Advertising Law

Complimentary TCPA Update Webinar: The Year in Review and What Lies Ahead

One year has passed since the implementation of the Federal Communication Commission’s revised Telephone Consumer Protection Act (TCPA) rules. To mark this anniversary, Manatt, Phelps & Phillips, LLP and Bloomberg BNA invite you to join us for a complimentary webinar on October 16, 2014 that will address important legal and case law developments, highlight enforcement trends and discuss solutions that will help you remain ahead of the curve in meeting TCPA challenges.

Marc Roth and Donna Wilson, co-chairs of Manatt’s TCPA Compliance and Class Action Defense Group, and moderator Katie Johnson, legal editor on Bloomberg BNA’s Privacy & Security Law Report, will survey important and trending TCPA developments over the past year and provide practical guidance for the future. Topics to be covered include FCC activity, the explosion of TCPA class actions, vicarious liability, capacity, liability exposure and settlements, and revoking consent.

This no-cost, live webinar will be held on Thursday, October 16, 2014 at 3:00 – 4:30 p.m. ET.

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News from the FTC: Contest Winners and New Fees

The Federal Trade Commission ended summer with multiple announcements, including the winners of the agency’s robocall contest and an increase in fees for telemarketers seeking access to phone numbers on the federal Do Not Call Registry.

Earlier this year, the FTC announced it was taking a second stab at holding a contest intended to think creatively about stopping robocalls. Held at the DEF CON 22 hacking conference in August, the “Zapping Rachel” contest asked participants to design a robocall honeypot that would attract robocalls and provide insight for enforcement authorities and researchers.

Sixty teams and individuals registered for at least one of the three phases of the contest. A three-judge panel scored submissions based on functionality, accuracy, innovation, and creativity, selecting a winning entry for each phase and designating two honorable mentions for the final phase.

In the first phase, contestants were challenged to build a honeypot that identified inaccurate information in incoming calls (like spoofed caller IDs) and determine which calls were likely to be robocalls. In the attacker phase, the winning contestant was able to circumvent an existing honeypot and prevent it from collecting information about incoming calls. And in the final phase, the winning participants analyzed call data from an existing honeypot and developed algorithms to predict which calls were likely to be robocalls.

The winners will receive a combined total of $12,000.

In other news, the agency announced that a new fiscal year means new fees.

As of October 1, telemarketers will pay $60 – an increase of $1 – for access to Registry numbers in a single area code. For access to all area codes nationwide, the new total of $16,482 reflects a rise of $254.

To ensure that they do not call those numbers listed on the Registry, all telemarketers are required to download the list. The first five area codes are free, but telemarketers must subscribe each year for Registry access. Fees are dictated by the Do Not Call Registry Fee Extension Act of 2007.

To read more about the robocall contest entries, click here

To read the Federal Register notice about the fee increase, click here

Why it matters: “We were thrilled with the level of interest and participation,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement about the robocall contest. “We look forward to furthering our dialogue with this community on the development of robocall honeypots, and any other tools that can help win the fight against illegal robocalls.”

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Google to Pay $19M Over In-App Charges

Continuing its focus on in-app purchases, the Federal Trade Commission reached a $19 million deal with Google, Inc. to settle allegations the company billed consumers for purchases made by children.

The agency has already taken action against Google competitors, settling similar charges against Apple for $32.5 million and filing a complaint against Amazon in Washington federal court.

According to the FTC, Google violated the Federal Trade Commission Act’s prohibition on unfair commercial practices by billing consumers for in-app purchases made by children without the authorization of the account holder. Beginning in 2011, apps downloaded from the Google Play store did not require the entry of a password to make in-app purchases. Google later changed its policy in 2012 to require a password for such purchases but created a 30-minute window during which purchases may be made without a password.

Over the last three years, “many thousands” of consumers complained to Google about unauthorized charges incurred by children making in-app purchases, some reaching hundreds of dollars, the FTC said. The company failed to take appropriate action by typically referring customers to the app developer and internally referring to the issue as “family fraud.”

To settle the action, Google agreed to provide full refunds to parents with a minimum total of $19 million. The company will contact all customers who made an in-app charge to provide information about the refund process. If the total refunds are less than $19 million within 12 months after the settlement becomes final, the balance will be paid to the FTC.

Google also promised to modify its billing practices to require express, informed consent prior to billing for in-app charges.

To read the FTC’s complaint and consent order in In the Matter of Google, Inc., click here

To read the remarks of FTC Chairwoman Edith Ramirez about the settlement, click here

Why it matters: The settlement with the FTC doesn’t end Google’s in-app charge woes, as the company is also facing a consumer class action with similar allegations. The larger lesson for advertisers: the Commission is keeping a close eye on mobile commerce and technology. “We have seen that consumers are increasingly using smartphones and tablets for many beneficial purposes, from communication to entertainment to shopping,” FTC Chairwoman Edith Ramirez said in a statement about the deal. “The FTC is committed to keeping consumers protected as this technology becomes more widely available and used, and that includes ensuring that consumers provide their consent before charges are incurred on their mobile devices.”

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(Social Media) Life After Death: Delaware Enacts First Postmortem Law

What happens to social media accounts once the user dies? One state finally has the answer.

In August, Delaware enacted the first law explicitly granting executors the power to deal with a deceased’s social media accounts. The Fiduciary Access to Digital Assets and Digital Accounts Act dictates that after death a person’s digital assets – including social media and e-mail accounts – become part of his or her estate, accessible to heirs just like any other assets.

The statute defines “digital assets” broadly to cover “data, texts, e-mail, audio, video, images, sounds, social media content, social networking content, health care records, health care insurance records, computer codes, computer programs, software, software licenses, databases, or the like, including . . . usernames and passwords.”

An exception was carved out of the statute for digital accounts of an employer regularly used by an employee in the usual course of business. A testator can also dictate that an account should be closed, left alone, or not accessed by the estate and heirs.

Upon a valid written request, any company that controls a person’s digital assets must provide the executor for the estate information necessary to gain access to the assets (such as username and password), and the law grants the company controlling the digital assets immunity for complying with valid requests for account access. Contrary provisions in service agreements or privacy policies are void.

The new law takes effect January 1, 2015.

To read the Fiduciary Access to Digital Assets and Digital Accounts Act, click here.

Why it matters: Delaware’s law applies only to residents of the state, one of the smallest in the nation. It remains to be seen whether other states will follow Delaware’s lead and enact their own versions of the model legislation adopted by the Uniform Law Commission earlier this year.

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State VPPA Applies to Magazines, Court Rules

In an expansive decision, a federal court judge held that Michigan’s state analogue to the federal Video Privacy Protection Act applies to more than just videos in a putative class action suit brought by a consumer against a magazine publisher.

Deborah Kinder alleged that Meredith Corp. violated Michigan’s Video Rental Privacy Act by disclosing her personal information – including the magazines to which she subscribed – without her consent. Kinder’s subscriptions to Better Homes and Gardens, Ladies’ Home Journal, Family Circle, and Midwest Living revealed information about her “age, income, travel habits, ethnicity, religion, and political affiliation,” she claimed. As a result of the disclosure, she received unwanted commercial solicitations and advertisements.

Contending that the VRPA does not cover magazines, Meredith moved to dismiss.

But U.S. District Court Judge Thomas L. Ludington disagreed.

The statute provides that “[A] person, or an employee or agent of the person, engaged in the business of selling at retail, renting, or lending books or other written materials, sound recordings, or video recordings shall not disclose to any person, other than the customer, a record or information concerning the purchase, lease, rental, or borrowing of those materials by a customer that indicates the identity of the customer.”

Latching on to the phrase “or other written materials,” the court said it was irrelevant that magazines were not explicitly enumerated in the statute and that applying the statute to magazines would not lead to an unexpected result.

“That the VRPA ensures Michigan magazine subscribers enjoy a high level of privacy is not so absurd so as to ‘shock the general moral or common sense,’” Judge Ludington wrote. “Providing a high level of privacy in magazine subscriptions is consistent” with the statute’s legislative purpose “to preserve personal privacy with respect to the purchase, rental, or borrowing of certain materials.”

The court also rejected Meredith’s argument that Kinder failed to state whether she subscribed directly from the publisher or a third party. “Although Kinder did not provide the specific method of subscription, she alleged that she ‘purchased written materials directly from Meredith,’” which was sufficient to survive a motion to dismiss, the judge said.

Judge Ludington dismissed one cause of action based on breach of contract, but he allowed a claim for unjust enrichment to move forward along with Kinder’s breach of the VRPA claim.

To read the order in Kinder v. Meredith Corporation, click here.

Why it matters: Based on the statute’s goal of protecting the privacy of Michigan residents, Judge Ludington took an expansive view of the phrase “or other written materials” to include magazines. The court also characterized Meredith’s argument that personal data has no inherent monetary value and Kinder suffered no loss as “miss[ing] the point.” Because Meredith agreed not to disclose her information and yet allegedly did disclose it, Kinder did not receive the full amount of the benefits she was entitled to based on her subscription, the court said.

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Noted and Quoted: Chief Marketer Turns to Wasserman and Sutton on Implications of FTC’s L’Oreal Settlement

Chief Marketer recently published an article written by Manatt attorneys Ivan Wasserman and La Toya Sutton titled “What the FTC L’Oréal Settlement Means for Beauty Advertising.” In the case, the FTC alleged that L’Oréal lacked the required level of support for advertising claims about its Génifique product, which emphasized the product’s ability to change the nature of women’s skin.

Ivan and La Toya noted that advertising for topical beauty products has rarely been the target of FTC enforcement in the past. However, they cautioned advertisers that “[t]his case should serve as a wakeup call for companies that are under the impression cosmetics might be held to a lower degree of scrutiny by the FTC and other government agencies.”

To read the full article, click here.

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