Hot Topics in Digital Advertising –Guidance for In-house Counsel (Part I)

ACCA Advertising Practice Group

June 26, 2014

Greg Boyd, Brian Murphy, Mark Seidenfeld

Terri Seligman & Claudine Wilson

Topics – A Lightening Round!

• Platform Compliance

• FTC: Dot Com Disclosures and Endorsements

• IP Implication of Posting/Sharing Third Party Contact in Social Media

• Privacy

Topic 1

Social Media Platform Term Compliance

In a Nutshell: Social Media Platform Terms• Users must meet age requirements

– 13+ on Facebook, Twitter, Instagram, and Pinterest

– 17+ on Vine and 18+ on Snapchat

• Users are responsible for content they post

• Don’t suggest an affiliation with the platform

• Comply with the law

• Get permission to use material off platform

• No inappropriate content (e.g., infringing material, violence, hate speech, spam)

How Can I Interact With Users?• Terms prohibit use of functionality to send junk

mail, duplicative comments, or unsolicited offers

– Interactions should be meaningful and genuine

• Consider whether communications permitted by the platforms may infringe a user’s rights

– Platform terms may not give you the rights you need

How Can I Interact With Users?

• Remember that content that’s been shared remains public after you’ve deleted it

• Tension between what platforms technically allow and potential right of publicity issues– Do @mentions violate a user’s rights?

Interaction - Facebook

• Official page– Respond to comments, answer questions, and

solicit feedback

• Direct messaging– Brands cannot direct message users unless

they contact the brand first

Interaction - Instagram• Main interaction through comments

– All comments are public

• No “sharing” functionality of posted content

• Sharing occurs through screenshots, cropping, and reposting

– Violates Instagram terms

Interaction - Instagram

UGC – Across Platforms• Users retain ownership of UGC

• Platforms obtain a broad license to use UGC

• Platforms say they give various licenses to use content in different ways, subject to varying terms

• Users represent that UGC is non-infringing

UGC – Reuse UGC Off-Platform?• Does the user who posted

the UGC likely have all of the rights to give?

• How do you get the rights?

– From the platform?

– From the user?

• What usage (without permission) will be tolerated?

In A Nutshell: Use of Platform Brand Assets• Don’t modify or use them in a confusing way

• Don’t falsely suggest sponsorship or affiliation

• Some sites require a non-association disclaimer

• Don’t use trademarks in the name of the product or the promotion

• Use the platform’s marks less prominently than your own marks

Topic 2

FTC: Dot Com Disclosures and Endorsements

FTC’s Dot Com Guidance• .com Disclosures: How to Make

Effective Disclosures in Digital Advertising

• Released in March 2013

• Updates guidance released in 2000

Guidance clarifies that…• Consumer protection laws governing advertising

apply equally to marketers in both traditional and digital media.

• Any disclosures necessary to make a claim truthful and adequately substantiated for a reasonable consumer must be clear and conspicuous, even if the space for them is limited by the medium.

• In addition, such disclosures must be made before consumers make a decision to buy.

Significant Watch-outs

• If a particular platform does not provide sufficient opportunity to make clear and conspicuous disclosures, that platform should not be used. Inadequate space is not an excuse: compliance comes first.

Make disclosures unavoidable

• Because consumers don't necessarily enter a website at the homepage or any particular page, it may be necessary to repeat disclosures related to a claim or offer several times. Moreover, the disclosures must be "unavoidable" and should appear before a consumer gets to the order screen.

Hyperlinks

• Hyperlinks, where appropriate for disclosures, must be explicitly labeled; use of "disclosures" or "terms" or, even, "important information" may not be adequate.

Optimizing for mobile

• Because of the small screens on smart phones (and some tablets), and the need to zoom in on copy to make it legible on the smaller screen, consumers may miss necessary disclosures. Therefore, optimizing websites for mobile devices should be done as a matter of course.

• Beware of horizontal scrolling

Technological limitations• Advertisers must be aware of technological

limitations when considering whether a technique is appropriate for providing disclosures. For example, pop-ups can be prevented from appearing by pop-up blocking software and mouse-overs may not work in the mobile environment.

Space constrained ads

• Short-form disclosures in space-constrained ads, such as on Twitter or Facebook, may not be adequate. Advertisers may need to gather empirical evidence to show that abbreviations and icons work in communicating required disclosures to consumers.

FTC Letter to Search Engines: Key Recommendations• Search engines must ensure that any labels and visual cues used to distinguish advertising from

natural search results are sufficiently noticeable and understandable to consumers.

• In distinguishing top ads or other advertising results integrated into the natural search results, search engines should use: (1) more prominent shading that has a clear outline; (2) a prominent border that distinctly sets off advertising from the natural search results; or (3) both prominent shading and a border.

• In addition to the visual cues a search engine may use to distinguish advertising, paid search results should have a text label that: (1) uses language that explicitly and unambiguously conveys whether a search result is advertising; (2) is large and visible enough for consumers to notice it; and (3) is located near the search result (or group of search results) that it qualifies and where consumers will see it.

• Because consumers may not notice labels in the top right-hand corner of the shaded area or "ad blocks," search engines should place any text label used to distinguish advertising results immediately in front of an advertising result, or in the upper left-hand corner of an ad block, including any grouping of paid specialized results, in adequately sized and colored font.

• Any cues used to indicate that search results were sponsored by an advertiser must be "sufficiently visible on both mobile devices and desktop computers."

The Endorsement Guides

• Guides Concerning the use of Endorsements and Testimonials in Advertising (16 C.F.R. Part 255)

• Promulgated in 1975

• Last revised in 1980

• In 2007, FTC began its review

• Revisions announced in October 2009

Key Update: Disclosure of Material Connections• Connections between the endorser and the

advertiser, which might materially affect the weight or credibility of the endorsement, should be clearly and conspicuously disclosed

• Connections that are “not reasonably expected by the audience”

FTC’s FAQs• No disclosure of material connection is generally required in

traditional media or on websites with similar content

• On Facebook, you should disclose the connection with each post

• Celebrities should still disclose the connection, even if they are a well-known spokesperson for the product

• A single disclosure on a home page that says that products may be provided for free, or a button that says “disclosure,” is generally not sufficient disclosure

• On Twitter, use disclosures such as “#paid ad,” “#paid,” and “#ad”

#Hotwater with FTC: Ann Taylor• FTC was concerned that the bloggers failed to

disclose that they received gifts (2010)• FTC decides not to bring enforcement action

– It was the first and only preview event– Only a few bloggers posted content, and some disclosed the

gifts– A sign was posted at the event telling bloggers to disclose

the gifts– Afterwards, Ann Taylor adopted a written policy on blogger

disclosures

#Hotwater with FTC: Cole Haan• Cole Haan’s #WanderingSole Pinterest contest

required entrants to pin 5 photos of shoes

• FTC: These are endorsements and consumers won’t know that entrants were incentivized to pin– #WanderingSole won’t work!

• FTC doesn’t pursue b/c this is new issue, contest short with few entries, and Cole Haan enacts new social media policy

#Hotwater with FTC: ADT• Security company’s "experts" were featured on numerous high-

profile TV and radio shows, and across the internet in articles and blog posts. Although ADT allegedly booked the experts' appearances through its public relations firms and booking agents - and even provided the media with B-roll footage and questions for the interviews - few segments mentioned the experts' connection with ADT.

• FTC says relationship must be disclosed and settles action with ADT requiring clear and prominent disclosures

• FTC also investigates actions of the intermediaries in this arrangement, the public relations firm, the advertising network that published the blog posts, the booking agency and even one of the experts herself. Closing letters issued.

Topic 3

IP Implications of Posting/Sharing Third Party Content in Social Media

Is the sky really falling?

Rights Clearance & Social Media

1. Do I need permission?

2. Do I have permission –based on the “permission infrastructure” of the social media platform?

3. Is the permission I have robust enough to cover what I’m doing?

Maybe

Maybe

Maybe

Law Coverage

Right of Publicity The name, likeness, photograph,

voice, identity, and “persona” of any

person living (and in many places

dead)

Copyright Any creative material fixed in a

tangible medium of expression

Trademark Words, logos, symbols, taglines

(and possibly other things) that are

used to identify the source of goods

or services

Do I need permission?

Copyright:

• Every use presumptively needs permission

• Linking vs. Copying

– Perfect 10 v. Amazon (9th Cir. 2007) (the “server test”)

– Flava Works v. Gunter (7th Cir. 2012)

• Fair Use

Trademark:

• Likelihood of Confusion

• Classic Fair Use

• Nominative Fair Use

• Free Speech / Parody

Do I need permission?Right of Publicity

At last!

ROP: Is it a Commercial Use? Blurred Lines

• The lines between advertising and editorial content have always been blurry.

• This matters because the rules that apply to advertising are different from those that apply to editorial content.

– Rights Clearance (esp. Right of Publicity)

– (Also False Advertising!)

• The law is a tortoise; technology, a hare.

Lessons from “Old Media”?Downing v. Abercrombie & Fitch (9th Cir. 2001)

Practical Questions• Who is the speaker? The brand!

• Who is the audience? The customer?

• What is the purpose? To build the brand’s image and sell products?

• Who controls it? The CMO?

• Who pays for it? Does it come out of the marketing budget?

• Is it objective? Yeah. Right.

But I don’t even mention a product!Jordan v. Jewel Food Stores (7th Cir. 2014)

• Image advertising = advertising

• Does the speaker have an economic motive?

• “Jewel’s ad has an unmistakable commercial function: enhancing the Jewel-Osco brand in the minds of consumers. This commercial message is implicit but easily inferred, and is the dominant one.”

Right of Publicity vs. First Amendment

• At least 8 different balancing tests, including:– Transformative

– Predominant Purpose

– Rogers v. Grimaldi

– Real Relationship

Do I have permission?

• Directly from the rights holder?

• From users via the Social Media Platform’s TOS (and other terms, policies, guidelines)?

Do I have permission?

USERBRAND

(DEVELOPER)PLATFORM

• Users of social media sites grant broad rights to the social media platform, and the platform grants broad rights to developers

• Despite terms/policies, some users may not understand that their content can be used in a commercial context

• TOS/Developer Guidelines NOT always so clear:

– Twitter API TOS allow use of tweets “in advertisements,

not as advertisements”

Is the permission robust enough?

USERBRAND

(DEVELOPER)PLATFORM

“Creative Commons licenses do not waive or otherwise affect rights of privacy or publicity to the extent they apply. If you have created a work or wish to use a work that might in some way implicate these rights, you may need to obtain permission from the individuals whose rights may be affected.”

(Creative Commons FAQs)

Topic 4

Privacy Update

Privacy Update

• COPPA was updated in 2013– Photos and geolocation are now PII

– Mixed audience sites can no longer just screen out children with terms.

CalOPPA Updated

• Websites must state how they respond to “do not track signals.”

• Disclose if the website participates in tracking users across websites using third parties.

Key International Points

• Canada has CASL going into effect in July – Opt-In only marketing emails.

• EU/US Safe Harbor seeing enforcement and rising importance.