For companies that devote entire departments to the sole task of maintaining the company website and social media platforms, the last item on their Internet teams’ favorite-thing-to-do list is likely “deal with legal issues.” Due to rapidly changing technology and laws that scurry to keep up, the frustrations are understandable, and most often come to a head on the topic of privacy.

Last month, the FTC attempted to keep pace with technology shifts and released its most recent amendments to the Children’s Online Privacy Protection Rule (also known as the “COPPA Rule,” as it is based on the requirements of the Children’s Online Privacy Protection Act [“COPPA”]), which will become effective July 1, 2013. Initiated in April of 2000 (light-years ago in terms of technology progression), the COPPA Rule requires operators of Web sites to take varying privacy precautions based on the maturity of the sites’ audience. Revisions to the rule arrived in the form of modifications to certain definitions, and implementation of newer or stronger methods for safer surfing.

First, the COPPA Rule update redefines certain terms including “operator,” “Web site or online service directed to children,” and “personal information.” The term “operator” is now defined as a conductor of a child-directed site or service that allows outside services to collect personal information from visitors. In a related vein, “website or online service directed to children” means those services having actual knowledge that they are collecting personal information through a site geared towards children. “Directed at children” sites are now also required to provide notice and obtain parental consent for users under the age of thirteen. Possibly the most dynamic of defined terms, however, is “personal information.” Due to the vast increase in big brother technology, “personal information” has been revamped to include geolocation data, and other more sophisticated identifiers, on top of the more commonly known photos, videos, and audio files that contain a child’s image or voice.

Next, the new COPPA Rule clarifies the method that operators must utilize to notify parents of data collection. When operators collect personal information from children, they must not only alert parents beforehand that they are collecting the data, but must also place all pertinent information about the collection in the very beginning of the notice. On the bright side for operators, the new Rule also comprises of new ways to obtain consent from parents. Some examples of updated modes of permission include video conferencing with operators, and scanned parental consent forms.

Furthermore, the COPPA Rule now requires stronger practices to maintain the security of children’s information after collection. If an operator releases the data collected from children to a third party and/or service provider, the operator must take reasonable measures to verify the third party’s aptitude for protecting the information. Cutting error time is also key; therefore, operators may only retain the collected information for as long as reasonably necessary.

Amazingly, no matter how quickly a new version of the COPPA Rule enters the scene, it is already behind the times. Paralleling this notion is the inevitability of children surpassing their parents in their level of technological ability. Thus, it may be difficult to keep up with the best practice in online data collection, but it would be prudent for those involved to try.

For more information, visit: http://www.ftc.gov/privacy/coppafaqs.shtm

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As the saying goes, why work hard when you can work smart?  Advertisers have adopted this approach by abandoning the one-size-fits-all approach and tailoring ads to specific target audiences.  One obvious example is your inbox:  If you receive emails from companies like Gilt Groupe or Rue La La, it is a safe assumption that you are interested in finding great fashion at discount prices.  Perhaps then you will notice a banner ad for similar sites like Net-A-Porter, or Overstock.com.  That ad was chosen for you based on your previously-expressed interests in similar sites.  Browser tools like cookies that store information on the websites you visit help advertisers form a profile to predict which advertisements would be most relevant to you.  This profile information allows advertisers to more effectively reach their desired audiences, and results in you seeing ads that (should be) interesting and relevant to you.  Such practices are called interest-based advertising, targeted advertising, or online behavioral advertising (OBA).  As defined by the Digital Advertising Alliance, OBA is “the practice of collecting data from a particular computer or device regarding web viewing behaviors over time and across non-Affiliate websites for the purpose of using such data to predict user preferences or interests to deliver advertising to that computer or device based on the preferences or interests inferred from such Web viewing behaviors.”

But with identity theft, hacking and cyber data breaches that are often front-page news, how can consumers be sure that OBA data is collected and used in a responsible manner?  What are the options for consumers who do not wish to have their online activity tracked and compiled for third-party use?  What are the pros and cons of OBA-generated profiles?

The Digital Advertising Alliance (DAA) is an organization dedicated to de-mystifying OBA practices and seeks to establish standards for companies engaging in this type of advertising.  The DAA is a consortium of leading advertising and marketing associations that share a commitment to establish best-practices in OBA, thus increasing consumer confidence in OBA’s use and application (see a list of participating associations here).  Like the National Advertising Division, the DAA is a self-regulatory group that seeks to monitor advertising practices and ensure transparency.  In 2009, they released the Self-Regulator Principles for Online Behavioral Advertising (Principles) which emphasize:

– Education for consumers and businesses about online behavioral advertising and the Principles.

– Transparency about data collection and use practices associated with OBA, providing consumers with clear, meaningful and prominent notice through multiple mechanisms.

– Consumer Control over whether data is collected and used or transferred for OBA purposes, provided through easy-to-use consumer choice mechanisms.

– Appropriate Data Security for, and limited retention of, data collected and used for OBA purposes.

– Obtaining consumer consent before a Material Change is made to an entity’s OBA data collection and use policies unless that change will result in less collection or use of data.

– Limitations of the collection of Sensitive Data collected and used for OBA.

– Accountability for entries collecting and using data for OBA purposes, including mechanisms for enforcement of the Principles.

In further emphasizing the Principles of Consumer Control, Education and Transparency, the DAA has created the Advertising Choice Icon, as part of their Ad Choice Program.  You may have noticed this, a small blue triangle with an “I” in its center, in the corner of a banner, pop-up advertisement, or pages where your browsing data will be used for advertisers.  It is a disclosure technique used by advertisers to indicate that OBA is occurring and showing consumers that the advertiser participates in the DAA Program.  When you roll your mouse over the AdChoice Icon, a clear disclosure statement appears detailing the data collection, explaining how consumers can control the tracking options and how to limit or deactivate data collection.  The AdChoice Icon has a twofold benefit:  consumers become aware of the companies and sites that are tracking them, and understand available options to prevent their privacy.  By disclosing such information, companies and sites increase consumer confidence in their products and services, and hope that this transparency will bolster their bottom lines.  The AdChoice Program boasts a long list of participating companies (see a complete list here) such as advertising agencies, retailers and advertising networks.   Its website – http://www.youradchoices.com/ – lists detailed instructions on how to customize browser settings and educate both companies and consumers on the advantages of OBA.

But don’t mistake the DAA as a regulator in name, not spirit.  Partnered with the Better Business Bureau’s Advertising Self-Regulatory Counsel, there have been several instances where the organizations have requested clarification of a company’s OBA practices to ensure there is no consumer confusion.  Recent examples have been with the brand-new Facebook Exchange platform, where a company with its own advertising data could then reach out to consumers when they log on to Facebook.  It was determined that Facebook could improve the transparency of its practices in this medium by making subtle changes to its ads, like adding the AdChoices Icon and changing some disclosure language (read the whole decision here).  Another example is BlueCava, an advertising company that identified and tracked users across devices and associated (or “householded”) them together.  The Advertising Self-Regulatory Counsel found that BlueCava did not clearly state to consumers that it was tracking their activity across devices, nor did they specify if opt-outs would be honored across devices.  BlueCava responded to this inquiry by synchronizing its opt-out features across devices and amending its disclosures to clarify its practices (read the decision here).

The DAA has also been a vocal advocate of OBA practices in light of the popular do-not-track movement (as I have detailed in a previous post), and with privacy concerns at an all-time high, remains dedicated to providing consumers comprehensive information so they can make educated choices about how to tailor their online experiences.

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In recent years, many consumers have been looking to purchase all natural organic products. However, what does natural mean? To many, this word evokes images of fresh strawberries just picked out of the patch, herbs cut out of the garden, or fresh made milk from a cow. Yet, most of these images are not what come into play with natural claims in the advertising industry. To many in this field, the questions that come about include: How much of a product has to be natural in order to claim that the product is natural?, Can something be claimed as natural if there are trace amounts of synthesized elements in it? or, Is a GMO natural? All of these questions seem to lead to one question: Is any product advertised as all natural, ever really “all” natural? The answer is probably a resounding no. It is hard for the industry to make the best hair care product with no chemical binding element.

The focus in advertising law is not on what companies are putting into their products though, but how the consumer is being deceived by the premise stated above. If the consumer believes that they are buying shampoo with just strawberry extract, but the company has put in chemicals to make is soap, how can the customer know what they are about to buy? A lot of time they don’t question it, but as of late, this question has been the forefront of class action suits.

Currently, Tropicana is being singled out in California for creating a deceptive advertisement. The company states that it’s orange juice is 100% natural and not from concentrate. However, consumers are stating that the juice is actually processed, and not as natural as the company has marketed it out to be. They are particularly attacking the deceptive advertisements with the straw in the orange, which evokes images of actually drinking juice straight from the fruit. This case is just a drop in the proverbial bucket for natural claims though. California is becoming the new battle ground for these suits, which has served as a past venue for past class action cases (Big Tobacco). Ramifications will be felt by advertisers. To avoid large settlements, companies will have to figure out what all natural actually means, and how to abide by it. To discover more about this topic, come the adnauseum’s spring event on April 2! Information is on the home page of the site.

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On Super Bowl Sunday, some people tune in to watch the Big Game, while others tune in for the flood of creative commercials. This year, Samsung decided to use this as an opportunity to poke fun at itself, the NFL, and teach viewers a lesson in trademark law.

In one commercial, actors Paul Rudd and Seth Rogen meet with a Samsung official about being spokespeople for the new Galaxy phone. After the businessman asks them for ideas, the actors try to offer suggestions but are quickly shushed from uttering the words, “Super Bowl,” “Ravens” and “49ers.” Ultimately Rudd and Rogen have agreed to sponsor the Galaxy phone during the “Big Plate” where the Baltimore “Black Birds” will be playing the San Francisco “Fifty-minus-oners.”

This was a tongue-in-cheek reference to Samsung’s patent infringement case against Apple, but is also indicative of another field of Intellectual Property- trademarks. So why could the actors not utter these three key words? This is because the National Football League owns the trademark for Super Bowl. In fact, the NFL owns eight registered trademarks to protect this word and associated references, including trademarks for the words, “Pro Bowl” and “Super Sunday.” This protection enables the NFL to take legal action against any third party using “Super Bowl” to sell goods or services. This includes using the term in any advertisement or promotion that has not been sanctioned by the NFL, including sweepstakes and contests. The reason why this protection is important to the NFL, is because advertisers pay enormous licensing fees for the right to use the term, “Super Bowl” and these terms would lose their economic value if every one could use it.

The NFL vigorously protects their trademarks, and will pursue legal action against third parties or pressure third parties to abandon similar marks. Last February, Roy Fox registered the terms “Harbowl” and “Harbough Bowl” after realizing that he could profit if the two brothers faced each other in the Super Bowl. Unfortunately, after spending $1,000 to register the marks, Fox received a letter from the NFL stating that “Harbowl” could be confusingly similar to the registered mark of Super Bowl and was asked to abandon his marks. Though Fox offered to abandon the marks in exchange for the NFL to reimburse him for the cost of registering the marks, some Colts season tickets, and an autographed photo of league commissioner Roger Goodell, the NFL refused and threatened to oppose his trademark registration. Though there is some debate about whether the NFL could have been successful if it pursued legal action, on October 24, 2012, the man abandoned his marks.

So why can I refer to the Super Bowl in this post? A person may use a trademarked word for news stories, discussions, and nominative fair use. This allows third parties to use a trademarked term when there is no other way to refer to it. The mark may only be used to the extent necessary to identify it, and it cannot suggest a false connect or sponsorship to the trademark holder. However, it is important to know that nominative fair use does not extend to commercial use. If I used the word Super Bowl to sell pizza, then this would be an infringement. Many advertisers avoid infringing on the trademarked term Super Bowl, by referring to it in abstract terms like, “The Big Game,” or Samsung used creativity and humor.

Now that Samsung has dodged the bullet by referring to the Super Bowl as “El Plato Supreme,” I am excited to see how they will have Rudd and Rogen avoid using other trademarks such as “March Madness.”

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Subway Sandwich Shop Inc. is currently facing a class action lawsuit over the length of their “$5 Footlong” sandwiches.   Complainants allege that Subway’s supposedly footlong sandwiches are coming up short.  Size really does matter…when a company premises their entire ad campaign on the length of their sandwich.

Subway’s ads claim that customers can buy a footlong sandwich for five dollars, but in a complaint filed Thursday in a Burlington County, N.J., Superior Court, John Farley and Charles Pendrack alleged that footlong sandwiches ordered in 17 different Subway shops all measured less than 12 inches in length, according to reports by ABC News and the Associated Press.  The class action lawsuit is seeking more than $5 million in damages.

“Despite the repeated use of uniform language by Subway stating that this sandwich is a footlong, the product in question is not, in fact, a foot long,” the New Jersey class action lawsuit states. “Rather, this product consistently measures significantly less than 12 inches in length.”  The measured footlong sandwiches were mostly between 11 and 11.5 inches although some were even shorter.

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In recent years, people have been starting to assess the validity of beauty and fashion advertisements. These advertisements depict flawless celebrities or models with a company’s product. This is done through the use of Photoshop, a computer program that can alter a person’s features. Some examples of Photoshop uses are to erase acne, get rid of unwanted fat, and make the eyes of an endorser wider. However, are these advertisements deceiving the consumer into believing that he or she can achieve perfection?

According to CNN, Julia Bluhm has made it her mission to get a popular teen magazine, Seventeen Magazine, to stop using this editing program for it’s  advertisements. Even though Seventeen Magazine is adamant about not using Photoshop, will other magazines follow? Additionally, will regulations be made stop companies from using it at all? In other countries such as France and Israel, this push for regulation has already begun. In France, a mother of two is pushing a bill through Parliament to limit the use of Photoshop because of the negative effects that it has on young girls. Further, Israel has already passed a law that states that if a company is using Photoshop that it must state clearly on the advertisement that the image has been altered. Will the United States be the next to follow suit?

The National Advertising Division has recognized the need for regulation. However, NAD wants the companies to regulate themselves with the use of Photoshop. However, will self-regulation work? At the moment, companies such as Dove are pioneering this concept with their Real Beauty Campaign by using real women in its advertisement without the use of Photoshop. Thus, the consumer can decide if he or she would rather buy from a company that promotes real women or Photoshopped versions of models. This may lead to the self-regulation that NAD is pushing for because other companies will then follow suit in order to stay competitive in the market. Time will tell if this works, or if an Israel type law is needed to protect the consumer from deceitful practices.

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It’s no secret that consumers are focused on their health these days which has resulted in an increase in demand for products that are “healthy” and “all-natural.”  If you quickly browse the grocery store aisles it may appear as though the food and beverage industry has responded with a plethora of new, improved healthy (or at least healthier) options.  Of course, a closer inspection reveals some legitimate questions and concerns regarding the industry’s use of these claims.

For example, is it misleading to refer to a product as  “all-natural” when when it contains high-fructose corn syrup, a sweetener that is derived from corn BUT comes from genetically modified corn and is highly processed?

The FDA and USDA have joint regulatory authority over food and nonalcoholic beverages, and, the FTC regulates food advertising.  Yet, despite all of this regulatory oversight, there is still no hard-and-fast definition of the word “natural.”  This is in stark contrast to the “organic” label, whose use is strictly regulated by the USDA.  Only foods that have been grown and processed according to USDA National Organic Program guidelines may be labeled with the “Certified Organic” seal or face an $11,000 fine per violation.

As a result of this policy gap and increasing consumer confusion we have seen a lot of legal activity surrounding natural claims.  For instance, California residents recently voted on the hotly-contested Proposition 37, which would have required disclosure of the use of Genetically Modified Organisms (GMOs) in products as well as limitations on labeling products as “natural”.

In addition, new class-action lawsuits are continuously filed against food and beverage companies that label products as “natural” alleging fraudulent labeling practices and calling for the cessation of product sales.  Among other things, these lawsuits claim that companies are deliberately misleading consumers into thinking their products are healthier than they actually are.  Among the companies accused of such practices are conglomerates such as ConAgra Foods, PepsiCo and General Mills.  For the companies, the most frightening aspects of these suits are the damages:  the plaintiffs wish to tie the damages to product sales, which could result in billions of dollars should plaintiffs’ efforts prove to be successful.

Critics of the suits claim that the attorneys involved – many of whom were leading players in the Big Tobacco suits of the 1990s – are looking for the next big payday.  California is known for its robust consumer protection laws, and the suits were intentionally filed there, both due to those protections and to take advantage of the Proposition 37 battle.  However, it remains to be seen if the suits will survive past the pleadings or class certifications stage, mainly because it will be a significant burden to meet plausibility and reliance standards.  (For an in-depth review of defenses available to food companies in this context, see here).  Regardless of the result, these actions are sure to promote increased public dialogue and awareness over labeling disclosures and requirements.

For information on the USDA Organic Program, see here.
For information on the California labeling suits, see here.

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Remember Google Buzz? No? Just a little, maybe? You might have had one or two friends who used it in 2010, or more likely you clicked on it accidentally while trying to find something in your spam folder.  To learn more about Google “Buzz” have a quick peak at this Wiki page: http://en.wikipedia.org/wiki/Google_Buzz

As you may have gleaned Google Buzz is no more.  While the failure of Google Buzz as a social network may not be big news we can learn from Google’s mistakes with respect to consumer privacy.

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Obesity is a rising concern in the US. Every year more Americans are considered overweight or obese – including children.  According to the American Psychology Association, childhood obesity rates have doubled in the last twenty-five years. Why is this happening? Some  claim that children are just not getting enough exercise because they are spending less time playing outside, and more time playing video games and watching television. Others say that less physical activity and too much television implicate another component of the childhood obesity epidemic – advertising.

According to a study conducted by the American Psychology Association, children between the ages of eight and twelve are exposed to a staggering 7,609 advertisements per year.  While the children’s food industry has emphasized its recent efforts to clean up its act (when I was a child the majority of advertisements I saw were for fast foods or highly processed foods) many argue that the industry is still making candy, sugary cereals, soda and fast food look delicious and “cool” to eat. Is this a deceptive practice that is luring the country’s children into thinking that these foods are potentially good for them?

According to the New York Times, the Federal Trade Commission has recently created a guideline that food companies are “requested” to follow when creating their advertisements to children. The FTC wants these companies to have food that contains a) healthy ingredients; and b) less sugar. Of course, it is important to note that the food industry itself has recognized that change is necessary; In 2006 the food industry formed the Children’s Food and Beverage Advertising Initiative in response to public criticisms regarding its food marketing practices.  The initiative is an effort by the industry to clean up the market place and self-regulate child-directed food advertising.

While it is great to hear that the government and the food industry are focusing on the health of our nation’s children, many critics are still pointing their fingers at parents.  These critics say that the diet starts with the parents, noting that the parents control the majority of the food purchased for the home.  I was pleased to see that just one Google search demonstrated that parents across the country ARE joining forces to push for things like healthier school lunches.  I admit that we still have a challenge ahead of us but perhaps we are  finally on our way to a healthier country – what do you think?

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