On October 16, the Federal Trade Commission (“FTC”) announced a final “click-to-cancel” rule that amends the previous Negative Option Rule to “make it as easy for consumers to cancel their enrollment as it was to sign up.” The Rule also imposes extensive requirements regarding misrepresentations, disclosures, and consent, among others. Most of the provisions will go into effect 180 days after publication in the Federal Register. As of today, the final rule has not yet been published. This final rule is the culmination of a five-year proceeding including the FTC’s issuance of a notice of proposed rulemaking (“NPRM”) in March 2023 and an advanced notice of proposed rulemaking in October 2019. We previously analyzed the proposed rule presented in the NPRM.Continue Reading FTC Issues Final “Click-to-Cancel” Rule
Laura Kim
Laura Kim draws upon her experience in senior positions at the Federal Trade Commission to advise clients across industries on complex advertising, privacy, and data security matters. She provides practical compliance advice and represents clients in FTC and State AG investigations. Laura advises on a wide range of consumer protection issues, including green claims, influencers, native advertising, claim substantiation, Made in USA claims, children's privacy, subscription auto-renewal marketing, and other digital advertising matters. In addition, Laura actively practices before the NAD, including recent successful resolution of matters for both challengers and advertisers. She is the Chair of Covington's Advertising and Consumer Protection Investigations Group and participates in the firm's Internet of Things Initiative.
Laura re-joined Covington after a twelve-year tenure at the FTC, where she served as Assistant Director in two divisions of the Bureau of Consumer Protection, as well as Chief of Staff in the Bureau of Consumer Protection and Attorney Advisor to former Chairman William E. Kovacic. She worked on key FTC Rules and Guides such as the Green Guides, Jewelry Guides, and the Telemarketing Sales Rule. She supervised these and other rule making proceedings and oversaw dozens of the Commission’s investigations and enforcement actions involving compliance with these rules. Laura also supervised compliance monitoring for companies under federal court or Commission order.
Laura also served as Deputy Chief Enforcement Officer at the U.S. Department of Education, where she helped establish a new Enforcement Office within Federal Student Aid. In this role, she managed investigations of higher education institutions and oversaw issuance of fines and adverse actions for institutions in violation of federal student aid regulations. Laura also supervised the borrower defense to repayment division and the Clery campus safety and security division.
FTC Issues Final Rule on Reviews and Testimonials
On August 14, the FTC announced a final rule that, according to the FTC, is intended to “combat fake reviews and testimonials.” The rule will go into effect on October 21, 2024. This final rule is the culmination of the FTC’s issuance of an advance notice of proposed rulemaking (ANPRM)…
Continue Reading FTC Issues Final Rule on Reviews and TestimonialsFTC Reaches Settlement with NGL Labs Over Children’s Privacy & AI
On July 9, 2024, the FTC and California Attorney General settled a case against NGL Labs (“NGL”) and two of its co-founders. NGL Labs’ app, “NGL: ask me anything,” allows users to receive anonymous messages from their friends and social media followers. The complaint alleged violations of the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA), the Children’s Online Privacy Protection Act (COPPA), and California laws prohibiting deceptive advertising and prohibiting unfair and deceptive business practices.Continue Reading FTC Reaches Settlement with NGL Labs Over Children’s Privacy & AI
FTC Returns to Bipartisan Commission with Confirmation of Two New Republican Commissioners
On Thursday, March 7, 2024, the U.S. Senate confirmed two nominees for the open seats on the Federal Trade Commission: Andrew N. Ferguson, former solicitor general of the Commonwealth of Virginia; and Melissa Holyoak, former solicitor general with the Utah Attorney General’s Office. With this confirmation of two new Republican Commissioners, the FTC is one step closer to a full slate of five bipartisan Commissioners. The Senate also re-confirmed Commissioner Rebecca Kelly Slaughter for a second term. President Biden had nominated Ferguson and Holyoak on July 11, 2023, and renominated Slaughter on February 13, 2023. Continue Reading FTC Returns to Bipartisan Commission with Confirmation of Two New Republican Commissioners
FTC Proposes New Rulemaking Focused on Reviews and Testimonials
On June 30, the FTC announced that it had issued a new notice of proposed rulemaking that addresses fake reviews and testimonials. The rule prohibits practices the Commissioners have identified as problematic in public statements for the past several years. For instance, when announcing the review of the Endorsement Guides over a year ago, Chair Khan noted that “consumers’ increasing reliance on online reviews can also incentivize advertisers to harness fake reviews, suppress negative reviews, and amplify positive ones.” The proposed rule covers a variety of topics including fake reviews, review hijacking, purchasing reviews, employee reviews, review suppression, and the use of fake indicators of social media influence. Several of the new provisions track principles set forth in prior FTC cases, or target specific practices previously identified in the Endorsement Guides. Below we’ve summarized the requirements in the proposed rule. The NPRM will be open for public comment for 60 days once it is posted in the federal register. As of today, it has not yet been posted.Continue Reading FTC Proposes New Rulemaking Focused on Reviews and Testimonials
FTC Proposes to Rewrite Negative Option Rule with Expansive Notice of Proposed Rulemaking
On March 23, the Federal Trade Commission (“FTC”) announced a notice of proposed rulemaking that would significantly revise the legal framework governing automatically renewing subscriptions. The proposal would amend the FTC’s existing Negative Option Rule to provide specific disclosure, consent, and cancellation requirements applicable to all negative options in all media. The Rule would formalize many of the guidelines from the FTC’s October 2021 Enforcement Policy Statement Regarding Negative Option Marketing (“Policy Statement”) and incorporate new requirements not previously addressed at the federal level such as renewal reminders. Continue Reading FTC Proposes to Rewrite Negative Option Rule with Expansive Notice of Proposed Rulemaking
FTC Relies on ROSCA and Notices of Penalty Offenses to Police Deceptive Conduct in Settlement with WealthPress
On January 13, the FTC announced a settlement with WealthPress, an online service provider that recommends trades in financial markets. The settlement resolved allegations that WealthPress violated both the Restore Online Shoppers’ Confidence Act (ROSCA) and Section 5 by making false and misleading claims about how much consumers could earn with the company’s trading recommendation services. The action is noteworthy for two reasons. First, building upon the FTC’s prior MoviePass settlement, the FTC’s ROSCA allegations focus not on the terms of the subscription service offered, but rather on the failure to clearly disclose material information about the company’s services. Second, this is the FTC’s first settlement imposing civil penalties for alleged earnings claims violations predicated upon a Notice of Penalty Offenses issued in October 2021. The settlement provides for $1.3 million in consumer redress, $500,000 in civil penalties, and injunctive relief.Continue Reading FTC Relies on ROSCA and Notices of Penalty Offenses to Police Deceptive Conduct in Settlement with WealthPress
FTC Issues New Guidance Regarding Health Products
On December 20, 2022, the Federal Trade Commission (“FTC”) announced its issuance of Health Products Compliance Guidance, which updates and replaces its previous 1998 guidance, Dietary Supplements: An Advertising Guide for Industry. While the FTC notes that the basic content of the guide is largely left unchanged, this guidance expands the scope of the previous guidance beyond dietary supplements to broadly include claims made about all health-related products, such as foods, over-the-counter drugs, devices, health apps, and diagnostic tests. This updated guidance emphasizes “key compliance points” drawn from the numerous enforcement actions brought by the FTC since 1998, and discusses associated examples related to topics such as claim interpretation, substantiation, and other advertising issues.Continue Reading FTC Issues New Guidance Regarding Health Products
Google and iHeartMedia Reach Settlements with FTC and States for Deceptive Endorsements
On November 28, 2022, the Federal Trade Commission (“FTC”) and seven state attorneys general announced that they reached settlements with Google LLC and iHeartMedia, Inc., to resolve claims that the companies aired deceptive advertisements promoting Google’s Pixel 4 phone by arranging for iHeartMedia radio personalities who never actually used the phone to personally endorse it. The companies agreed to pay a combined $9.4 million to the states to settle these allegations.Continue Reading Google and iHeartMedia Reach Settlements with FTC and States for Deceptive Endorsements
FTC Flexes ROSCA Muscle With $100 Million “Dark Patterns” Settlement with Vonage
On November 3, the FTC announced that it entered into a significant $100 million settlement with Vonage to resolve allegations relating to the internet phone service provider’s sales and autorenewal practices. The FTC alleged that Vonage violated both the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA) by failing to provide a simple cancellation mechanism, failing to disclose material transaction terms prior to obtaining consumers’ billing information, and charging consumers without consent.Continue Reading FTC Flexes ROSCA Muscle With $100 Million “Dark Patterns” Settlement with Vonage