Advertising Law

Privacy Authorities to App Marketplaces: Post Links to Privacy Policies

An international coalition of 23 privacy regulators released a plea to app marketplaces to act like “a responsible corporate citizen” and make it mandatory for developers to post links to privacy policies prior to download when the app collects personal information.

“While app developers clearly have a responsibility to communicate their privacy practices, mobile operating system developers and other app marketplace operators play a unique and integral role in users’ interactions with apps, made available through their various app stores and app marketplaces,” according to the letter. “The app marketplace is an important consumer landing spot where individuals can search for new apps, read reviews, and access technical information about a particular app prior to downloading it – and this information is made available so individuals can make informed decisions about products in that marketplace.”

The open letter – sent to Amazon, Apple, BlackBerry, Google, Microsoft, Nokia, and Samsung – noted that app marketplaces already communicate important details related to the apps they make available such as app function, age rating, size, and version, and that privacy-related information should also be communicated in order for consumers to make meaningful decisions about which apps to download. While some developers include privacy policy links, the practice is not consistently applied, the regulators wrote.

The letter cited a study released earlier this year, when members of the Global Privacy Enforcement Network conducted a “privacy sweep” to analyze the privacy disclosures of mobile apps. The GPEN privacy regulators examined 1,211 mobile apps and found that “a high number of apps are accessing large amounts of personal information without adequately explaining how people’s information is being used.”

Authorities from countries ranging from Canada and Hong Kong to China and Italy all stated that given the “wide-range and potential sensitivity of the data stored in mobile devices, we firmly believe that privacy practice information (for example, privacy policy links) should be required (and not optional) for apps that collect data in and through mobile devices within an app marketplace store.”

A privacy policy link can “provide a simple and convenient manner for individuals to obtain privacy-related information which they need to be meaningfully informed regarding the collection and use of their data before making the decision to download the app,” the letter stated. “We therefore expect a marketplace operator would put in practice, if it has not already, this advice, and implement the necessary protections, to ensure the privacy practice transparency of apps offered in their stores.”

To read the open letter to app marketplaces, click here.

Why it matters: “Links to privacy policies on the app marketplace appear to be optional but we think developers that collect personal information should be required to provide a link,” Daniel Therrien, Canada’s Privacy Commissioner, said in a statement, suggesting that without a privacy policy, “it’s difficult for consumers to provide meaningful consent.” The letter tracks a similar effort made in California by Attorney General Kamala Harris, who released a set of “privacy best practices” for app developers, platform providers, ad networks, and others in the mobile ecosystem, calling for privacy policies to be made available to consumers prior to download.

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Dole Gets “All Natural Fruit” Suit Tossed

In the continuing battle over “all natural” claims, a federal court judge in California tossed a class action suit, challenging Dole’s advertising of frozen berries and fruit cups with the statement “All Natural Fruit,” holding that the label would not be misleading to reasonable consumers.

The 2012 complaint targeted 38 Dole products bearing the “All Natural Fruit” label, arguing that they contained synthetic ingredients. In prior proceedings, the court removed 28 of the products at issue and certified a statewide class of plaintiffs.

For purposes of Dole’s summary judgment motion, plaintiff Chad Brazil’s allegations were limited to 10 of Dole’s food products – such as Dole Mixed Fruit in 100% Fruit Juice cups and Pineapple Tidbits in 100% Pineapple Juice cups – which he claimed were falsely advertised as containing “All Natural Fruit” when they in fact contained ascorbic acid and citric acid.

Granting Dole’s motion, U.S. District Court Judge Lucy H. Koh held that the plaintiff failed to present sufficient evidence that the challenged claims were likely to mislead reasonable consumers and that the label statements were therefore unlawful.

The opinion noted that the Food and Drug Administration has yet to promulgate a regulation defining the word “natural” as it pertains to packaged food, but has adopted an informal definition for the term “as meaning nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in the food.”

The plaintiff failed to offer evidence that the two allegedly synthetic ingredients found in the challenged Dole products “would not normally be expected to be in” those products as the FDA definition requires, the court said, with Brazil declining to provide expert reports or consumer surveys for support. “[A]bsent any evidence that reasonable consumers would not normally expect citric acid and ascorbic acid to be found in the challenged Dole products, Brazil cannot rely on FDA’s informal policy to show that those consumers were likely to have been misled,” the court wrote.

Although Brazil himself testified that he was misled by the “All Natural Fruit” label, his deposition was not enough to carry the case, Judge Koh explained. “‘A few isolated examples of actual deception are insufficient’ to survive summary judgment,” the court said. “Where, as here, a plaintiff offers one isolated example of deception – i.e., Brazil’s – summary judgment must be granted.”

To read the order in Brazil v. Dole Packaged Foods, LLC, click here.

Why it matters: Defendants in the crosshairs of “all natural” consumer class actions can chalk the decision up to a victory for advertisers. Companies have faced a tidal wave of litigation challenging such ad claims, yielding speculation that the term has disappeared from grocery store shelves as well as resulting in multimillion-dollar settlements, such as Naked Juice’s $9 million payout and Ben and Jerry’s $7.5 million deal.  

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New Suits: Whiskey Not Handmade, Supplements Not Supporting the Brain

In false advertising litigation news, two new suits in California federal courts challenge claims that a whiskey is “handmade” and that a supplement “supports healthy brain function.”

Maker’s Mark may tout its whiskey as “handmade” in three different places on its label, but according to the complaint filed by Safora Nowrouzi and Travis Williams, the company’s own photos and videos of its manufacturing process bely the false and misleading promotion.

According to the complaint, which alleged violations of California’s False Advertising Law and Unfair Competition Law and negligent and intentional misrepresentation, the manufacturer actually employs an automated and/or mechanized process for mixing, fermenting, distillation, and bottling of its whiskey. “Ironically, even the labeling of the bottles, which contains the alleged ‘Handmade’ statement, is achieved by a mechanized and/or automated process.”

Photos and videos from a tour of the Maker’s Mark distillery reveal “virtually no human involvement in this system, other than perhaps the pressing of a button,” the plaintiffs said, and a statement that the company uses an “old antique roller mill” to break up its grains is disproven by video footage of “electronically driven motors…controlled by a set of electronic control panels.”

The complaint seeks to certify a statewide class of consumers who “overpaid” for Maker’s Mark whiskey, asking for compensatory and punitive damages as well as injunctive relief to discontinue the “handmade” claims, disclose the mechanized process used to manufacture the whiskey, and engage in corrective advertising.

In the second suit, a San Francisco purchaser of Flintstones Healthy Brain Support Gummies sued manufacturer Bayer Healthcare over claims that the supplements improve brain function. Although the labeling for the product stated that the gummies “support healthy brain function” with the inclusion of Omega-3 DHA derived from algae, the plaintiffs allege that scientific evidence has established that DHA is no more effective than a placebo.

“[R]ather than having adequate substantiation for its brain function and brain support representations, the scientific evidence is clear that algal Omega-3 DHA supplementation does not provide brain function or brain support benefits,” Liza Gershman told the court, adding that not a single randomized, controlled clinical trial has concluded DHA provides improved cognitive function in comparison to placebo.

Gershman alleged that the supplement itself provides a “trivial and meaningless” amount of DHA to the brain, and American children and adults get sufficient DHA in their daily diet. She also noted that the Food and Drug Administration denied a request just last year to recognize a daily requirement for DHA.

Because the “only ingredient in the product represented as providing brain support or function is the DHA,” in Bayer’s nationwide marketing campaign, underway since August 2013, the defendant’s representations are “false, misleading, and reasonably likely to deceive the public,” the complaint stated.

In addition to restitution and disgorgement for nationwide and statewide classes, Gershman requested that the court halt the challenged advertising and order Bayer to launch a corrective advertising campaign.

To read the complaint in Nowrouzi v. Maker’s Mark Distillery, Inc., click here.

To read the complaint in Gershman v. Bayer Healthcare, LLC, click here.

Why it matters: The new lawsuits demonstrate that plaintiffs can – and will – base a false advertising suit on any and all claims made by advertisers.

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Online-Only Retailer Settles With DOJ Over ADA Violations

Online Internet grocer Peapod, LLC and parent company Ahold U.S.A., Inc. reached a settlement with the Department of Justice over charges that the company violated the Americans with Disabilities Act because its Web site and mobile app were inaccessible to those with disabilities.

Peapod provides consumers with the ability to remotely and independently browse, shop, and purchase groceries for home delivery. But a compliance review by the DOJ under Title III of the ADA found that disabled individuals were unable to fully participate in and benefit from the defendants’ services, the government alleged.

For example, the DOJ alleged that blind consumers, or those with limited vision, could not use Peapod’s site or apps because certain images, buttons, and form fields were unlabeled or had inaccurate alternative text. It further alleged that pop-up modal windows were not reported to screen readers, tables were missing header information, frames were not named or identified, and boldface type was used to show which fields were required.

Inaccurate captioning for videos on the site also rendered it unusable for deaf or hard-of-hearing customers, the DOJ said, and individuals with physical disabilities that would impact manual dexterity faced barriers because the Java script used on the site was not available to those who cannot make use of a mouse.

While Peapod disputed the DOJ’s findings and allegations of ADA violations, the company elected to settle the charges. The defendants agreed to future compliance with Title III of the ADA by ensuring that the mobile app and Web site conform to the World Wide Web Consortium’s Web Content Accessibility Guidelines 2.0 Level AA (WCAG) by March 31, 2015 and September 30, 2015, respectively.

Going forward, the defendants promised to ensure that any addition, change, or update to the Web site or mobile app would also achieve compliance with the WCAG standards and to seek a commitment from third-party vendors to provide content that conforms, or can be made to conform, to WCAG.

As part of the settlement, Peapod will also designate a “Website Accessibility Coordinator,” reporting directly to a company executive, and adopt, implement, and distribute a DOJ-approved Web site and Mobile Application Accessibility Policy. To encourage feedback, the company must add a notice to its Web site about its accessibility efforts, providing a phone number for disabled customers to call when in need of technical assistance.

The agreement – in force for three years – additionally contained requirements for testing, employee training, and the retention of an independent “Website Accessibility Consultant” to verify compliance.

To read the settlement agreement, click here.

Why it matters: While compliance with the ADA for Web sites and mobile applications remains an unsettled question of law in the courtroom, the DOJ has not hesitated to bring actions against Web-based entities for perceived violations. Importantly, the DOJ announced plans to issue a Notice of Proposed Rulemaking in June 2015 to update the regulations implementing Title III “to address the obligations of public accommodations to make goods, services, facilities, privileges, accommodations, or advantages they offer via the Internet, specifically at sites on the World Wide Web, accessible to individuals with disabilities” and “make clear to entities covered by the ADA their obligations to make their websites accessible.” Advertisers should stay tuned.

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