Hunton Retail Law Resource

Earlier this week, the Federal Trade Commission (FTC) and Food and Drug Administration (FDA) sent cease-and-desist letters to several companies warning them that their products, which were marketed to mimic popular children’s snacks, ran the risk of unintended consumption of the Delta-8 THC by children. In addition to the FDA’s concerns regarding marketing an unsafe food additive, the agencies warned that imitating non-THC-containing food products often consumed by children through the use of advertising or labeling is misleading under Section 5 of the FTC Act. The FTC noted that “preventing practices that present unwarranted health and safety risks, particularly to children, is one of the Commission’s highest priorities.”

The FTC has made its position on violations of “Made in USA” standards clear, and Williams-Sonoma received an expensive repeat reminder. On Thursday, April 25, the agency announced a settlement with the home goods retailer, directing it to pay an unprecedented civil penalty of $3.175 million for violating a 2020 FTC order requiring the company to clearly and accurately identify which products are, in fact, made in the USA. “Made in USA” denotations, as pointed out by the FTC, are more than formality: rather, to label something as “Made in USA,” the business must adhere to specific criteria – namely, that the product’s final assembly or processing, and all significant processing, takes place in the US, and that all or virtually all ingredients or components of the product are made and sourced in the US.

In January 2023, the FTC announced a proposed rule that would ban employers from imposing noncompetes on employees. After collecting over 26,000 public comments during the 90-day notice and comment period, the FTC announced a special Open Commission Meeting set to take place on Tuesday, April 23, 2024 to discuss the implications of the proposed rule. While closed to public comment, the public is still able to view the meeting via webcast. 

Earlier this year, New York Governor Kathy Hochul signed S.B. S1048A into law (which we reported about here) requiring sellers that impose credit card surcharges to post the total price, inclusive of the surcharge, on the item. The law is aimed at preventing consumers from being misled when making a purchase using their credit card. Governor Hochul recently announced guidance to help businesses better implement the law’s requirements. The guidelines, which include an informational video as well as a one page brochure, provide three affirmative ways companies may comply with the ...

On December 13, 2023, New York Governor Kathy Hochul signed Senate Bill S1048A into law requiring sellers that impose credit card surcharges to post the total price, inclusive of the surcharge. In addition, the surcharge to customers may not exceed the amount of the surcharge charged to the business by the credit card company for such credit card use. Per the legislative history, “This bill is necessary to prevent consumers from being misled when making a purchase using their credits cards.”

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.

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.