No More Social Fix for Cali Kids?

New state bill targets social media addiction

Vertigo 2.0

There’s a tidal wave of anger against social media. And every time it seems to crest, another swell comes up from behind to give it further strength.

Duty Free, or Dutiful?

The latest attack is California State Assembly Bill 2408, introduced by Republican Assembly member Jordan Cunningham. This bill, known as the “Social Media Platform Duty to Children Act,” proclaims that the state must “take reasonable, proportional, and effective steps to ensure that its children are not harmed by addictions of any kind.” That includes “compulsive and excessive social media use,” which is acknowledged by “a broad diversity of psychologists and psychiatrists in the field of addiction, as well as scientists, doctors, and other researchers.”

(For the record, there are those who disagree.)

The bill would impose on an operator of a social media platform a duty “not to addict child users … [through] the use or sale of a child user’s personal data [or] the development, design, implementation, or maintenance of a design, feature, or affordance.” Failure to uphold this imposed duty can cost an operator up to $25,000 per violation. That’s in addition to actual damages, punitive damages, litigation costs, “twice the amount of reasonable attorney’s fees” and “any other relief the court deems proper.” A “knowing or willful violation” of that duty will subject an operator to a civil penalty of up to $250,000 per violation.

The Takeaway

Legislation like this could cause real challenges for marketers because the bill doesn’t shed much light on the practices it would penalize:

 “Addiction” means use of one or more social media platforms that does both of the following: (i) Indicates preoccupation or obsession with, or withdrawal or difficulty to cease or reduce use of, a social media platform despite the user’s desire to cease or reduce that use, or (ii) causes or contributes to physical, mental, emotional, developmental, or material harms to the user.

Determining whether social media platforms are directly responsible for these phenomena strikes us as an incredibly difficult task.

Not surprisingly, tech leaders are up in arms. TechNet, an industry leadership group, claimed that should the new law pass, “social media companies and online web services would have no choice but to cease operations for kids under 18 and would implement stringent age-verification in order to ensure that adolescents did not use their sites.”

From a parent’s perspective, that might not be such a bad thing – but that does not address the underlying questions about the infirmities in the law itself.

The bill passed the California Assembly at the end of May and is now moving forward for review by the state senate. Perhaps the debate that will ensue when it arrives there will make things clearer.

FCC Targets Gateways Dumping Robocalls on US Shores

New provisions extend mitigation efforts to voice ‘on-ramps’

Double-O-Rosenworcel

In a move that finally lends the STIR/SHAKEN caller ID authentication protocol the cosmopolitan air that it deserves, the Federal Communications Commission (FCC or Commission) is making international moves.

Specifically, the FCC has adopted new rules that extend many of the provisions that govern U.S. telecom providers to international gateway providers in an effort to further stem robocall activity.

According to the Commission, “international robocall scams are widely understood to be a huge part of the robocall and spoofing problem facing American consumers and businesses.” A 2021 survey reported that 65 percent of voice service providers tagged for transmitting illegal robocalls were either foreign-based or gateway providers. It therefore stands to reason that robocalls coming into the United States from these sources might be missed by protocols that were designed to only address U.S.-based voice networks.

So, what’s in store for foreign “gateway” providers?

The Takeaway

Gateway providers will be required to (i) participate in robocall mitigation (including blocking efforts), (ii) take responsibility for illegal robocall campaigns on their networks, (iii) cooperate with FCC enforcement efforts and (iv) quickly respond to efforts to trace illegal robocalls to their source. Failure to comply with these rules could subject the provider to mandatory blocking of any calls placed through its service by other network participants, which would effectively cancel its operations.

Foreign gateway providers? Check. Domestic networks? Check. Is there anything the FCC hasn’t covered yet? Well, yes. In the same press release, the Commission turns its attention to U.S.-based intermediate providers, which are “some of the few remaining participants in the voice service ecosystem to not yet fall under requirements to file a certification and mitigation plan in the Robocall Mitigation Database,” the Commission notes. The FCC will seek public comment on “how, if and when” robocall prevention efforts will be applied to this last group.

Stay tuned.

Boohoo Won’t Cry Over Pricing Suit

But a change of pace might have kept it out of court

Sunshine at Night

The tremendous success of “fast fashion” brand Boohoo Group – its profits actually went up during the height of the pandemic – means that some of the controversies that have shadowed the clothing company have remained obscure.

In its home – the United Kingdom – Boohoo has been associated with reports, both foreign and domestic, of poor working conditions and substandard wages for its garment workers and the workers of its suppliers. The eye-candy vibe of the company’s comfortable, colorful clothing is belied by these stories, but Boohoo soldiers on, scooping up saucily named smaller brands like Nasty Girl and PrettyLittleThings and adding their wares to its quite affordable arsenal.

In the United States, Boohoo has only a virtual presence – it entered the online market in 2012. However, that has not insulated it from its share of legal troubles stateside. 

Slightly Lower Stakes

The company is currently getting a taste of American-style litigiousness. This time it’s not about labor conditions or hourly wages. Rather, it’s a dispute keyed to Boohoo’s app-only American presence.

Back in 2020, a trio of California consumers – Olivia Lee, Farid Khan and Haya Hilton – brought class actions against Boohoo, PrettyLittleThings and Nasty Girl brands in the Golden State’s Central District, which consolidated these claims into one complaint. The common subject matter? False reference pricing.

Plaintiff alleged that Boohoo advertised “fake and inflated comparison reference prices to deceive customers into a false belief that the sale price [was] a deeply discounted bargain price.” Original or “pre-sale” prices were rarely advertised, and Boohoo couldn’t claim that other retailers sold the same products at the “original price” because the Boohoo website was the only available channel in the U.S. from which purchasers could obtain Boohoo products.

Plaintiffs sought $5 million from the Boohoo brands for violations of California’s Consumer Legal Remedies Act, Unfair Competition Law and False Advertising Law; fraudulent concealment; fraud; and unjust enrichment.

The Takeaway

Boohoo’s response consisted of fairly easy-to-predict counterarguments denying that consumers had suffered any tangible harm, and less-predictable arguments, such as declaring California’s reference pricing law unconstitutional because it violates free speech. Despite – or perhaps because of – these arguments, settlement talks, which have been underway since late last year, drew to a successful close at the end of May.

The settlement terms are interesting. Boohoo has agreed to distribute $18.8 million worth of gift cards to nearly 1.9 million class members. We’ll help you with the math – that’s a $10 gift card to each affected class member. Additionally, the company will grant class members free shipping on their gift card purchases, which adds an approximate $13.7 million in value to the consumer side of the deal. The good news: Because of Boohoo’s affordable product line, there are plenty of products on its site that a $10 gift card will cover just fine.

The consolidated cases are the latest in a slew of false reference price cases filed in California, which continue to proliferate.

Whether you’re in retail or online-only sales, there’s no need to fear. It’s not difficult to at least prepare for such a suit. First, avoid remaining in “perpetual sale” mode. Always featuring markdowns is a sure way to call sale prices into question. You should also post a clear statement identifying the source of the reference price – e.g., a recent price offered at your store, general market prices, MSRP – that can provide the baseline for the discount.

Clarity is your friend.

NAD Filters Out Buggy Effectiveness Claims

The more ambiguous the claim, the better its chance for being zapped

Delayed Action

COVID-19 being what it is, we’re actually surprised that we just heard about a marketing dispute regarding air purification.

You’d think that rival technology companies would be calling each other out on the failed claims of various COVID-related product lines from masks to hand sanitizers. But we haven’t seen much of it. In fact, this challenge before the National Advertising Division (NAD) to RGF Environmental Group’s REME-brand and Guardian QR+ air purification devices is one of only a few we’ve encountered.

Perhaps now that the emergency of COVID’s early years has somewhat abated, the nation can relax and get back to what it loves most – trying to take the competition apart over shaky marketing claims.

The Mold Standard

The REME and Guardian claims were challenged by Synexis, a rival filter manufacturer. The dispute began promisingly enough for RGF. The broadest claims – that REME HALO air filters are “whole home” systems – were given a pass by NAD.

A word about the technology – many “whole home” purification systems are installed directly within air ducts in the home. NAD found RGF’s claims about its whole-home systems, including their ability to kill bacteria and viruses in the air and on surfaces, to be generally sound.

Every company that makes performance claims should read and re-read NAD’s endorsement of RGF’s claims. “RGF provided extensive testing and analyses of its products, conducted by many well-credentialed third-party laboratories and academic researchers, which yielded consistent results over many years demonstrating an improvement in indoor air quality.”

That’s the standard for passing NAD review.

The Takeaway

Interestingly, RGF got hung up on semantics when it came to other claims. While its whole-home claims such as “Whole Home Air Purification System … Kills Bacteria and Viruses on Surfaces” and “In The Air … Patented Technology, Third-Party Tested, Validated and Proven” were bracingly specific, other claims were not. Take, for example, the following claim that did not pass muster: “REME HALO ‘Kills up to 99% of bacteria, mold and viruses.’”

The problem with this claim – aside from it not being supported by evidence – is that it was vague enough to imply a broader claim than it actually made. Does “99%” mean 99 percent of the microscopic nasties floating around a home at any given time? Or 99 percent of the entire range of “bacteria, mold and viruses” that exist?

A similar issue existed with claims that HALO was “designed to eliminate Sick Building Syndrome risks by reducing odors, air pollutants, VOCs (chemical odors), smoke, mold, bacteria, and viruses.” In NAD’s estimation, the phrase “designed to eliminate” was a hedge. “[T]he message reasonably conveyed … is that the RGF devices are more than simply ‘designed to eliminate’ the risks associated with Sick Building Syndrome, but that they eliminate or neutralize those risks.” Accordingly, NAD found that the evidence provided by RGF to substantiate its claim “did not support that message.”

Make your claims specific and avoid weasel words. We promise this advice is 100 percent helpful.*

*In most cases.

Pride Month and the Onslaught of Rainbow Corporate Logos

Many of us have become accustomed to the fact that every June, with the calendar signaling LGBTQ+ pride month, we get the inevitable onslaught of corporate logos incorporating the colors of the rainbow flag. And at the end of June, the logos revert to their less colorful versions. The cynics among us like to focus on the July 1 reversion to the old corporate logos, but many of us are mindful of the fact that these yassified logos – even just for a month – are an enormous change from where we were not too long ago, when so few corporations were publicly recognizing this important month.

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By AKDSEO