While speaking at the annual conference of the National Advertising Division on September 19, 2023, the Federal Trade Commission (“FTC”) announced a generative AI (“AI”) policy that is consistent with Chairwoman Khan’s focus on the perceived harms to consumers from large technology companies, fully embracing a plan to regulate AI swiftly, aggressively, and proactively. Read the full post on Proskauer’s Minding Your Business blog ..read more

This past Friday, the Second Circuit reversed a lower court’s denial of a motion to compel arbitration in a putative consumer class action against fintech company Klarna.  Edmundson v. Klarna,  Inc., Case No. 22-557-cv (2d Cir. Nov. 3, 2023). The panel upheld the enforceability of Klarna’s “click-wrap” mandatory arbitration provision incorporated in Klarna’s terms and conditions.  This precedential decision comes amid a surge in putative class actions targeting online services including, for example, subscription programs subject to state auto-renewal laws. For companies that ha ..read more

This week the FTC announced that it finalized its revisions to the Endorsement Guides, which give advertisers guidance on ensuring that their use of endorsements or testimonials complies with the FTC Act. At the same time, the FTC also announced an updated accompanying guidance document, “FTC’s Endorsement Guides: What People are Asking.” While the revised Endorsement Guides still require advertisers to comply with the requirements we previously discussed in our On Notice series, they feature several key additions addressing technological changes in how advertising is conducted, and advertiser ..read more

Judge Richard Seeborg of the Northern District of California recently dismissed a putative class action alleging that Sprout Foods’s nutritional claims on its baby and toddler food labels misled consumers into believing that the products provide physical health benefits.  In their complaint, plaintiffs alleged that the products are “harmful both nutritionally and developmentally” due to allegedly high levels of free sugars. In rejecting these claims, the Court found that plaintiffs’ allegations were based on speculative research findings and hypothetical scenarios, which did not adequatel ..read more

Please join us on Tuesday, September 13, for a Proskauer panel at ANA covering the latest legal developments related to environmental advertising claims.  Our panelists, Jeff Warshafsky, Jennifer Yang, and Nicole Sockett, will discuss carbon offsets and lifecycle assessments, recyclability and recycled content claims, general environmental benefit claims, and other key takeaways from the FTC Green Guides, the NAD, and the courts.  You can register for the event with ANA here: Environmental Claims: Latest Legal Developments | Webinars | Events & Webinars | ANA.   ..read more

It has been almost forty years since Bruce Springsteen first famously celebrated being “Born in the USA.” From an advertising industry perspective, this song’s lasting popularity is no surprise; as advertisers know, “Made in the USA” is often a selling point for American industries. The FTC knows this too. In late 2021, the FTC finalized a new rule cracking down on deceptive or misleading unqualified U.S. origin claims. The FTC’s new rule, which went into effect on August 13, 2021, does not create new substantive requirements for advertisers, but gives the FTC the ability to impose new, substa ..read more

Judge Cathy Seibel of the Southern District of New York recently dismissed a putative class action lawsuit challenging various environmental impact and animal welfare claims made by Allbirds in ads for its wool shoes.  In doing so, the court determined that plaintiff’s allegations, which largely consisted of criticisms of the wool industry in general, did not plausibly allege that Allbirds’s descriptions of its own practices were false or misleading. Dwyer v. Allbirds, Inc., 7:21-cv-05238-CS (S.D.N.Y. Apr. 18, 2022). Plaintiff’s complaint focused on two categories of claims: 1) claims abo ..read more

2021 saw well over 500 new class actions in the advertising space. With the number of these cases increasing, it is more important than ever for businesses to stay on top of the latest trends, including the types of products and claims that are being targeted.  Our full report, available here, goes into detail on these points and others.  This post summarizes some of the key takeaways. Food & Beverage As in past years, the Food & Beverage industry remained a main target of the plaintiffs’ bar in 2021. Ingredient claims remained the main focus. While 2020 was the year of “vani ..read more

With more than 80 closed cases, 2021 was another unprecedented year at the National Advertising Division and National Advertising Review Board. Proskauer’s False Advertising Group closely tracks these decisions from the advertising industry’s self-regulation system to stay apprised of the latest developments and trends, and has compiled a guide providing case summaries, with our insights and key takeaways, of key 2021 decisions from the NAD and NARB. This resource, organized by industry, will help advertisers stay up-to-date on current trends, best practices and recent important changes to NAD ..read more

Cryptocurrency, social media, and celebrity or influencer endorsements have all been top of mind recently, including for advertisers. A newly filed lawsuit is asking a federal court to consider the intersection of these areas, with potential implications for advertisers looking to expand into the cryptocurrency space. EthereumMax executives (“Executive Defendants”) and a few well-known celebrities, including Kim Kardashian, Floyd Mayweather, Jr., and Paul Pierce (“Celebrity Defendants”) were recently met with a class action complaint in California federal court filed on behalf of all purchaser ..read more