FTC Compliance and Defense

The Federal Trade Commission's (FTC) new “Click to Cancel Rule” or the “Rule”, has been a hot topic in consumer protection and business regulation. This Rule, part of a broader effort to streamline cancellation processes for subscription services, has sparked significant debate and legal challenges, particularly from the National Cable and Telecommunications Association (“NCTA”). Adult entertainment subscription services are justifiably concerned, need to be following these developments very closely and preparing for compliance with the Rule immediately. What is the Click to Cancel Rule? Let’s begin with the basics and some background on the Rule. The FTC recently finalized the "Click to Cancel" rule, a significant regulation aimed at simplifying the process for consumers to cancel recurring subscriptions and memberships. This Rule mandates that businesses must make it as easy to cancel a subscription as it was to sign up for it. The rule is part of the FTC's broader effort to protect consumers from deceptive practices associated with negative option marketing, where a consumer's failure to take action is interpreted as consent to continue a service. Under the Rule, companies must offer consumers the ability to cancel subscriptions with the same ease as signing up for them. In short,…

In October 2015, the European Court of Justice invalidated the International Safe Harbor Privacy Principles which were established in 2000. The Safe Harbor Privacy Principles allowed certified U.S. companies to receive personal data of EU residents in compliance with EU cross-border transfer rules. While many rejoiced the invalidation, numerous legal experts predicted that the invalidated Safe Harbor Privacy Principles would quickly be replaced. The legal experts were right. The EU-US Privacy Shield is a framework for transatlantic exchanges of personal data for commercial purposes between the European Union and the United States. After more than two years of negotiations, on July 12, 2016, the framework was adopted by the European Commission and went into effect the same day. View the full text of the EU-US Privacy Shield framework. The U.S. Department of Commerce Secretary, Penny Pritzker and EU Justice Commissioner Věra Jourová announced the deal together in Brussels. Jourová was quick to point out that the EU-US Privacy Shield is fundamentally different from the previous Safe Harbor arrangement because of the annual joint review, which allows the EU to address any issues as they arise. Jourová went on to say “it brings stronger data protection standards that are better enforced,…

Make no mistake about it, if you are an online business operator, legal compliance should be at the top of your list of priorities. For the better part of the past decade I have preached about the importance of being cognizant of the Federal Trade Commission and its various powers. Once again, the FTC is making the front page of newspapers and is a hot topic amongst journalists. On May 9, the 1st U.S. Circuit Court of Appeals released its order on John Fanning’s “Petition for Review of an Order of the Federal Trade Commission.” John Fanning petitioned the 1st Circuit to review the FTC’s summary decision finding Fanning personally liable for misrepresentations made on the website Jerk.com. While the court did find that portions of the FTC’s remedial order are overbroad, the court took the time to support the commission’s findings that Jerk.com materially misrepresented the source of its content and its membership benefits. For those of you unfamiliar with the history of the FTC’s investigation and prosecution of Jerk.com, here is some background. From 2009 to 2014, Fanning allegedly operated Jerk.com through his entity, Jerk LLC. Jerk.com was a self-proclaimed reputation management website that amongst other things allowed…