FTC Targets Phoenix Internet Marketer Selling Weight Loss Pills & Colon Cleansers

Arizona Republic:  “A district court ordered a Phoenix internet marketer [Central Coast Nutraceuticals, Inc.] of weight loss pills and colon cleansers to temporarily halt business, after hearing Federal Trade Commission allegations of deceptive advertising and unfair billing practices that scammed consumers out of $30 million or more in 2009. . . . [The products sold online are] AcaiPure, an acai berry supplement, as a weight-loss product, and Colopure, a colon cleansing supplement,”

Obama’s FTC Plan to Reinvent America’s News Media

Los Angeles Times:  “a year ago the new Democrat administration of Barack Obama launched a major internal study intended to design a major government rescue plan for the nation’s financially-troubled information media, primarily newspapers.”

“Would you believe: major changes to the copyright law, including government licensing provisions; government pilot programs to investigate potential new media business models, antitrust changes to allow media companies to unite on imposing online pay walls, establish a journalism division of AmeriCorps with government underwriting the training of young journalists, tax incentives per news employee, increased funding of public broadcasting, a 5% tax on consumer electronics and/or assessments on users of public airwaves.”

See “Will journalists wake up in time to save journalism from Obama’s FTC?”  “FTC protects journalism’s past,” “How not to save news – Bad gov’t ideas for journalism” and “FTC floats Drudge tax.”  See also “Lefties take anti-freedom of speech push to FCC.”  The author says Common Cause, the Joint Center for Political and Economic Studies  and the United States Hispanic Leadership Institute “seek repeal of the First Amendment’s guarantee of your freedom of speech.”

For a good summary of the FTC report go to “FTC Floats Tax-and-Subsidy Plan for Journalism.”


FTC’s Privacy Initiatives Pose a Threat to Online Behavioral Advertising

The Digital Media Lawyer Blog:  “The FTC has been working on Internet privacy policy since at least 1995.  It is currently engaged in a series of roundtables focusing on privacy and behavioral advertising.  However, the shape of any new regulations is very fuzzy. This may be because the data is conflicting on the public’s true interest in the issue, as well as the lack of a clear Congressional mandate.  At the FTC’s December 2009 privacy roundtable, panelists raised concerns that collection and third party use of browsing data invades private space by: (1) revealing a user’s innermost thoughts, such as a search history that reflect a user’s explorations of his sexual identity, (2) taking away a user’s control over her identity, such as by broadcasting compromising photos of a user at a Cancun Spring Break party to a potential employer, (3) revealing sensitive identity or financial information that can be misused by third parties to perpetrate fraud, or (4) intruding on a user’s seclusion by serving targeted ads during a browsing session that reveal that outsiders are listening in.”

Another Federal Bludgeon – More Powerful FTC Proposed

Wall St. Journal:  “In every poll and town hall meeting, Americans are demanding . . . a stronger Federal Trade Commission.  Just kidding.  But you’re about to get a more powerful FTC anyway, so look out.   Buried in the House financial reform is a provision that would muscle up the FTC and radically expand its mission. Pushed by liberal barons Henry Waxman and Barney Frank, the language would empower the FTC to impose civil penalties on companies that are first-time offenders and make it easier for the agency to concoct new rules. The law, supported by FTC Chairman Jon Liebowitz, would also invest the agency with the power to independently litigate civil penalty cases rather than going through the Department of Justice.”

Panel on the FTC’s New Endorsement and Testimonial Guides

Rebecca Tushnet’s 43(B)log:  “Today’s the effective date of the Revised Guides.  Emphasizes that the Guides themselves don’t provide for fines, though practices inconsistent with the Guides can result in FTC investigation and possible resulting fines.  Big rule: deceptiveness of endorsement/testimonial depends on the facts.   An endorsement is anything that consumers are likely to believe reflects speaker’s personal views, whether or not identical with the manufacturer’s, whether or not the speaker reads from a script.  Fictional dramatizations and statements by company spokespersons are not endorsements because they’re apparent to the audience.  Endorsements must reflect endorser’s general views and must not contain any express/implied representation that would be misleading if made by the advertiser.  Advertisers can be liable for misrepresentations and for failure to disclose material connections, as can endorsers.”

New FTC Ad Rule Creates “Target Rich Environment”

NutriSupLaw:  “David Vladeck, Director of the Federal Trade Commission Bureau of Consumer Protection said that the FTC’s new Guides Concerning the Use of Endorsements and Testimonials in Advertising creates a “target rich enviornment” in which they intend to pursue violators using all the resources at their disposal.  And when the 1000+ enforcement personnel at the FTC run out, FTC plans to call on the state attorneys’ general. When the AG’s are too busy, Vladeck says that they will do as the FDA does and publish warning letters on the internet in order to ‘bully companies into compliance.'”

Despite the backpeddling FTC has done in the media recently, Vladeck made it clear that he will enforce Section 5 of the Federal Trade Commission Act and the endorsement guides. It was as if Vladeck was drawing imaginary targets on foreheads around the room…

Where Did You Get That Keychain?

City-Journal:  Overlawyered’s Walter Olson wrote an excellent article on the FTC’s new ad/testimonial rules.  “New guidelines on freebies target bloggers but go easy on traditional outlets.  If there was any doubt that sweeping regulation—big, shoot-for-the-moon regulation—was back in favor in Washington, it was laid to rest on October 5, when the Federal Trade Commission published 81 pages of new guidelines asserting authority over product endorsements and testimonials, particularly those published in blogs, Facebook, Twitter, and other social media. From the early coverage, you might have thought the guidelines were mostly of concern to the calculating Madison Avenue types who send baby-product and cosmetics swag to mommy-bloggers as part of nefarious “buzz marketing” campaigns. But the new guidelines are much broader than that. They lay out potential theories of liability for many bloggers and online commentators with more traditional literary, political, or journalistic profiles.”

See the FTC’s new guidelines.

See also Walter Olson’s October 16, 2009, post on this topic.

The Future of the Internet

Mises Economics Blog:  “There’s concern throughout the Internet after the Federal Trade Commission announced today

[October 5, 2009] that it has the power to regulate blogs, specifically blogs that endorse commercial products. The unelected FTC – composed entirely of Bush appointees – now mandates that “bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.” This is merely a first step towards regulating the content of blogs themselves, as anyone who offers a personal testimonial about any product will be liable, under the Federal Trade Commission Act, should the FTC disagree with your personal experiences.

If you’re wondering just how big a mess the FTC can make, consider a decision published just last week by D. Michael Chappell, the FTC’s chief administrative law judge. Judge Chappell caught FTC prosecutors in a blatant attempt to lie their way out of a bad situation arising from yet another misguided attempt to micromanage the World Wide Web. It’s a case that demonstrates the FTC’s unique combination of stupidity and narcissism.

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