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January 7, 2013

2012 FTC Year in Review

Consumer Blog Report

As we begin 2013, we wanted to take a look back at our top FTC developments from 2012. Like last year, there are too many good ones to limit them to just the top 10.

    1. Green Guides

    While green claims have been an enforcement priority for the FTC over the last few years, the FTC finally released its revised Green Guides, which we summarized here, here, and here.

    2. Protecting Kids

    The FTC adopted final amendments to the COPPA rule meant to keep the rule current with evolving technology and the way children use the Internet, including mobile devices and social networking websites. The FTC also released an updated report on mobile apps for kids, finding that there has been little progress since the FTC first looked at this issue in 2011 and strongly encouraging providers to improve their practices… or else.

    3. Mobile Apps and Disclosures

    Sticking with the theme of mobile apps, the FTC also published guidance for mobile app developers addressing marketing and privacy issues. Earlier in the year, the Commission held a workshop on updating its 2000 Dot Com Disclosures guidance in light of changes in technology and the way consumers use and access the Internet.

    4. Privacy Report

    The FTC released its final report setting forth a privacy framework and best practices for companies that collect and use consumer data.

    5. Personnel Changes

    Last year saw two new Commissioners -- Maureen Ohlhausen and Joshua Wright -- and the departure of David Vladeck, the Director of the Bureau of Consumer Protection. It remains to be seen whether Vladeck's departure will have any significant, long-term effect on the FTC's consumer protection enforcement actions and priorities.

    6. Record Breaking

    The FTC won its largest ever litigated monetary judgment when the US District Court for the Central District of California ordered a marketer of wealth creation products to pay $478 million.

    7. Reaching an Understanding

    As required by the Dodd-Frank Act, the FTC and CFPB entered into a Memorandum of Understanding on coordinating enforcement actions and harmonizing rulemakings.

    8. The Public Interest

    Courts took a closer look at whether FTC settlements in which the defendant denied liability or did not admit liability were in the public interest. In two cases that looked at this issue, the courts ultimately approved the settlement as is. Commissioner Rosch led the charge in questioning such settlements, and with his departure it will be interesting to see if this issue persists.

    9. It's Never-ending

There will always be people who struggle with weight, and the FTC will always be keeping an eye on companies that market weight loss products. In 2012, the FTC reached settlements with Skechers, Medifast, and Ab Circle Pro over weight loss and other health claims.

10. What Else Was the FTC "Up To" in 2012?

Settling with replacement window companies over claims that their windows could save consumers "up to" an advertised amount on energy costs. These settlements, and subsequent FTC activity, appeared to represent a departure from the FTC's prior guidance on maximum performance claims. Time will tell whether the new standard is limited to the facts and circumstances of these cases, or will apply more generally.

11. Bad Spy

In the creepiest development of 2012, the FTC settled with several rent-to-own companies over claims that they used software on computers they rented to spy on consumers, including capturing personal information and pictures of consumers' homes.

12. Sleep Tight

And in the ickiest development, the FTC brought charges against two makers of bed bug and lice treatments alleging that the companies lacked substantiation for their claims and falsely claimed government recommendation and affiliation.

The FTC was indeed very busy in 2012, identifying and addressing issues across industries and forms of advertising. We're excited to see what's in store for 2013. Stay tuned to the Consumer Advertising Law Blog for all the riveting details!

© Arnold & Porter Kaye Scholer LLP 2013 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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