Wacoal America and Norm Thompson, both manufacturers of women’s shapewear, recently entered into consent orders to pay sums of $230,000 and $1.3 million, respectively, and agree to not make any false and misleading future claims that their products cause weight loss, fat loss or eliminate cellulite as the result of FTC enforcement action as the result of making unsubstantiated weight-loss claims. This is yet another reminder that any claims made in advertisements or marketing materials as to weight-loss, fat-loss or cellulite elimination must be substantiated by a scientific study or the manufacturer may face an FTC action and potentially substantial fines.
The United States government in conjunction with the Bloomberg Philanthropies held the first ever US-Africa Business Summit on August 4–6, 2014 to discuss trade opportunities in Africa. A primary focus of discussion at the summit was the Africa Growth and Opportunity Act (AGOA), a regulation passed in 2000 to implement trade benefit provisions for sub-Saharan Africa. A major benefit of AGOA is allowing duty-free import of textile and apparel materials from beneficiary countries in Africa to the United States. This provision is currently set to expire on September 30, 2015 however, stakeholders in the textile and apparel industry, both in the US and Africa, are now advocating for its extension.
Brands that create a credible emotional connection with the consumer demand higher consideration and establish and build brand loyalty. This program will discuss new legal strategies to apply and pitfalls to avoid in light of the key branding trends in the New Millennium with an update on recent developments in 2014.
Please join Sheppard Mullin for our monthly Third Thursday Emerging Company Webinar Series educating entrepreneurs and emerging companies on the key legal issues they face during the growth of their companies. These complimentary 1-hour webinars are held through WebEx on the third Thursday of the month at noon. They will have both an audio and PowerPoint component.
After more than a decade of trying to gain traction on Capitol Hill, brick-and-mortar retailers could be close to leveling the playing field with online merchants if the Marketplace and Internet Tax Fairness Act (“MITFA”) Senate bill proceeds.
Consumers frequently reveal personal information about themselves through a variety of daily online and offline activities. For fashion designers and retailers, this consumer information represents a valuable tool to identify, target, and expand customer advertising and messaging. This information can be utilized by employing a data broker, or a company who aggregates consumer information and do provide information about the relevant consumer marketplace. Data brokers collect, maintain, manipulate, and share a significant amount of data about consumers without ever directly interacting with them. While data brokers afford a major advantage for retailers, including fashion companies, they also raise privacy concerns for the consumers that data brokers profile. The Federal Trade Commission (“FTC”) recently issued a report summarizing the results of its study on the activities of nine data brokers, and recommended that Congress consider enacting legislation to make data broker practices more transparent or to give consumers greater control over the personal information that is collected about them and shared by data brokers. This post summarizes the portions of the FTC’s report that are most relevant for fashion retailers and designers.
Since early 2014, the Federal Trade Commission has charged at least fourteen U.S. businesses in varying industries, from fashion to telecommunications, for falsely claiming to participate in the US – EU Safe Harbor privacy. Three of the companies were also charged with similar violations of the US – Swiss Safe Harbor. The Safe Harbor provisions were designed to provide U.S. and European organizations a legal, cost-effective means for transmitting consumer data outside of European countries, which maintain strict data privacy laws. On June 25, 2014, the FTC reported approval of final orders settling charges of US – EU Safe Harbor violations against the fourteen entities.
L’Occitane Inc’s advertisements for its topically-applied body sculpting almond extracts seemed straightforward: “Almond Shaping Delight 3 out of 4 women saw firmer, lifted skin. This luxuriously lightweight massage gel instantly melts into the skin to help visibly refine and sculpt the silhouette” and “Almond Beautiful Shape Trim 1.3 inches in just 4 weeks. This ultra-fresh gel cream helps to visibly reduce the appearance of cellulite, while smoothing and firming the skin.” [see FTC complaint and exhibits]
West Hollywood, California’s controversial law banning the sale of fur within city limits survived a legal challenge by a luxury retailer last month. A federal court dismissed the action brought by Mayfair House Inc., a retailer that sells high-end clothing products, including products made wholly or partly of animal fur, challenging the ordinance as unconstitutionally vague and arbitrary in violation of the Due Process and Equal Protection Clauses of the 14th Amendment of the U.S. Constitution and violating state laws preventing the City from enacting wildlife-related ordinances.
The Federal Trade Commission (“FTC”) enforces federal labeling requirements that require manufacturers, importers, sellers and distributors of certain textile and wool clothing to accurately label their products. For example, FTC rules require that manufacturers indicate the country of origin and fiber content in their clothing. In addition, the Care Labeling Rule requires that manufacturers and importers attach “care labels” to garments and certain piece goods.
Native advertisements represent not only an increasingly popular and effective means of promotion for marketers, it also represents a massive headache for the Federal Trade Commission (“FTC”). Native advertising, also known as corporate content or branded journalism, is marketing material that is designed to mimic the look and feel of the host website. While the look of native advertisements differs depending on the host website, the underlying goal for marketers is the same – make the advertisement look and feel like editorial content.