There is nothing new about the FTC bringing enforcement actions based on deceptive advertising practices. Those cases are the FTC’s bread and butter. But in recent years the FTC has been pushing forward with cases that address the increasingly complex network of entities involved in marketing, including companies that collect, buy, and sell consumer information and play other behind-the-scenes roles in marketing campaigns. The FTC has also taken a strong interest in deceptively formatted advertising, including “native” advertising that does not adequately disclose sponsorship connections. A recent Court of Appeals decision highlights the potential for any internet company to be liable for a deceptive advertising campaign that it had a hand in orchestrating – even if the company itself does not create the advertising material.
The decision in this case, FTC v. LeadClick Media, LLC, comes from the U.S. Court of Appeals for the Second Circuit and is a significant victory for the FTC and its co-plaintiff, the State of Connecticut. Specifically, the decision holds that online advertising company LeadClick is liable for the deceptive ads that were published as part an advertising campaign that it coordinated, even though LeadClick itself did not write or publish the ads. In addition, the Second Circuit rejected LeadClick’s argument that its ad tracking service provided it with immunity from the FTC’s action under Section 230 of the Communications Decency Act (CDA).
Continue Reading Second Circuit Holds Marketing Campaign Organizer Liable Under FTC Act for Deceptive Representations of Its Marketing “Affiliates”