Lord & Taylor's native advertising troubles, an expensive reminder to review marketing practices, and more in this issue of Advertising Law News & Analysis

6 min


Another White House Veteran Joins the Venable Cybersecurity Team

This week, Venable announced that John Banghart has joined the firm's growing cybersecurity consulting practice as Senior Director for Technology Risk Management. Banghart, who has more than two decades of private-sector and federal government cybersecurity experience, most recently worked as the Senior Director for Trusted Engineering at Microsoft, where he developed, implemented, and oversaw strategy for the government adoption of Microsoft's Azure cloud services.

From 2013 to 2015, Mr. Banghart played a key role in developing the Obama Administration's cybersecurity and technology policy as the National Security Council's Director for Federal Cybersecurity, where he led efforts to reduce cybersecurity risk and improve metrics and measurement for all civilian, military, and intelligence community agencies. He also served as a primary advisor on cybersecurity incidents and preparedness and led the National Security Council's efforts to address significant cybersecurity incidents, including those at OPM and the White House, among others.

At Venable, Banghart joins Ari Schwartz, the firm's Managing Director of Cybersecurity Services, who played a major role in formulating the Obama Administration's cybersecurity and technology policy. They will work with a Venable team of litigators, former regulators, and legislative advisors to provide companies with a holistic approach to addressing cybersecurity issues.

Read Venable's press release to learn more about Banghart and Venable's cybersecurity consulting practice.


How [Not] to Get Ahead in [Native] Advertising

In its first native advertising case since releasing its Enforcement Policy Statement Addressing Native Advertising and Deceptively Formatted Advertising, the Federal Trade Commission (FTC) has removed any doubt that it will enforce those guidelines, write Venable partners Leonard L. Gordon and Amy Ralph Mudge in a recent post to the firm's advertising law blog.

If you're looking for a guide on how not to conduct a native advertising campaign, they write, the FTC's allegations in its complaint against retailer Lord & Taylor serve as a good guide. According to the complaint, Lord & Taylor launched a new Design Lab collection in the fall of 2014. As part of its marketing campaign, Lord & Taylor included a comprehensive "product bomb" social media campaign for the end of March 2015. The campaign drove engagement and sales, but ad industry publications quickly noted that the campaign seemed to run afoul of the FTC's rules on disclosing paid endorsements. The FTC appears to have agreed.

Read the full blog post to learn the three ways Lord & Taylor ran afoul of the FTC's native advertising guidance.

Read the FTC's press release and complaint.

Review the FTC's guidelines for native advertising in its recent Enforcement Policy Statement on Deceptively Formatted Advertisements.

18 Million Reasons to Think About Joint and Several Liability

The Ninth Circuit handed the FTC a big win last week and gave individuals who exercise operational control over an advertising or marketing company 18 million reasons to think long and hard about their company's practices, writes Venable partner Leonard L. Gordon in a recent post to the firm's advertising law blog.

The saga began when the former President and CEO of Commerce Planet decided to litigate against the FTC, instead of settling, after being named in the Commission's complaint alleging the company had engaged in false and deceptive advertising. After a 14-day trial, a judge in the Central District of California found that Commerce Planet had violated the FTC Act and that the executive was personally liable for the conduct that occurred during the time he exercised operational control over the company. The judge enjoined future unlawful conduct and ordered the executive to pay $18.2 million in restitution – $15 million more than he had earned during his tenure at the company.

In his appeal to the Ninth Circuit, the executive argued that imposing joint and several liability was a legal, not an equitable, remedy and was therefore beyond the power of the court in an action brought by the FTC pursuant to Section 13(b). However, the Court affirmed the broad scope of equitable monetary remedies available to the FTC and rejected a host of other arguments the executive raised. This decision, Gordon writes, is an important reminder of the broad tools the FTC can bring to bear on a defendant.

Read the full blog post to learn more about the Commerce Planet case and the executive's very bad day.

Read the Ninth Circuit's decision here.

Read this Venable blog post for a refresher on the FTC's ability to seek equitable monetary relief under Section 13 (b).

Government Puts Squeeze on Lead Generation Marketing

Online lead generation continues to face increased scrutiny from consumer groups, state regulators, the FTC, and the Consumer Financial Protection Bureau (CFPB), write Venable attorneys Jonathan L. Pompan and Alexandra Megaris in a recent client alert. Government enforcement agencies are targeting lead generation in increasingly aggressive and novel ways, and the squeeze is being felt by all industry participants as the lines of legal responsibility and accountability grow blurrier.

Regulators appear to have adopted the position that all parties involved in the generation and purchase of a lead are required to police each other's activities, or face liability for each other's noncompliance. Given the level of "blindness" that is characteristic of online lead generation—where end buyers often do not know the identity of the publishers and vice versa—this is a serious and potentially insurmountable development for many sectors of the lead gen industry.

Read the full alert to learn which practices specific regulators are targeting and how companies across the lead gen environment can mitigate risk.

Upcoming Events:

ABA Antitrust Spring Meeting Reception

April 7 | Washington, DC

You're invited to join Venable for a cocktail reception during the ABA Antitrust Section Spring Meeting at the JW Marriot Hotel on Thursday, April 7 from 6:00 p.m. to 7:30 p.m. For more information and to register, click here. We look forward to seeing you there!

Venable's 3rd Annual Advertising Law Symposium

April 12 | New York, NY

Join Venable for a complimentary full-day client program dedicated to Advertising Law at the Sofitel New York on Tuesday, April 12 from 8 a.m. to 5:30 p.m.

Hear from seasoned litigators and leading attorneys who focus on advertising and telemarketing-related issues, and top representatives from key regulatory enforcement bodies on hot topics such as native advertising, social and digital media, telemarketing, and more. This MCLE-accredited program promises to be a stimulating educational forum for exchanging ideas and engaging in strategic thinking. Network with advertising and marketing executives from some of the most renowned global brands at our cocktail reception immediately following the program.

Find the full agenda here.

Click here to register and for more information.