Advertising & Marketing

Today, the Supreme Court issued its decision in Barr v. American Association of Political Consultants, which addressed the constitutionality of the Telephone Consumer Protection Act (TCPA).  Although the Court splintered in its reasoning—producing four separate opinions—the justices nevertheless coalesced around two core conclusions: (1) the TCPA’s exception for government debt collection calls is unconstitutional, and (2) the exception can be severed from the rest of the TCPA.  Six justices determined that the TCPA’s government-debt exception violates the First Amendment, and seven justices concluded that the exception is severable from the rest of the statute.  The end result is that the government-debt exception is invalid but the rest of the TCPA—including its general prohibition on automated calls and text messages to mobile numbers—remains intact.  The narrow scope of this ruling suggests that it may have limited practical effect for most parties.

As we previously explained, the TCPA, as originally enacted in 1991, restricts the use of an automatic telephone dialing system (ATDS) to transmit calls or texts to mobile numbers without the recipient’s prior express consent (the ATDS prohibition).  In 2015, Congress amended the TCPA to exempt from the ATDS prohibition calls made to collect a debt owed to the United States.  The question before the Supreme Court was whether the government-debt exception violates the First Amendment and, if so, whether the proper remedy is to sever the exception—leaving intact the rest of the TCPA—or invalidate the entire ATDS prohibition.
Continue Reading Supreme Court Invalidates TCPA Government-Debt Exception

Earlier this week, the Federal Communications Commission’s (FCC’s) Consumer and Government Affairs Bureau released a Declaratory Ruling clarifying the agency’s interpretation of the “Automatic Telephone Dialing System” (an “autodialer” or “ATDS”) definition in the Telephone Consumer Protection (TCPA).  The Ruling clarified that, in the context of a call or text message platform, the definition does not turn on whether the platform is used by others to transmit a large volume of calls or text messages; instead, the relevant inquiry is whether, in this context, the platform is capable of transmitting calls or text messages without a user manually dialing each such call or text message.

The Declaratory Ruling was issued in response to a Petition filed by the P2P Alliance  seeking confirmation that its text messaging platform is not an autodialer and therefore not subject to the TCPA’s ATDS-related consent requirements.  These requirements generally prohibit using an ATDS to call or text a mobile number without the recipient’s consent.  The Petition stated that the text messaging platform at issue required users of the platform “to actively and affirmatively manually dial each recipient’s number and transmit each message one at a time.”  The Petition also stated that recipients generally would provide their consent to receive such messages by providing their mobile numbers to the platform’s users.
Continue Reading FCC Issues Two TCPA Declaratory Rulings, One Clarifying Autodialer Definition

As consumers rely more and more on the “independent” reviews of their peers in choosing products and services, advertisers need to remain vigilant that their role (if any) in disseminating such reviews is fairly disclosed, accurate and not misleading.  The pitfalls in this area were recently illustrated by a pair of enforcement actions brought by the Federal Trade Commission and the National Advertising Division of the Better Business Bureau.  These actions, the latest in a series of similar enforcement efforts, confirm that review sites remain a hotbed of enforcement activity, and both actions serve as good reminders of the standards that review sites must observe to avoid similar actions.

The first of these actions is an FTC enforcement against LendEDU, which centered around the “objective,” “honest,” “accurate,” and “unbiased” rankings of financial products that LendEDU posted to its review site.  The FTC alleged that, far from being objective and honest, these rankings were in fact determined based on compensation from the companies being ranked.  In addition, the FTC alleged that over ninety percent of LendEDU’s “unbiased” positive reviews were in fact written by LendEDU employees and their friends and families.
Continue Reading FTC and NAD Actions Highlight Continued Scrutiny of Online Reviews

Yesterday, the Supreme Court heard oral argument (by telephone) in Barr v. American Association of Political Consultants, a case that centers on the constitutionality of the Telephone Consumer Protection Act (TCPA), and, more specifically, the prohibition on transmitting automated calls or texts to mobile telephone numbers without prior express consent.  Given the litigious environment surrounding the TCPA, the case has important potential implications for businesses that communicate with consumers in this manner.  A transcript of the argument is available here, and a recording is available here.
Continue Reading Supreme Court Hears Argument Regarding Constitutionality of TCPA

The Eleventh Circuit has issued a unanimous decision in Medley v. Dish Network, LLC, holding that the Telephone Consumer Protection Act (TCPA) does not permit consumers to unilaterally revoke their consent to receive automated calls or texts, if that consent is given in a bargained-for contract.  The decision could have important implications for businesses that rely on consent to send consumers automated calls and texts.
Continue Reading Eleventh Circuit Holds that TCPA Consent Revocation is Limited When Given as Part of a Bargained-For Contract

The Federal Trade Commission has traditionally responded forcefully to public health and economic crises, and it is doing so again in response to the coronavirus pandemic.  The current crisis does present some additional complications, however, because of its impact on the operations of the agency itself.  Three particular aspects of the FTC’s consumer protection-related response stand out: (1) continuation of the agency’s scrutiny of false and deceptive product claims that seek to capitalize on the fears of consumers, (2) signs that the agency will work with businesses to accommodate the special pressures of the crisis, and (3) continuation but postponement of other, non-enforcement activities.

The FTC’s first consumer protection priority in response to the coronavirus pandemic has been to focus on especially egregious marketing scams that target particularly vulnerable populations.  The FTC has already issued a number of warning letters to sellers of supposed COVID-19 cures ranging from tea to edible silver and to voice over internet protocol (“VoIP”) service providers facilitating illegal coronavirus-related calls.  Fraud reports continue to rise rapidly: the FTC has received 7,800 coronavirus-related complaints this year, and almost half of these were filed in the last week.
Continue Reading The FTC’s Response to the Coronavirus Pandemic: Consumer Protection Priorities and Initial Actions

Last week, the Better Business Bureau’s National Advertising Division (NAD) announced a new expedited process for digital advertising challenges.  The SWIFT (Single Well-defined Issue Fast Track) Process will allow businesses to address concerns of transparency and truthfulness on an accelerated basis, with decisions rendered within twenty business days of case initiation.  The SWIFT process is currently limited to challenges involving one of three issues:  the prominence or sufficiency of disclosures, including disclosure issues in influencer marketing, native advertising, and incentivized reviews; misleading pricing and sales claims; and misleading express claims that do not require review of complex evidence or substantiation such as clinical testing or consumer perception evidence.
Continue Reading The BBB’s National Advertising Division Launches Fast-Track SWIFT Process for Digital Advertising

With the adoption of two recent orders, the Federal Communications Commission (“FCC”) continues to implement the TRACED Act.  In the first of these orders, the FCC established a deadline by which certain voice services provides must adopt and implement the SHAKEN/STIR call authentication framework.  In the second of these orders, the FCC established the registration process for an industry “traceback” consortium.  These actions build on the FCC’s prior implementation efforts, which we discussed here and here.
Continue Reading FCC Continues Implementation of TRACED Act with SHAKEN/STIR Mandate and Industry Traceback Consortium

Yesterday, the Federal Communications Commission (“FCC”) on its own motion released a Declaratory Ruling to confirm that the COVID-19 pandemic constitutes an “emergency” under the Telephone Consumer Protection Act (“TCPA”); as a consequence, hospitals, health care providers, state and local health officials, and other government officials may lawfully communicate through automated or prerecorded calls (which include text messages) information about the coronavirus and mitigation measures to mobile telephone numbers and certain other numbers (such as those of first responders) without “prior express consent.”

By way of background, absent “prior express consent,” the TCPA prohibits the transmission of an automated or prerecorded call to any mobile telephone number.  However, this prohibition is subject to an “emergency purposes” exception.  The TCPA does not define what constitute “emergency purposes,” but the FCC’s rules construe the term to mean “calls made necessary in any situation affecting the health and safety of consumers.”
Continue Reading FCC Clarifies that COVID-19 “Emergency Purposes” Calls/Text are Not Subject to “Prior Express Consent” Requirement