Social Media Marketing Advertising Laws & Other Considerations

Transcription

1 February 11, 2016 Social Media Marketing Advertising Laws & Other Considerations Seth A. Gold, Partner, K&L Gates (Los Angeles) Brian K. McCalmon, Partner, K&L Gates (Washington, DC) Kendra H. Nickel-Nguy, Associate, K&L Gates (Seattle) Copyright 2016 by K&L Gates LLP. All rights reserved.

2 This presentation is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer. klgates.com 2

3 Agenda Advertising basics FTC.com disclosures FTC rules Social network background contracts Dealing with ad agency contracts Concerns with publishing user-generated content klgates.com 3

4 Advertising Basics

5 Product Promotion Customer Price Social Media the new word of mouth Place (Media) klgates.com 5

6 Treble Damages Equitable Relief Attorneys Fees/costs FTC Act, 5 COMPETITORS FTC Injunctive Relief Disgorgement (profits) Redress Civil Penalties Deception likely to cause confusion resulting in damages. Lanham Act, 43(a) klgates.com 6

7 What Is Deception? Representation Agency Express or by implication False/ Misleading Overall, net impression Material Likely to affect a reasonable consumer s conduct Presumption: express claims, health/safety claims, and, e.g., claims re: the central characteristic, performance, quality klgates.com 7

8 Representations Truthful and not deceptive Claims or omission Reasonable member of a consumer s group Clear and conspicuous qualifying disclosures Adequate substantiation Competent and reliable evidence Scientific evidence for health/safety, performance, efficacy claims klgates.com 8

9 .com Disclosures

10 Three public comment periods One day-long workshop in May 2012 Updated.com Disclosures released March 2013 Social Media Marketing Rise of the small screen smartphones and tablets klgates.com 10

11 2000 vs 2013.com Disclosures 2000 Guides 2013 Changes If the disclosure of information is necessary to prevent an online ad claim from being deceptive or unfair, it has to be clear and conspicuous. Clear and conspicuous on all devices and platforms that consumers may use to view their ads.or the ad shouldn t run on that device or platform. Close proximity was near, and when possible, on the same screen. Disclosures should be as close as possible to the relevant claim. No pop-ups Label hyperlinks as specifically as possible avoid shortened links klgates.com 11

12 Top Disclosure Considerations For Social Media Marketing klgates.com 12

13 Endorsements In Social Media Misleading Online Reviews (Endorsements) Disclosure of material connection klgates.com 13

14 FTC Rules

15 Testimonials & Endorsements FTC Guide 2009: Update of FTC Guides Concerning Use of Endorsements and Testimonials in Advertising 16 CFR Part 255 [E]ndorsement means any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser. Example #8: NOT an endorsement: consumer regularly purchases brand of dog food/ decides to purchase a new, more expensive brand by same manufacturer/ in her personal blog she says her dog s fur is noticeably shinier and that in her opinion, new version is worth the money. Endorsement: consumer joins a network marketing program under which she periodically receives various products about which she can write reviews if she wants to. If she receives a free bag of the new dog food through this program, her positive review would be considered an endorsement. Material Connection Rule: Disclosure of material connection klgates.com 15

16 Evolved Example: klgates.com 16

17 Latest FAQ on the Cole Hann concept: klgates.com 17

18 Updated FAQs (June, 2015) Next FAQ klgates.com 18

19 The Need and Risk Learn rules + create compliance program klgates.com 19

20 Examples of Other Relevant FTC Rules (in addition to rules for the ad itself) UDAP foundation (UDAAP if CFPB) Behavioral Advertising Principles (+ Trade Org rules, such as DAA re OBA + MSD + Mobile) + cross device rules Big Data (e.g., social media data use in credit scoring!) Refer a Friend (Fed. Reg. intro + trade org. rules ) Green Guides Privacy Policy Disclosures (accurate/adequate?) Sector Specific Rules (e.g., prudential regulatory guidance e.g., what securities industry employees may disclose) Voluntary commitments to industry codes + failure to adhere (deception grounds) klgates.com 20

21 Social Network Background Contracts

22 What s Behind Social Network Widgets & Plug-ins?)

23 What Rules?

24 Failure To Comply (in addition to contract breach) FTC Complaint In the Matter of Jerk LLC et al., #9361 (2014) against Jerk.com and its LCC member/manager, individually Jerk.com claimed profiles labeling people a jerk or not a jerk were created by user-generated content; also claimed profilees could dispute the profiles. Earned revenue by selling $30 memberships, $25 service fee & 3 rd party ads. FTC looked to breach of Facebook rules for portion of deception claim: klgates.com 24

25 Social Network Technologies In Re Nickelodeon Consumer Privacy Li7ga7on (3 rd Cir. ) : lower court found Viacom s pass (form Nick.com etc.) of IP Address etc. to Google ad service was not VPPA PII. On appeal now. EPIC s amicus brief: The court appears to be unaware that Google roucnely tracks users accvices based on their IP address. The court found [ that nothing indicates Google can idencfy individual PlainCffs]. The court likens this quescon to whether the provider has disclosed a unique idencfier and a correlated look- up table.... But the court fails to recognize that Google is the look- up table. Google s encre business model is premised on delivering targeted ads to users based on their browsing history, and this is only possible by iden&fying and tracking their online browsing habits. It is nonsensical to say that Google is unable to idencfy a user based on a combinacon of IP address, MAC address, and other browser cookie data; that is precisely what Google does best. Examples of tech rules (relevancy depends on actual facts) hsps://developers.google.com/+/web/busons- policy#policies klgates.com 25

26 Summary Re Social Developer Rules: Review them per accvity + Consider tech consequences klgates.com 26

27 Dealing with Ad Agency Contracts

28 Using Social Media To Advertise Goal of online marketing Drive consumers to advertiser s site. Consummate transactions. To attain this goal using social media, advertisers typically Publish directly on a social media site. Engage a party to publish advertising campaigns across the internet, including on social media sites. klgates.com 28

29 Engaging An Advertising Agency Determining Appropriate Party to Run Your Ad Campaign Regulator Scrutiny. Online searches of FTC and state regulator activity; both have taken active role in policing online advertising, paying substantial attention to advertising agencies and advertising and affiliate networks. Sample Ad Campaigns. Many ad networks and agencies run same types of campaigns for various clients i.e., use same media and same downstream affiliates to publish advertisements. klgates.com 29

30 Engaging An Advertising Agency (Cont d) Negotiating the Contract Defining the types of social media used Representations and warranties Indemnities heavily negotiated Creating the content klgates.com 30

31 Engaging An Advertising Agency (Cont d) Risk of lawsuit No matter what a contract says, risk of lawsuit. Review content Should consider a number of legal theories. klgates.com 31

32 General Content Review False Advertising nature, performance Trademark infringement, dilution, fair use Copyright photographs, literature Rights of Publicity name, likeness, image Defamation/Privacy false statements klgates.com 32

33 Concerns with Publishing User-Generated Content

34 User-Generated Content (UGC): General Advertisers increasingly running campaigns dependent upon UGC. TENSION On the one hand, using consumer-generated commentary for advertising creates a great risk that intellectual property will be infringed, brands will be disparaged, and individuals will be defamed. On the other hand, there is an almost unexceptional policy to encourage speech on the internet, without requiring internet service providers and web operators to constantly monitor third-party activity out of fear of potential liability. klgates.com 34

35 Copyright: Safe Harbor Of The DMCA Policy Concern If ISPs were responsible for copyright infringement caused by consumer discourse, ISPs would not encourage or even allow that speech. Solution.the DMCA (Digital Millennium Copyright Act) If ISPs implement a mechanism for handling allegations of infringement on their website, they can take advantage of the safe harbor from monetary liability. Among other things: Written policy Registered agent Notice handled pursuant to strict rules Take down effected promptly where notice complies klgates.com 35

36 Trademark No statutory safe harbor No statutory safe harbor for owner/operator of a website hosting content infringing a trademark. Therefore, ISP that hosts UGC infringing another s trademark should create its own policy. Examples Contest: User posts video for advertiser s brand and includes picture of famous third-party s brand in a manner suggesting endorsement. Best practices Have user terms address potential trademark infringement. Consider risk of monitoring for trademark infringement. Respond to complaints. klgates.com 36

37 Right Of Publicity, Defamation, Privacy Communications Decency Act ( CDA ) No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider. 47 U.S.C. 230(c)(1). Does not apply to Federal intellectual property laws. State intellectual property laws? Right of publicity? Liability Generally, owner/operator of website not liable for state law claims arising out of UGC. Exceptions: Where owner/operator takes a fairly active role in contributing to the content of particular posts; federal intellectual property laws; maybe state intellectual property laws. klgates.com 37

38 Right of Publicity, Defamation, Privacy (Cont'd) Examples Batzel v. Smith, 333 F.3d 1018 (9th Cir. 2003) Moving and Storage, Inc. v. Panayotov et al., U.S.D.C. (D.Mass.) Case No Jones v. Dirty World Entertainment Recordings, LLC, 840 F. Supp. 2d 1008 (E.D. Kent. 2012); reversed, 755 F.3d 398 (6th Cir. 2014) klgates.com 38

39 Questions Seth A. Gold, Partner, K&L Gates LLP Brian K. McCalmon, Partner, K&L Gates LLP Kendra H. Nickel-Nguy, Associate, K&L Gates LLP klgates.com 39

40 Thank You klgates.com 40

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