Consumer Protection Review

The latest legal updates in marketing, consumer products & consumer protection

You see it and your heart sinks: a one-star review with negative feedback for your business on an online review site. You think it’s unlawful and want it taken down. What do you do? The California Supreme Court recently considered a case showing what not to do. In Hassell v. Bird, Ava Bird left one-star reviews for her lawyer, Dawn Hassell, on Yelp. Ms. Hassell wanted the reviews taken down so she sued Ms.…
California’s updated automatic renewal law (ARL) took effect on July 1, 2018.  We covered these changes in a 2017 client alert, but a reminder is important here because the new law is now “live” and we expect to see more enforcement efforts for alleged noncompliance with the law. The ARL sets rigid rules about transparency for subscription-based business models where the subscription is automatically renewed, and the subscriber is charged, on a recurring basis…
A California appeals court has allowed a putative-class-action complaint to proceed against an online retailer based on a consumer’s allegation that the retailer falsely advertised price discounts and that the consumer would not have purchased the items if he knew he was not receiving a discount. In Hansen v. Newegg.com Americas Inc., Case No. B271477, the Fifth Appellate District of the California Court of Appeals reversed the lower court. The lower court had dismissed for…
  Takeaways: Health-related advertising claims must be supported by competent and reliable scientific evidence, generally consisting of human clinical trials that are methodologically sound and statistically significant to the 95% confidence level. Advertising claims must be clearly expressed as ingredient claims if the substantiation addresses only the efficacy of the ingredients in the product, not the product itself.…
Facebook has implemented a new policy regarding ads related to cryptocurrency. While Facebook previously banned all such ads, under the revised policy effective June 26, advertisers of cryptocurrency content may apply online for approval of their advertisement. “Cryptocurrency content” is considered by Facebook to include “any advertisements or content in any way related to cryptocurrency”. In the application, advertisers are asked about their relevant licenses, whether their company is traded on a public stock exchange,…
The NAD recently recommended that Perdue Farms, Inc. modify or discontinue certain TV and YouTube ads about Perdue’s “Harvestland Organic” chicken. Tyson Foods, Inc. challenged the Perdue ads before the NAD, arguing that they broadly communicated that all of Perdue’s chickens are “happy” and raised “organically” (free-range, non-GMO, 100% vegetarian-fed, and raised without antibiotics). Perdue responded that ads only communicated claims about Perdue’s “Harvestland Organic” sub-brand. The NAD, however, viewed the overall “net impression” conveyed…
In the first half of 2018, on the heels of the Equifax breach last fall, a number of state legislatures addressed privacy and data security issues, and in particular, data breach notification. Most notably, Alabama and South Dakota passed their first breach notification laws, making it so there now breach notification laws in all 50 states. In addition, Arizona, Louisiana, Colorado and Oregon updated their existing laws. Both the new laws and the revisions reflect…
The annual ABA Antitrust Law Spring Meeting held in Washington, D.C., last month included sessions on consumer protection. Key takeaways include the following: The FTC Act remains broad in scope, claims about products treating serious diseases must be supported by clinical testing, and companies promoting their products as “Made in the USA” must meet the “all or virtually all” standard, meaning that all significant parts and processing that go into the product must be of…
An increasing number of individuals who are deaf or hard of hearing are challenging the absence of closed captioning as a violation of the Americans with Disability Act (ADA). Companies placing video on their websites should consider whether they need to include closed captioning under the ADA. Website accessibility under the ADA continues to be a trending legal area, with multiple complaints filed against companies each week. Although most complaints allege that a website violates…