On November 5, 2019, the United States Federal Trade Commission (“FTC”) issued a guide entitled “Disclosures 101 for Social Media Influencers” and a video “Do you endorse things on social media?” to alert influencers to the laws governing endorsement or recommendation of products or services and provide social media influencers with “tips on when and how to make good disclosures.” The FTC’s written guide states that “[a]s an influencer, it’s your responsibility to make these disclosures, to be familiar with the Endorsement Guides, and to comply with laws against deceptive ads.” The guide explains to influencers that disclosures must be made when an influencer has a “material connection,” that is “any financial, employment, personal, a family relationship with a brand” and that receiving “free or discounted products or other perks” requires a disclosure. In addition, the FTC notes that “tags, likes, pins, and similar ways of showing you like a brand or product are endorsements.” The FTC guide also instructs influencers that “[i]f posting from abroad, U.S. law applies if it’s reasonably foreseeable that the post will affect U.S. consumers. Foreign laws might also apply.” The FTC notes that disclosures must be in simple and clear language that is placed “so it’s hard to miss” and should be placed with the endorsement itself. Disclosures that “appear only on an ABOUT ME or profile page, at the end of posts or videos, or anywhere that requires a person to click MORE” will not be sufficient. The FTC gave the following guidance with regard to endorsement posts in photographs, video and live streaming: Continue Reading
Sunday Riley launched her skincare firm Sunday Riley Modern Skincare, LLC (“SRMS”) in 2009 and its skincare products, including Good Genes, Power Couple, U.F.O., C.E.O., Luna and Tidal, have enjoyed tremendous success, having been featured, promoted, and sold online through Sephora and its website, www. Sephora.com. On October 21, 2019, the Federal Trade Commission (“FTC”) announced a consent order in an action for violation of Section 5 of the FTC Act against Ms. Riley and SRMS for posting false reviews of its Sunday Riley products and falsely representing that the false reviews reflected the opinions of ordinary customers of the products. The FTC’s proposed continuing consent order provides: (1) Riley and SRMS are prohibited from misrepresenting the status of any endorser or person providing a review of a product, including misrepresenting that an endorser or reviewer is an independent or ordinary user of the product; (2) Riley and SRMS are required to clearly disclose any unexpected material connection between SRMS and anyone reviewing a product; (3) Riley and SRMS are required to instruct employees, officers and agents as to their responsibilities for disclosing their connections to SRMS and any Sunday Riley product they endorse and that SRMS obtain signed acknowledgments from any endorser; and (4) Riley and SRMS are required to submit compliance reports to the FTC within one‑year of the order and to create records for twenty years and retain them for five years. Continue Reading
UPDATE: On October 12, 2019, Governor Gavin Newsom signed AB 44 and Governor Newsom stated in social media: “I just signed #AB44 — one of the strongest animal rights laws in US History — making California the first state in the nation to ban new fur sales.” The ban goes into effect in 2023 and fur retailers have more than two years to sell any furs they still have in their inventory. After the law goes into effect, manufacturers and retailers will face fines of $500 to $1,000 for every violation of the law.
Before the 1849 California Gold Rush, American, English and Russian fur hunters were drawn to Spanish (and then Mexican) California in a California Fur Rush, to exploit its enormous fur resources. Before 1825, these Europeans were drawn to the northern and central California coast to harvest southern sea otters and fur seals, and then to the San Francisco Bay Area and Sacramento–San Joaquin River Delta to harvest beaver, river otters, marten, fisher, mink, gray fox, weasels, and harbor seals. It has been said that California’s early fur trade, more than any other single factor, that opened up the West to world trade. Continue Reading
Section 653o of the California Penal Code makes it a misdemeanor to import into the state for commercial purposes, to possess with intent to sell, or sell within the dead body or a product thereof, of a variety of animals. Commencing on January 1, 2020, Section 653o(b)(1) shall make it “unlawful to import into this state for commercial purposes, to possess with an intent to sell, or to sell within the state, the dead body, or any part or product thereof, of a crocodile or alligator.” This bans any shipment of alligator or crocodile into, possession of alligator or crocodile with an intent to sell, or to sell within California. A number of bills to either delay the effectiveness of the law or repeal it recently have been killed or tabled by the California Legislature. Continue Reading
On March 4, 2019, the United States Supreme Court held unanimously that “a copyright claimant may commence an infringement suit … when the Copyright Office registers a copyright.” Fourth Estate Public Benefit Corp. v. Wallstreet.com, LLC. (Slip. Op. at p. 1 (syllabus)). The Court also held unanimously that, upon registration of the copyright, “a copyright owner can recover for infringement that occurred both before and after registration.” Id. This decision resolves a long-standing circuit split between the application approach, which allowed a copyright owner to sue for infringement upon submission of a copyright application, and the registration approach, which allows an infringement suit to proceed only after the Copyright Office granted the registration. Continue Reading
On November 20, 2018, the United States Federal Trade Commission (“FTC”) proposed two FTC consent orders against two Georgia-based companies, Creaxion Corporation (“Creaxion”) and Inside Publications, LLC (“Inside”) and their principals concerning the promotion and advertising of Health Pro Brands, Inc.’s new FIT Organic mosquito repellant during the 2016 Zika virus outbreak and allegations that they had misrepresented paid athletes’ endorsements as independent consumer opinions and commercial advertising as independent journalistic content. The proposed FTC consent orders prohibited Creaxion and Inside from making any false representations in the future and required that they ensure all endorsers disclose all material connections going forward and monitor compliance by any endorsers. Continue Reading
In a victory for online retailers, a New York federal court recently dismissed three putative class action lawsuits brought on behalf of website visitors whose mouse clicks, keystrokes, and electronic communications were tracked by a third-party marketing company. The cases were filed against three e-commerce retailers—Casper (a mattress manufacturer and retailer), Tyrwhitt (a men’s clothing company), and Moosejaw (an active outdoor retailer)—and against a marketing company named NaviStone. NaviStone offers computer code that allows e-commerce retailers to determine the identities of consumers who visit their websites and track their online behavior. The plaintiff alleged that the code offered by NaviStone, and embedded in the retailers’ websites, functioned as an illegal wiretap enabling the retailers and NaviStone to “spy” on website visitors in real time as they browse. The lawsuits alleged violations under the federal Electronic Communications Privacy Act (ECPA), the federal Stored Communications Act (SCA), and New York General Business law (NYGBL).
As described in a previous blog post, New York’s 2019 Budget created significant new responsibilities for employers in the state with respect to sexual harassment prevention. As of October 9, 2018, all employers in New York State are required to: (i) circulate a policy prohibiting sexual harassment that complies with state requirements; and (ii) conduct annual sexual harassment training for all employees in accordance with state standards. Continue Reading
It is no secret that the world of fashion is full of surprises. On Monday, June 4, 2018, Kim Kardashian West won the Council of Fashion Designer of America (“CFDA”) first-time Influencer Award and commented: “I’m kind of shocked I’m winning a fashion award when I’m naked most of the time.” Fashion advertising and marketing rely more and more upon social media and influencers for the ability to connect with consumers in an authentic manner. As a result, fashion models and celebrity influencers are in high demand. Now, a new group of unique model influencers are taking the fashion world by storm. Yet, it is unlikely that any of these new influencers will ever win the CFDA Influencer Award. Continue Reading
On June 21, 2018, the United States Supreme Court issued its decision in South Dakota v. Wayfair, Inc., overturning a 26 year-old decision holding that a retailer must have a physical presence in a state in order to have a sales or use tax collection obligation. The Wayfair decision has an immediate and major impact on retailers of all sizes, but also leaves open numerous unanswered questions.