Hunton Retail Law Resource

Last week, the FTC sent high profile warning letters to two trade associations, the American Beverage Association (AmeriBev) and the Canadian Sugar Institute, and 12 registered dieticians regarding inadequate disclosures in the dieticians’ social media posts. While the specific influencer posts varied across dietician, they all related to the safety of aspartame, an artificial sweetener, and other messaging regarding the benefits of consuming sugar-containing products. Further, some dieticians even went so far as to call the World Health Organization’s warnings regarding aspartame and artificial sweeteners as based on “low-quality science” and “clickbait” evidence. While some of the dieticians included words like “#Ad” or “Sponsored” in their posts, according to the FTC most failed to provide obvious disclosures informing consumers that they were watching an ad that had been paid for by an industry association. The FTC’s warnings alleged that inconspicuous messaging surrounding these partnership deals led to consumer confusion regarding who ultimately was responsible for the influencers’ nutrition messaging. And according to the FTC, the fact that these influencers are registered dieticians increases the public’s confidence in the information they disperse, thus heightening the need for them to be clear about their partnership affiliations.

On October 7, 2023 California Governor Gavin Newsom signed two landmark climate disclosure laws aimed at making major companies publicly disclose their greenhouse gas emissions and report on their climate-related financial risks. The first, the Climate Corporate Data Accountability Act (SB 253), will require all business entities with an annual revenue exceeding $1 billion to disclose their greenhouse gas emissions in a format accessible to the public. The second, SB 261, will require all business entities with annual revenue exceeding $500 million to publish a report on their “climate-related financial risks” on their websites. These first-in-the-nation laws are broader than the proposed SEC climate disclosure rule and reach more than just California-based entities.

As we reported Friday, the FTC has proposed a rule to ban misleading and hidden fees. While that initiative is pending, California Governor Gavin Newsom signed similar legislation, SB 478, into law. Effective July 1, 2024, the California statute prohibits advertising, displaying, or offering a price for a good or service that does not include all mandatory fees or charges other than taxes or fees imposed by a government on the transaction, or postage or carriage charges that will be reasonably and actually incurred to ship the physical good to the consumer. The legislation takes aim at ...

The FTC announced a Notice of Proposed Rulemaking (NPRM) targeting misleading and hidden fees, commonly known as “junk fees,” and how businesses may advertise and market prices to consumers. The NPRM was drafted based on over 12,000 public comments to the FTC’s Advance Notice of Proposed Rulemaking published in November 2022.

BBB National Programs’ Children’s Advertising Review Unit (CARU) has released new Guardrails for Child-Directed Advertising and Privacy in the Metaverse. As explained in a BBB press release, the Guardrails are intended to provide companies with best practices as they navigate the complexities of engaging with children in metaverse experiences. The Guardrails offer “actionable recommendations” on developing metaverse experiences directed to children, complying with existing advertising and privacy law, and engaging responsibly with children online. These guidelines build on earlier CARU guidance regarding metaverse activities.

The FTC announced an enforcement action against online shoe seller Hey Dude, Inc. (a subsidiary of Crocs, Inc.) alleging Hey Dude suppressed more than 80% of consumer reviews that provided less than four out of five stars. The complaint also alleges multiple violations of the FTC’s Mail Order Rule between 2020 and 2022. A proposed consent order would require Hey Dude to pay nearly $2 million and take certain steps to prevent future violations.

In June 2023, EPA announced the dates for the 2024 submission period for information required under the Toxic Substances Control Act (TSCA) Chemical Data Reporting (CDR) rule. The information is collected every four years from manufacturers and importers of certain chemicals in commerce, generally when production volumes for those chemicals are 25,000 pounds or greater in a given reporting year. The 2024 submission period runs from June 1, 2024 to September 30, 2024.

A longer version of this blog post originally appeared as an article in Retail TouchPoints: Policing Your Brand on Online Marketplaces: an Intellectual Property Guide for Retailers. Further duplication is not permitted.

Retailers often face brand policing challenges on online resale platforms such as Wayfair, Overstock.com, and eBay. Resellers account for a significant portion of retail sales on these websites. Resellers tend to be small to midsize entities but are nevertheless able to reach a large number of US consumers. It’s thus unsurprising that problems arise daily, often relating to brand owners’ dissatisfaction with the third-party resellers and their sales practices.

Since the United States Supreme Court issued its decision in Viking River Cruises, Inc. v. Moriana in June 2022, trial courts in California have grappled with how to address the non-individual portion of a plaintiff’s PAGA claim that remains in court when a plaintiff’s individual PAGA claim is compelled to arbitration.[1]  Most trial courts have found it appropriate to stay the non-individual portion of the PAGA claim until the arbitration’s conclusion because that outcome would determine whether the employee retains standing to proceed in court.  On July 17, 2023, in the highly anticipated decision of Adolph v. Uber Technologies, the California Supreme Court addressed several questions in the post-Viking River landscape, including the propriety of staying non-individual PAGA claims pending the completion of arbitration. 

As reported on Hunton's Insurance Recovery Blog, the Fifth Circuit recently held that Blue Bell Creameries’ commercial general liability (CGL) insurers do not have a duty to defend the ice cream company in a shareholder lawsuit, which arose from a Listeria outbreak. The decision underscores the importance of coordination of different coverages and policies across insurance programs, as well as the potential perils policyholders may face if forced to seek recovery for certain losses under non-traditional policies.