Data Privacy Monitor

Data Privacy Monitor

Commentary on Data Privacy & Information Security Subjects

All Native Advertising is Not Equal: Why that Matters Under the First Amendment and Why it Should Matter to the FTC – Part IV

Posted in Behavioral Advertising

In this five part series, originally published in the Summer 2014 edition of the Media Law Resource Center Bulletin,[1] we take an in-depth look at the native advertising phenomenon and the legal issues surrounding the practice.  After canvassing the many faces of native advertising and the applicable law, the series ultimately examines the pervasive assumption that all native advertising is, and should be regulated as, “commercial speech.”  This assumption presumes that all native advertising is equal under the eyes of the law, and we come to the conclusion that it probably isn’t. Native advertising that is closer to pure content than pure commercial speech may deserve greater or even full First Amendment protection, which would carry significant implications for government regulation[2].

Part 1: Introduction to Native Advertising

Part 2: Early Native Advertising and the Current FTC Regulatory Landscape

Part 3: Evolution of the Commercial Speech Doctrine

Part 4 below examines the important legal distinction between “Commercial Speech” and “Non-Commercial / Inextricably Intertwined Speech” 

—PART IV—

Commercial and Noncommercial Inextricably Intertwined Speech

The Bolger court found that the mailings constituted commercial speech “notwithstanding the fact that [informational pamphlets] contain[ed] discussions of important public issues.”[3] Advertising that “links a product to a current public debate” is not automatically transformed into constitutionally protected noncommercial speech.[4] This is because “a company has the full panoply of protections available to its direct comments on public issues, so there is no reason for providing similar constitutional protection when such statements are made in the context of commercial transactions.”[5] And in that circumstance, “advertisers should not be permitted to immunize false or misleading product information from government regulation simply by including references to public issues.”[6] Continue Reading

Are you—or someone you love—a content hoarder?

Posted in Information Governance

Hoarding is defined clinically as embodying “a persistent difficulty discarding or parting with possessions because of a perceived need to save them.” That accumulation occurs regardless of the actual value associated with the possessions, and often stands in stark contrast to what an outsider or “normal” person’s perception.

The idea of accumulating vast quantities of useless things is so atypical—and so gut-wrenchingly abhorrent to most Americans—that it spawned its own cottage industry, where A&E bankrolled six seasons of “Hoarders,” and Discovery Health provides inside looks into the issue with its “Buried Alive” series. But part of the true impact of the show is the viewers’ self-reflections, whether those are, “at least my collections don’t function in the same way,” “at least I’m not hurting anyone with my habits,” and the ever popular, “why can’t those people just see how worthless that stuff is?”

Self-reflection is a powerful tool, but ingrained habits are difficult to appraise honestly, and even more difficult to address. And, ironically, people who would never dream of collecting Tupperware bowls, used wrapping paper, or soiled Beanie Babies™ fail to acknowledge those exact same tendencies when it comes to hoarding electronically stored information (“ESI”).

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Why Worry About a Little Skimmer?

Posted in Credit Card, Retail

Merchants—rightfully so—are worried about securing their payment card environments so that their name does not appear in a headline discussing how millions of cards were stolen from them. Faced with the challenge of evaluating the use of P2PE and tokenization, the conversion necessary to prepare for the October 2015 EMV liability shift, reading the tea leaves on what mobile payment technology will catch on, and accommodating the marketing department’s appetite for capturing customer transaction data, who has time to worry about small issues like a skimmer? After all, a merchant would never have to post anything on their website, issue a press release, and e-mail customers over finding a skimmer on one checkout lane in one store, right? Wrong.

Skimming devices can capture the data contained in “track 1” of the magnetic stripe on the back of a payment card. Thus, a skimming event can result in an unauthorized person gaining access to the cardholder’s name and payment card account number, which meets the definition of “personal information” under state breach notification laws. No problem you say – we will just mail notification letters to the small number of affected individuals. There are usually two primary problems: (1) merchants are often not able to precisely determine when the skimmer was first installed, so it is difficult to determine what cards were affected; and (2) for card present transactions, even if the merchant knows which cards were affected, most merchants are not able to match the affected card number to the cardholder’s name or address. When state breach notification laws are triggered but the merchant does not have names and addresses, and, thus, cannot mail notification letters to the affected cardholders, the substitute notification provisions of state breach notification laws apply. Continue Reading

Yikes, Yelp! Targeted In FTC’s Stepped Up Enforcement of Children’s Privacy – General Audience Services Take Heed

Posted in COPPA

Signaling a predicted renewal of enforcement of the federal children’s privacy law following broad expansion last year of who and what is covered by the rules, the FTC has filed and settled two recent law suits against mobile app publishers, resulting $750,000 in civil penalties. Most noteworthy is that only one of the two is directed at children. Operators of even general audience web sites, mobile applications and online services (“Service(s)”) have certain obligations under the Children’s Online Privacy Protection Act (“COPPA”), and its corresponding regulations, regulate the collection of certain data from children under 13 years of age (“Child” or “Children”). FTC settlements of COPPA violations typically range in the six to seven figure range. Here, as is typical, the defendants entered into civil settlements with the FTC whereby one agreed to pay $450,000 and the other is paying $300,000. Other details of the settlements are detailed here. COPPA compliance should be part of the data privacy and security assessment Service providers conduct at least annually, and with each material Service update.

The latest FTC actions filed in federal court on September 16, follow more than a year hiatus in enforcement while the Commission staff worked to educate industry of the rule changes, target the popular business review Yelp! and a mobile game publisher named Tinyco. Notably, Yelp! does not target children. However, it is alleged to have made a common mistake of general audience Services even under the old rule – to collect user age at registration without blocking, and preventing resubmission attempts, by those indicating they are under 13. Another frequent mistake is to explain to users they must be 13, which is deemed impermissible coaching, or failure to take reasonable measures to prevent additional submission attempts, such as dropping a cookie that prevents submission for a reasonable period, generally considered to be 24 to 72 hours. The new Yelp! suit is a good example of why all Service operators need to be aware of COPPA obligations. Continue Reading

All Native Advertising is Not Equal: Why that Matters Under the First Amendment and Why it Should Matter to the FTC – Part III

Posted in Behavioral Advertising

In this five part series, originally published in the Summer 2014 edition of the Media Law Resource Center Bulletin,[1] we take an in-depth look at the native advertising phenomenon and the legal issues surrounding the practice.  After canvassing the many faces of native advertising and the applicable law, the series ultimately examines the pervasive assumption that all native advertising is, and should be regulated as, “commercial speech.”  This assumption presumes that all native advertising is equal under the eyes of the law, and we come to the conclusion that it probably isn’t. Native advertising that is closer to pure content than pure commercial speech may deserve greater or even full First Amendment protection, which would carry significant implications for government regulation[2].

Part 1: Introduction to Native Advertising

Part 2: Early Native Advertising and the Current FTC Regulatory Landscape

Part 3 below provides a quick overview of the commercial speech doctrine the protections traditionally afforded to advertisers by the First Amendment

 

—PART III—

Commercial Speech and the First Amendment

One question that curiously has only sporadically come up in the native discussion is the level of First Amendment protection that should be afforded to such speech. From a constitutional and regulatory perspective, the critical question is whether native is considered “commercial” speech under Supreme Court precedent. If native is considered commercial speech, then government regulations are subject to intermediate judicial scrutiny. If native is considered noncommercial, then government regulations are subject to the more heightened strict scrutiny standard.[3] This section provides a primer on the First Amendment and commercial speech before turning to its application to Native Advertising. Continue Reading

Federal Magistrate Recommends Dismissing TCPA Class Claims Against Coke

Posted in Privacy Class Actions

Responding to an invitation to text can satisfy TCPA’s Express Consent Requirement

In a Telephone Consumer Protection Act (TCPA) putative class action against Coca-Cola and its marketing agent, a Northern District of Alabama magistrate judge recommended dismissal on September 3, 2014 of most of the plaintiff’s claims on grounds that the plaintiff gave Coca-Cola prior express consent to send text messages to his mobile phone.

The plaintiff alleged that he and the putative class members responded to a Coca-Cola scoreboard message at a college football game asking fans to “vote” for their favorite team using their mobile phones.  The plaintiff alleged that, after voting, he received a series of unsolicited text messages on his mobile phone.  Based on this, the plaintiff alleged that Coca-Cola unlawfully used an automated telephone dialing system (“ATDS”) to text his mobile phone and that Coca-Cola unlawfully texted his mobile number in violation of the national do-not-call registry on which the number was allegedly listed.

Coca-Cola filed a motion to dismiss both the ATDS claim and the do-not-call registry claim. On the ATDS claim, Coca-Cola unsuccessfully argued that a text message is not a call under the TCPA (an argument that courts have almost universally rejected), and that Coca-Cola did not use an ATDS in dialing the plaintiff’s mobile number (a closer question under current law because the parameters of what qualifies as an ATDS are constantly evolving with technology).  Coca-Cola was successful, however, in arguing that it had a complete affirmative defense to the plaintiff’s claims because the plaintiff gave “prior express consent” by texting his “vote” to Coca-Cola.  In agreeing with Coca-Cola on the express consent argument, the Court adopted a fairly expansive—but well-supported by precedent—definition of consent as “knowingly releasing” a mobile number to a potential caller.  In so finding, the Court noted that the plaintiff could not “plausibly claim that he was simply voting for his favorite team with no expectation of receiving ‘telemarketing’ messages in return.”

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All Native Advertising is Not Equal: Why that Matters Under the First Amendment and Why it Should Matter to the FTC – Part II

Posted in Behavioral Advertising

Editor’s Note: This blog post was originally published on September 8, 2014, courtesy of iMedia Connection’s Blog. It is repurposed with permission.

In this five part series, originally published in the Summer 2014 edition of the Media Law Resource Center Bulletin,[1] we take an in-depth look at the native advertising phenomenon and the legal issues surrounding the practice.  After canvassing the many faces of native advertising and the applicable law, the series ultimately examines the pervasive assumption that all native advertising is, and should be regulated as, “commercial speech.”  This assumption presumes that all native advertising is equal under the eyes of the law, and we come to the conclusion that it probably isn’t. Native advertising that is closer to pure content than pure commercial speech may deserve greater or even full First Amendment protection, which would carry significant implications for government regulation[2].

Part 1: Introduction to Native Advertising

Part 2 below examines the genesis of native advertising and how existing FTC regulations may be applicable to the practice today. 

— PART II —

The Early Days of Native: Advertorials, Infomercials and Hybrid Ads

With all the hype surrounding native, you would think it is a new development. However, native advertising has actually been around in one form or another for over a century.[3] Some have cited so-called “reading notices” in the late 19th century as the genesis of sponsored content.[4] In this pre-FTC era, these reading notices were essentially paid news stories mentioning a brand or company.  These practices were then followed by what some would say was the first golden age of native if you will, the early days of radio. Programs like the Texaco Star Theater,[5] sponsored by the Texaco Oil Company (now Chevron), presented sponsored content as long-form radio dramas. A generation later, with more and more newspapers and magazines relying on ads to generate revenue, the FTC questioned whether restaurant ads in the format of news articles that failed to identify themselves as ads to consumers required disclosure.[6] A generation after that brought the TV infomercials and advertorials that plagued the late night TV landscape of the 80’s and 90’s. Many view native today as simply the next evolution of print and television ad practices often dubbed as “hybrid advertising” by regulators.

The comingling of editorial and advertising content in these hybrid television advertisements (e.g. long-form infomercials) has long been subject to FTC regulation. The first and most famous of these old hybrid TV ads was the infamous FTC BluBlocker infomercial case from the 1980’s.[7] BluBlocker sunglasses produced a 30 minute TV ad called the “Consumer Challenge.”[8] The show featured a fake news team, “spontaneous” man-on-the-street trials of BluBlocker sunglasses, and an “independent” expert review of the product.[9] The FTC brought suit because the company misrepresented the BluBlocker TV spot as solely editorial content and hid the fact that the manufacturers of BluBlockers had produced the copy.[10] BluBlocker has since recovered and turned to slightly more credible endorsements and product placements:

Click on Image for Larger View

Click on Image for Larger View

Native advertising has also been around for some time in the online advertising space.  Some of the most commonly encountered examples of native advertising are the sponsored search results displayed by search engines.  The practice of placing paid search results alongside organic search results has been in place since the 1990’s and is commonly considered native advertising (IAB refers to this as “Paid Search Units”[11]).

The Current FTC Regulatory Landscape

As a result of the recent rise of native advertising, there has been a very vocal discussion about the potential need for additional regulation.  As mentioned above, the FTC held a day long Native Workshop last December with panel discussions including regulators, publishers, advertisers, academics and consumer advocates.[12] The FTC Workshop covered a wide array of native issues, such as best practices, adequate disclosures, and sharing of native across social media.[13] At various points, the FTC panel participants raised the question of whether additional guidelines or regulations specific to native would be necessary.[14] The FTC is not the only one raising this question; some self-regulatory organizations have organized committees to craft industry native guidelines.[15] And as discussed above, the IAB has released its own “Playbook” on native advertising.[16]

But as the FTC panelists were quick to point out at the Native Workshop, and as these authors have written before,[17] the existing regulatory framework governs many if not most aspects of native advertising.  The core of advertising law basically requires marketers to tell the truth and not to be sneaky—this principle applies equally to digital marketers just as it does with off-line marketers.

All advertising law begins and ends with these fourteen words of Section 5 of the FTC Act—“unfair or deceptive acts or practices in or affecting commerce are hereby declared unlawful.”[18] From this broad language, at least four core principles flow that form the foundation of advertising law:

  • Advertising must be truthful and not misleading;
  • Advertising must substantiate any express or implied claims;
  • Advertising cannot be unfair or deceptive; and
  • Any disclosures necessary to make an ad accurate must be clear and conspicuous.

The FTC has released specific guidance and reports clarifying how these four basic tenets apply in the online world and—as the FTC panelists made plain at the workshop—to native advertising:

  • The FTC’s Dot Com Disclosures: Information about Online Advertising, revised in March of 2013, provide guidance on digital advertising campaigns.[19] The Dot Com Disclosures establish the principle that online advertising needs to be disclosed as such to the consumer.  The guidelines, among other things, encourage advertisers to place disclosures as close as possible to the relevant claim and that disclosures need to fit into the context in which the advertising appears, e.g., in Tweets or on mobile screens. [20]
  • The FTC’s Guidance on Online Endorsements provides relevant guideposts on certain forms of native advertising.[21] The online endorsement guidelines make clear that the relationship between advertisers and content creators, like bloggers, should be clearly and conspicuously disclosed.[22] Any “material connection”, e.g., free products or money provided to the author, must be disclosed. This is particularly relevant in the context of paid endorsements on social media.
  • The FTC’s Guidance on Sponsored Search Engine Results offers guidance for native advertising as well, particularly relevant to Paid Search Units.[23]In the search engine guidelines, the FTC recommends that any sponsored search results should be clearly set apart from naturally appearing search results. The FTC recommends such methods as shading and borders around the sponsored results to set them apart.

Finally, it is worth mentioning that industry self-regulatory organizations have also begun to address native advertising. As referenced above, the IAB recently promulgated its own “Native Advertising Playbook.” In addition, in September 2013 the American Society of Magazine Editors (ASME) amended its Guidelines for Editors and Publishers to address native advertising.[24] The amendments reflected the principle that native advertising “should include a prominent, unambiguous statement that the content has been created by a marketer and that the marketer has paid for its publication.”[25] Many publishers have their own internal publishing codes of conduct and a few have implemented their own native advertising rules. For instance, The Atlantic recently enacted native-specific guidelines providing a two-stage review process, conspicuous “sponsored content” labels, and monitoring of user comments.[26]

On the self-enforcement side, in October 2013 the NAD issued its first decision addressing native advertising practices, finding that Qualcomm was not obligated to continually identify itself as the author of several sponsored content articles after expiration of an advertising agreement because Qualcomm did not author the content.[27] In another recent decision, the NAD concluded that SHAPE Magazine’s plug of its “SHAPE Water Booster” products in a news article about the benefits of hydration failed to notify consumers the advertising nature of what appeared to be editorial content.[28]


[1] The MLRC has graciously allowed republication of this article. For more information on the MLRC check out www.mlrc.org.

[2] Disclaimer – the MLRC Journal is a legal journal. With that in mind, we give the caveat up front that our writing style here is going to be a little less loose and little more dense that our typical blog.

[3] See, e.g. FTC v. Muenzen Speciality Co., 1 F.T.C. 30 (1917); see also FTC Workshop at 11.

[4] Jack Shafer, What’s Worse than Sponsored Content? The FTC Regulating It, Dec. 6, 2013, Reuters, available at http://blogs.reuters.com/jackshafer/2013/12/06/whats-worse-than-sponsored-content-the-ftc-regulating-it/.

[5] For a description of the Texaco Star Theater, see http://en.wikipedia.org/wiki/Texaco_Star_Theater.

[6] FTC Workshop at 13-14.

[7] See Charles Storch, FTC Files 1st Complaint Over Extended TV Ads, Nov. 2, 1988, available at http://articles.chicagotribune.com/1988-11-02/business/8802120522_1_ftc-complaint-federal-trade-commission-consent-agBluBreement; In the Matter of JS&A Group, Inc, 111 F.T.C. 522 (1989).

[8] n the Matter of JS&A Group, Inc, 111 F.T.C. 522 (1989).

[9] Id.

[10] Id.

[11] IAB Playbook, supra note 4.

[12] Blurred Lines: Advertising or Content? An FTC Workshop on Native Advertising, Federal Trade Commission, Dec. 4, 2013, http://www.ftc.gov/news-events/events-calendar/2013/12/blurred-lines-advertising-or-content-ftc-workshop-native.

[13] Sophia Code, FTC Explores Native Advertising, Newspaper Association of America, Dec. 17, 2013, available at http://www.naa.org/News-and-Media/Blog/FTC-Explores-Native-Advertising.aspx.

[14] See, e.g., FTC Workshop at 263, 300.

[15] IAB, for example, formed a “Native Advertising Taskforce”, see http://www.iab.net/nativeadvertising.

[16] IAB Playbook, supra note 4.

[17] Bohorquez & Pate, A Guide to Native Advertising’s Legal Issues, iMediaConnection, Dec. 2, 2013, http://www.imediaconnection.com/content/35490.asp#singleview.

[18] See 15 U.S.C. § 45.  It is important to note that this language gives the FTC’s authority over two broad categories of acts or practices—(1) unfair acts or practices and (2) deceptive acts or practices. “Unfair acts or practices” are defined as those that “cause[] or [are] likely to cause substantial injury to consumers which [are] not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition.” 15 U.S.C. § 45(n).  Advertising is a “deceptive” act or practice if, (1) there is a representation or omission of information that is likely to mislead the consumer acting reasonably under the circumstances; and (2) the representation or omission is ‘material’ – defined as “likely to affect the consumer’s choice or conduct regarding a product.” FTC Deception Policy Statement, available at http://www.ftc.gov/ftc-policy-statement-on-deception.

[19] Dot Com Disclosures, FTC, Mar. 12, 2013, available at http://www.ftc.gov/opa/2013/03/dotcom.shtm.

[20] See Fernando Bohorquez Jr., New FTC Dot-Com Rules Offer Digital Ad Guidelines for the Facebook/Twitter Age, Broadcasting & Cable, May 1, 2013, available at http://www.broadcastingcable.com/news/news-articles/new-ftc-dot-com-rules-offer-digital-ad-guidelines-facebooktwitter-age/114423.

[21] Guides Concerning Use of Endorsements and Testimonials in Advertising, 16 C.F.R. 255, available at http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=4bd1a26eeca72bcf42950c000e22cf5b&rgn=div5&view=text&node=16:1.0.1.2.22&idno=16.

[22] Id.

[23] FTC Staff to Search Engines: Differentiate Ads from Natural Results, FTC, June 25, 2013, available at http://business.ftc.gov/blog/2013/06/ftc-staff-search-engines-differentiate-ads-natural-results.

[24] ASME Statement on Native Advertising, American Society of Magazine Editors, Sep. 2013, available at http://www.magazine.org/asme/editorial-guidelines/asme-statement-native-advertising.

[25] Id.

[27] See Allison Grande, Qualcomm Cleared in Self-Regulator’s 1st Native Ad Probe, Oct. 3, 2013, available at http://www.law360.com/articles/477916/qualcomm-cleared-in-self-regulator-s-1st-native-ad-probe.

[28] In re American Media, Inc. (Shape Water Booster), Case No. 5665, Dec. 18, 2013, National Advertising Division. According to the NAD, the article about hydration, “Water Works”, was titled and formatted to appear as plain editorial content. And even though consumers might be on alert of the obvious connection between SHAPE Magazine and SHAPE-branded products, “consumers may reasonably believe that editorial recommendations in SHAPE magazine are independent of the influence of a sponsoring advertiser.” Id. at 4. Accordingly, the NAD recommended that SHAPE clearly and conspicuously designate content as advertising when it advertises SHAPE products going forward. Id.

Credit Unions Continue to Demand New Data Security Standards for Retailers and Right to Recover Losses After a Breach

Posted in Credit Card, Data Breaches

On September 3, 2014, following the news of a possible breach at Home Depot (which was confirmed on September 8), the National Association of Federal Credit Unions (NAFCU) called on Congress to enact new legislation to hold retailers more responsible for data security breaches. “These continued data breaches will have a chilling effect on our consumer confidence and our economy at large unless Congress holds retailers to the same strict standards of data security and breach notifications that financial institutions must adhere to,” NAFCU President and CEO Dan Berger said in the statement. Financial institutions—including credit unions—are subject to data security standards imposed by the Gramm-Leach-Bliley Act, which does not apply to retailers.

Citing losses estimated at $30 million due to last year’s Target breach, the NAFCU’s August 21, 2014 letter asked Congress to impose the following requirements on retailers as part of new data security legislation:

  • that retailers be held accountable for the costs of data breaches that result on their end;
  • that retailers be subject to the data security standards imposed on financial institutions under the Gramm-Leach-Bliley Act;
  • that retailers that have suffered a data breach make timely disclosures to alert consumers; and
  • that retailers bear the evidentiary burden of proving lack of fault after a data breach.

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FTC Final Orders with Fandango and Credit Karma Provide Guidance on Mobile App Security

Posted in Mobile Privacy

In August 2014, the Federal Trade Commission (“FTC”) approved final orders resolving its actions against Fandango, LLC (“Fandango”) and Credit Karma, Inc. (“Credit Karma”) for allegedly misrepresenting the security of their mobile apps to customers because of alleged security flaws in both mobile applications. Companies can look to the complaints and settlement orders for guidance in implementing security measures for their own mobile apps.

The FTC’s complaints alleged that the companies’ mobile apps left customers’ sensitive personal information, including credit card information and Social Security numbers, vulnerable to interception by outside parties because the companies’ allegedly disabled the Secure Socket Layer (“SSL”) certificate verification process in their mobile apps. An SSL certificate is a protocol used to establish authentic encrypted connections. SSL protocol is considered by some to be an industry standard for mobile applications due to the frequency with which mobile users connect to the internet through public Wi-Fi. When a mobile app connects to an online service, the service presents an SSL certificate to the device to authenticate its identity. Once the app validates the SSL certificate, an encrypted connection is established with the app so that a customer can send information to the service securely. SSL certificates protect applications from “man-in-the-middle” attacks, where an attacker could use invalid certificates to intercept the connection between the app and the online service and obtain personal information transmitted by the user of the app to the online service. The Apple iOS and Android operating systems both use the SSL verification process by default and warn developers against disabling the defaults. Both Fandango’s and Credit Karma’s mobile apps contained in-app statements that customer information is transmitted or stored securely by the companies’ apps. The FTC’s complaints alleged that Fandango and Credit Karma overrode the default SSL certificate validation settings without implementing alternative security measures to compensate for the lack of the SSL certificate validation, and, thus, misrepresented to customers the security of personal information transmitted or stored by the companies’ mobile apps.

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All Native Advertising is Not Equal: Why that Matters Under the First Amendment and Why it Should Matter to the FTC – Part I

Posted in Behavioral Advertising

Editor’s Note: This blog post was originally published on September 2, 2014, courtesy of iMedia Connection’s Blog. It is repurposed with permission.

In this five part series, originally published in the Summer 2014 edition of the Media Law Resource Center Bulletin,[1] we take an in-depth look at the native advertising phenomenon and the legal issues surrounding the practice.  After canvassing the many faces of native advertising and the applicable law, the series ultimately examines the pervasive assumption that all native advertising is, and should be regulated as, “commercial speech.”  This assumption presumes that all native advertising is equal under the eyes of the law, and we come to the conclusion that it probably isn’t. Native advertising that is closer to pure content than pure commercial speech may deserve greater or even full First Amendment protection, which would carry significant implications for government regulation[2].

Part 1 below provides an overview of the series and introduces the concept and practice of native advertising. 

— PART I —

Overview of the Five Part Series

Last December, the Federal Trade Commission held a workshop entitled “Blurred Lines: Advertising or Content” to address the latest and greatest darling of the digital media advertising world – Native Advertising, otherwise known as sponsored content, sponsor generated content, branded content, brand journalism, or some would say, the less flattering infomercial or advertorial. The FTC Workshop capped a year where Native Advertising moved to the forefront of the publishing and advertising industries and the FTC. On its surface, much of the debate at the FTC Workshop and elsewhere centers on deception, namely whether consumers can distinguish between paid ads and editorial content. As FTC Chairwoman Edith Ramirez put it: “while native advertising may bring some benefits to consumers, it has to be done lawfully…by presenting ads that resemble editorial content, an advertiser risks implying, deceptively that information comes from a non-biased source.” This may hold true for certain forms of native advertising but maybe not for all. As the FTC Workshop industry panelists explained, native advertising covers a broad range of material, from in feed ads for products, to editorial content that may not even reference a product or a brand.  To a certain extent, the native advertising regulation discussion presumes that all native advertising constitutes commercial speech under the First Amendment. However, whether native is classified as “commercial” is a profound legal determination as commercial speech is traditionally subject to less First Amendment protection and more regulation than other forms of more protected speech. The current debate therefore begs the underlying constitutional question—is all native advertising actually commercial speech?

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