Alerts

AD-ttorneys@law – July 11, 2019

Alerts / July 11, 2019

In This Issue

Privacy Researchers and Experts Descend on FTC Conference

PrivacyCon 2019 panelists strike an ominous tone

Pop Quiz

OK, here’s a multiple-choice question. What is PrivacyCon? Some sort of new identity-theft scam? The persona of a new data-themed wrestling heel? Or a very low-key cosplay event?

None of the above! No, it’s so much better than any of those things.

PrivacyCon is an annual conference held by the Federal Trade Commission that examines “cutting-edge research and trends in protecting consumer privacy and security.” It’s like a privacy-nerd Woodstock, except without mud or drugs or even music.

OK, never mind. It’s a terrible comparison.

Finger in the Dam

PrivacyCon was first launched in 2016 as a one-day event and remains a one-day conference.

This year, the day was June 27, the place – Washington D.C.’s Constitution Center.

On tap were four separate sessions, covering issues that are … well, immense in scope and seriousness. The first concentrated on privacy policy research, with an emphasis on the European Union’s General Data Protection Regulation (GDPR) and its effect on online privacy. Part two tackled “consumer preferences, expectations, and behaviors” – how regular folks understand digital privacy and tracking.

Third up: Speakers addressed online ads and tracking. And, finally, a fourth session offered research about data “vulnerabilities, leaks and breach notifications.”

Check out the conference’s agenda to learn more about the participants.

The Takeaway

Unsurprisingly, the session addressing consumer expectations offered interesting insights – after all, these expectations, for better or worse, establish the guardrails for acceptable regulatory policy and corporate behavior.

Researcher Princeton University Ph.D. candidate Noah Apthorpe advocated a high default level of privacy that would not require consumers to understand technical matters. His conclusions seemed a logical extension of the findings of Consumer Reports’ Policy Counsel Katie McInnis that consumers simply did not understand how they were being tracked. Other researchers advocated for robust enforcement that draws on tech-world experts to ensure that regulation succeeds.

During the first session on privacy, Consumer Reports’ Consumer Privacy and Technology Policy Director Justin Brookman argued that the GDPR was not being enforced and was failing to significantly change the behavior of companies. Christine Utz, research assistant and Ph.D. student at Ruhr-University Bochum, concurred, noting that the actual amount of data being processed by companies online did not decrease in the wake of the GDPR’s launch.

So, PrivacyCon is a worthy event that offers interesting, if controversial, insights.

And maybe Iron Butterfly will finally show up and play a set.

FTC Announces Robocall Crackdown

Commission rounds up a posse, tackles 90+ separate actions

Le Deluge

The Federal Trade Commission announced its latest major initiative against robocallers, those shadowy denizens of the phone-line ether that have plagued consumers since the internet subsumed all worldly communication.

And they have it coming; the problem of unwanted calls is growing at an astounding rate. Back in December 2017, we noted that the Federal Communications Commission claimed that consumers were receiving 2.4 billion unwanted calls every month. Today, according to YouMail’s Robocall Index, the number of calls has increased to 4.4 billion per month. That’s 145 million per day, 6 million per second … you get the idea.

Lineup

The commission’s “Operation Call It Quits” roped in 45 partners including a mob of state attorneys general, U.S. Attorney’s offices in three federal districts and the Treasury Department. All told, the effort accounts for more than 90 actions “targeting operations around the country that are responsible for more than one billion calls.”

Actions that originated with the commission include:

  • A temporary restraining order and asset freeze against First Choice Horizon, which was peddling fictitious interest rate deductions on credit cards and then opening accounts in consumers’ names.
  • A suit against 8 Figure Dream Lifestyle, which also resulted in a TRO and asset freeze, for get-rich-quick schemes built around robocalls and a mix of other communications.
  • A proposed settlement with autodialer developer and operator Derek Jason Bartoli. The proposed agreement would ban him from robocalling for life and saddles him with a $2.1 million penalty.

The Takeaway

Does the commission mean business? It seems so. Along with the above suits, it announced settlements with another handful of companies in cases that were already being prosecuted. 

With this much heat being applied by the FTC’s enforcement partners – not to mention the priority given to robocall enforcement by the Federal Communications Commission – it might be time to review the FTC’s guide to compliance with the Telemarketing Sales Rule.

NAD Says Deodorant’s Anti-Wetness Claim Stinks

Native Cosmetics’ moisture absorption claims are all wet, says division

Let’s Talk About Sweat, Baby

Some of us shvitz, some of us stink and some of us do both. Luckily, this is America, and you have options.

Depending on what happens under your armpits, you might want an underarm hygiene product to block moisture, mask your odor or a little bit of both.

Here’s how it works: Antiperspirants contain an ingredient that deodorants lack: aluminum. Aluminum combines with liquid sweat to create a gelatinous substance (shudder) that blocks up sweat glands for a little while. So, deodorants may make you smell better, but antiperspirants will clog up your shvitzing altogether (and if they’re scented, make you smell better too).

For more than you ever wanted to know about how sweat works, why it stinks and how armpits resemble tropical rain forests, read this article. Interesting, if grody, stuff.

Going Native

With that background out of the way, we move on to a showdown between Native Cosmetics and Tom’s of Maine before the National Advertising Division (NAD) in June. Both companies make competing deodorant products. But Tom’s thought that Native went too far by effacing the line between deodorant and antiperspirant with marketing claims, including:

“Effective Protection. We tested thousands of ingredients before finding a recipe that feels light and fresh under your arms but provides you with effective protection against odor and wetness,” and “We use baking soda to neutralize odors, arrowroot powder to absorb moisture and acidophilus, a naturally occurring probiotic found in your intestines.” (Say what?!)

The Takeaway

Tom’s told the NAD that it believed that Native had no solid backup for its anti-wetness claims. NAD agreed, pointing out problems with a number of Native’s claims, including whether “in vitro testing using a back-skin mimic in the Water Vapor Transmission Rate test” was relevant to consumers.

“Back-skin mimic”? We don’t even want to know.

NAD also held that Native’s testing of individual ingredients rather than the final product undermined its claims, and significant potential biases existed in the screening questions for the tests.

Rather than go along with NAD’s recommendation to discontinue its claims, Native has decided to appeal to the National Advertising Review Board.

Looks like this dispute rolls on.

FoodState Settles ‘Whole Foods’ Supplement Class Action

Plaintiffs allege product labels misled consumers on wholesome sourcing

Where Have I Heard This One Before?

Shake your head clear of the last 20-plus years. Whole foods isn’t a place; it’s a thing. Food that is unprocessed, unrefined and “natural” seems like a good working definition – and, therefore, an attractive brand name for a retailer.

A recent class action against FoodState, self-proclaimed provider of “the highest quality vitamin, mineral, and herbal supplements, presented to the body in a healthy and natural way,” is all about “whole foods” and how they’re marketed.

Double Falsehood

The original complaint, brought by three California residents in the District of New Hampshire, sued FoodState for labeling its copious catalog of supplement products as containing nutrients from whole foods (see here; the list is 40 pages long). “Although the FoodState Products contain some whole food ingredients,” the complaint reads, “the FoodState Products also contain vitamins, minerals and/or nutrients from other sources, which is not highlighted for consumers.”

You know the rest: Customers paid a premium for the perceived health benefits of whole foods, the complaint maintains, and they were taken for a ride when they picked up FoodState’s products.

The case also accused the company of marketing the products as made in the U.S.A., when in fact they were not.

The Takeaway

The court granted preliminary approval of the class action settlement in May 2019 and claimants can now apply to receive up to $25 per product, for up to four products. The total settlement is $2.1 million, with class members who lack proof of purchase receiving a discount once the $2.1 million benchmark is reached.

The complaint raised an interesting distinction: In addition to allegedly not using whole food sources, the plaintiffs claimed that FoodState renamed stearic acid, a common saturated fatty acid, as “vegetable lubricant.” They argued that the common or usual name should have been used, even though the ingredient was a lubricant and not a binder or filler.

Actions like this are a demonstration of the marketing power of labeling; as benign as ingredients like stearic acid have proved to be, companies would rather risk a lawsuit than have scientific (and therefore “sinister”) ingredients included on their labels.

But isn’t clarity and specificity the best course if a class action can wipe out labeling-derived profit gains in an instant?

IAB Launches Data ‘Nutrition’ Labels 

Is your data fresh or stale? Is it filled with nasty additives and preservatives?

No More Empty Calories

The folks at the Interactive Advertising Bureau’s Tech Lab have released a new Data Transparency Standard intended to ensure “minimum disclosure and transparency standards for any company that collects audience data for targeting, personalization, or measurement of digital advertising,” according to the press release.

The standard asks data providers to provide some of the basics to describe their offerings, including audience counts and precision levels, source refresh frequency and last refresh date.

Participants will submit to annual audits that “confirm that the information provided … is reliable,” says the lab. Compliance seals will be available for any organization that completes the audit. Full details can be found here.

The Takeaway

All of this is newsworthy, but the fun part of the story will bring a smile to the face of any design nerd.

Perhaps it was the “refresh date” meta data that inspired the analogy, but IAB is comparing the new standard to the iconic and ubiquitous nutrition labels on the back of food packaging. “Similar to manufacturers being required to provide a nutrition label on packaged foods, the standard asks data providers to offer details that inform segment quality,” the press release states. MediaPost has created a label image that catches the comparison.

If your company is interested in complying, or you want to look into the standard you’ll be buying in to, required fields, formatting requirements and accountability information can be found here.

For the record: The Food and Drug Administration has been silent about these new packaging requirements.

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