#MobiU2012, @almeidage @sedgwickllp                                Disclaimer•   This presentation is for general informat...
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MobiU2012 Summit: Mobile Class Action Litigation & Privacy - by Sedgwick

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MobiU2012 Summit: Mobile Class Action Litigation & Privacy - by Sedgwick

  1. 1. Mobile Marketing Legal Risks 2.0 David S. Almeida, Partner, Sedgwick LLPTwitter handle: @almeidage; Company handle: @sedgwickllp Event hashtag #MobiU2012 Presented by the Heartland Mobile Council
  2. 2. #MobiU2012, @almeidage @sedgwickllp Overarching Themes Increasing focus on privacy by FTC, FCC, Congress & Plaintiffs’ lawyers Prevailing sentiment is that companies slow to enact proactive measures Patchwork quilt of potentially applicable laws = very confusing and treacherous state Plaintiffs’ lawyers assert ill-fitting theories because law lags technology
  3. 3. #MobiU2012, @almeidage @sedgwickllp Privacy Overview - BasicsFair Information Practice Principles (FIPP)  Notice - What information will be collected and how used  Choice/Consent - Options for use/sharing, opt-in v opt-out  Access - Consumer options to review, update, delete information  Security - Measures taken to protect and secure data
  4. 4. #MobiU2012, @almeidage @sedgwickllp Many, Many, Many Laws & Regulations Potentially ApplyA veritable alphabet soup of laws and agencies that either explicitly orimplicitly regulate privacy, including: 1. The FTC Act (Section 5) 2. State Unfair and Deceptive Practices Acts 3. State Privacy Laws, incl. Breach Notification req 4. CAN-SPAM 5. TCPA, FCC regulations & Do-Not-Call Rules 6. Children’s Online Privacy Protection Act 7. Gramm-Leach-Bliley Act 8. Computer Fraud and Abuse Act 9. HIPPA / HITECH Act 10. Video Privacy Protection Act 11. Fair Credit Reporting Act (FCRA) & Fair and Accurate Credit Transactions Act (FACTA)
  5. 5. #MobiU2012, @almeidage @sedgwickllpIn addition to numerous federal laws, also have to contend with state law  46 states, the District of Columbia, Puerto Rico, and the Virgin Islands each have their own security breach notification law  The only states without a security breach law in place are Alabama, Kentucky, New Mexico and South Dakota
  6. 6. #MobiU2012, @almeidage @sedgwickllp FTC Suggested Best Privacy PracticesThe Federal Trade Commission Act 5 – 45 U.S.C. 45(a)  Section 5 of the FTC Act prohibits “[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce . . . .”  Imposes a standard of reasonableness for conduct relating to breaches - Audit - Data Minimization - Take reasonable steps to protect PI - Train employees - Accurately disclose - Monitor web applications - Easy to understand privacy policy
  7. 7. #MobiU2012, @almeidage @sedgwickllp“Protect the consumer, and you protect the opportunity”— Michael Becker, Managing Director for North America, Mobile Marketing Association1. Protect consumers’ privacy2. Give consumers choice in terms of timing and method of engagement3. Provide CLEAR AND CONSPICUOUS NOTICE to consumers of what they can expect when they engage in marketing program, including information re: opt-out
  8. 8. #MobiU2012, @almeidage @sedgwickllp“The screen is small, but section 5 [of the FTC Act] still applies.” -- FTC Commissioner Brill  Geo-targeting • Location, Location, Location • Brown v. Google & Gupta v. Apple  App-based • In re iPhone Application Litigation  Online tracking • Behavioral advertising • Google, Microsoft and many others  Mobile, Social Commerce & other e-commerce claims • Gift buying, daily deal sites (expiration date cases) • FACTA & Song-Beverly
  9. 9. #MobiU2012, @almeidage @sedgwickllp Mobile: Different LEGALLY from Other Forms of Marketing1. Requires affirmative consent (opt-in); most other forms of DM do not (CAN-SPAM, for ex, opt-out)2. Lack of sufficient space for adequate disclosures (hashtags, links)3. Absence of uniform national regulations or laws (courts apply TCPA (passed in ’91) to mobile)4. Cost – consumers complain that unlike other forms of DM, SMS actually costs them $ (in addition to privacy concerns)
  10. 10. #MobiU2012, @almeidage @sedgwickllpTelephone Consumer Protection Act (TCPA) Originally passed in 1991 Broadly applicable to direct marketing via calls, faxes and texts Recipients May File a Lawsuit on Behalf of a Class of Similarly Situated Persons (a Class Action Lawsuit) Seeking:  Actual monetary damages incurred or  $500/per violation or $1,500 for each ―willful‖ violation.  No cap on amount of ―damages‖ recoverable (unlike many other consumer protection statutes)  For certain judges, plaintiffs’ burden on proving willfulness is very easily met
  11. 11. #MobiU2012, @almeidage @sedgwickllp A Text is a Call Under The Law SatterfieldSatterfield v. Simon & Schuster, Inc.569 F.3d 946 (9th Cir. 2009) Nextones.com • Whether a text message is a “call” under the TCPA? • Whether text was sent with plaintiff’s Mobile Information “prior express consent”? Access Co. Ipish! Simon & Schuster
  12. 12. #MobiU2012, @almeidage @sedgwickllpSatterfield v. Simon & Schuster, Inc.• 9th Circuit reversed MTD and held that a text is a “call” under TCPA• Plaintiff did not give ―prior express consent‖ to Simon & Schuster to text her• Case ultimately settled: creation of a $10M settlement fund with plaintiff’s attorneys receiving $2.7M
  13. 13. #MobiU2012, @almeidage @sedgwickllp Mobile Marketing Lawsuits 2.0• SIGNIFICANT FRANCHISOR/EE ISSUES• Recent Jiffy Lube Settlement - b/t $35M and $47M in cash & services - $17.29 gift certificates or $13 cash• Question of control – Dominos, Taco Bell & PH
  14. 14. #MobiU2012, @almeidage @sedgwickllpIs a Friend Forwarded Text a Call Under the Law? • Depends – no court has ruled yet • Case in Florida involving largest Pizza Hut franchisee • We assert that a decision by a mobile subscriber to input a friend’s number and send them a text is not an automated telephone dialing system as required under the law
  15. 15. #MobiU2012, @almeidage @sedgwickllp Increased Regulatory Scrutiny of Robo-calling Mobile PhonesFCC Regulations• Recent FCC Final Rule (effective July 11, 2012) requires prior express consent for “autodialed or pre-recorded non- telemarketing calls to wireless numbers”• If a telemarketing call (promotional) consent must be in writing• MANY, MANY class actions filed since
  16. 16. #MobiU2012, @almeidage @sedgwickllpRecent FTC Enforcement Actions
  17. 17. #MobiU2012, @almeidage @sedgwickllp Increasing Focus on Apps (particularly children-focused apps)Privacy and Apps FTC Report on Children’s Apps – “DisAPPointing”  Lack of privacy policies for kids apps California Online Privacy Protection Act applies to apps (requires the posting of a privacy policy) FTC Business Guidance to app developers (9/5/12)  Emphasis on complying with FIPP  http://www.ftc.gov/opa/2012/09/mobilapps.shtm
  18. 18. #MobiU2012, @almeidage @sedgwickllp Privacy Concerns with Promotions• Post privacy policy on any page data is collected & in provided a link in contest rules• Only collect data necessary & only use data for contest entry and to notify winner• Do not auto enroll customers into loyalty programs• If entrant is a member of loyalty program, don’t connect data
  19. 19. #MobiU2012, @almeidage @sedgwickllp What’s next?• Continued focus on mobile privacy and geo-location issues• Mobile Device Privacy Act (introduced Sept. 2012) • Other federal privacy bills introduced• Plaintiffs’ class action bar too remain incredibly active • Very attractive cases ($500 to $1,500 per violation, without having to prove actual damages)
  20. 20. #MobiU2012, @almeidage @sedgwickllp Key Takeaways Privacy policy and terms of use • Clear and prominent disclosure of data sharing, protection practices • Express consent based on disclosure Class Action Waiver • Clear and conspicuous • Cannot substantively modify without notice to user Easy to access, store and delete PI Disclosure of marketing partners (Shine the Light law) Strong indemnity agmts from vendors &affiliates
  21. 21. #MobiU2012, @almeidage @sedgwickllp
  22. 22. #MobiU2012, @almeidage @sedgwickllp Contact InformationDavid Almeida, Sedgwick LLP • 312.849.1985 • david.almeida@sedgwicklaw.com • LinkedIn: • www.linkedin.com/in/davidsalmeida • twitter.com/almeidageDigital Media Law Blog: http://digital-media-law.com
  23. 23. #MobiU2012, @almeidage @sedgwickllp About SedgwickSedgwick provides its clients with informed corporate and transactionaladvice, effective litigation strategies, and long-term litigation avoidancecounsel. With more than 350 attorneys in offices throughout NorthAmerica, Bermuda* and Europe, Sedgwick’s collective experience spans theglobe and virtually every industry. For more information about Sedgwick, itsattorneys, and its services, visit the firm’s website atwww.sedgwicklaw.com.
  24. 24. #MobiU2012, @almeidage @sedgwickllp Disclaimer• This presentation is for general informational purposes only and is not legal advice. The evaluation of legal issues always depends on specific facts and circumstances. This presentation should not be used as a substitute for competent legal advice from a licensed attorney.• Your use of this presentation does not create an attorney-client relationship. Please do not send us any confidential information by email or otherwise as your communication will not be privileged and may be subject to compelled disclosed to other persons.

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