1H 2017 Quick Links, Part 5 (Advertising, Contracts)

Advertising

* David A. Hyman et al, Going Native: Can Consumers Recognize Native Advertising? Does It Matter?, 19 Yale J.L. & Tech. 77 (2017): “We tested sixteen examples of native advertising. For fifteen of the sixteen examples, fewer than 50% of respondents knew that native ads were paid content. Averaged across all sixteen examples, only 38% of respondents knew that native ads were paid content.”

* NY Times: While retailers and brands may feel like they have no choice but to spend on search advertising, many do so willingly because it works. Kristi Argyilan, a senior vice president of marketing at Target, said search advertising was accounting for a larger portion of her digital spending because the ads were “becoming so useful” and more relevant.

* Reuters: Burger King debuts Whopper ad that triggers Google Home devices

* Adweek: 1 in 3 Internet Users Has Made a Purchase Based on Sponsored Content. Reminder: Most people don’t care if content is sponsored as long as it’s useful and high quality

* Marketing Land: Study: Gen Z more discriminating, more advertising-resistant than Gen X or Y

* Adweek: “In an era of increased media fragmentation, brands are finding that the best way to market their products is to create entertainment that consumers actively seek out,” said Maude Standish, vp of programming strategy of Fullscreen. “This is particularly true when marketing to Gen Z, who grew up with the internet and are not only demanding that all brands entertain them, but also that entertainment shifts to behave like a friend. It’s also why influencers are so effective in selling to this generation.”

* FTC: Economic Analysis of Hotel Resort Fees. The fact that the FTC is doing nothing about resort fees is ridiculous.

* Washington Post: ‘It wasn’t even a question’: The simple calculation for pulling advertising off Breitbart

* Daily Mail Online: Are these the biggest food lies ever? Hilarious photos reveal the misleading packaging that’s led to some VERY disappointed (and hungry) customers

* NY Times: A Bank Had Ads on 400,000 Sites. Then Just 5,000. Same Results.

* WSJ: Online Publishers Try Reducing Ads to Boost Revenue

* FTC Staff Reminds Influencers and Brands to Clearly Disclose Relationship. The Recorder: Who Got Those Social ‘Influencer’ Letters From the FTC? Read the Full List. Prior blog post.

* Venable: Operation Full Disclosure Part 2: FTC Compliance Sweep—Influencing the Use of Influencers. Law.com: How companies responded.

* Wired: What Really Happens Inside a PR Crisis War Room

* Jalopnik: Here’s How Much Businesses Pay To Get On Those Big Blue Exit Signs

Contracts

* Artifex Software v. Hancom, 3:16-cv-06982-JSC (N.D. Cal. April 25, 2017): “Defendant contends that Plaintiff’s reliance on the unsigned GNU GPL fails to plausibly demonstrate mutual assent, that is, the existence of a contract. Not so. The GNU GPL, which is attached to the complaint, provides that the Ghostscript user agrees to its terms if the user does not obtain a commercial license. Plaintiff alleges that Defendant used Ghostscript, did not obtain a commercial license, and represented publicly that its use of Ghostscript was licensed under the GNL GPU. These allegations sufficiently plead the existence of a contract.”

* Oren Bar-Gill et al, “Drawing False Inferences from Mandated Disclosures.”  Abstract:

Disclosure mandates are pervasive. Though designed to inform consumers, such mandates may lead consumers to draw false inferences – for example, that a product is harmful when it is not. When deciding to require disclosure of an ingredient in or characteristic of a product, regulators may be motivated by evidence that the ingredient or characteristic is harmful to consumers. But they may also be motivated by a belief that consumers have a right to know what they are buying or by interest-group pressure. Consumers who misperceive the regulator’s true motive, or mix of motives, will draw false inferences from the mandated disclosure. If consumers think that the disclosure is motivated by evidence of harm, when in fact it is motivated by a belief in a right-to-know or by interest-group pressure, then they will be inefficiently deterred from purchasing the product. We analyze this general concern about disclosure mandates. We also offer survey evidence demonstrating that the risk of false inferences is serious and real. Our framework has implications for the ongoing debate over the labeling of food with genetically modified organisms (GMOs); it suggests that the relevant labels might prove misleading to some or many consumers, producing a potentially serious welfare loss. Under prevailing executive orders, regulators must consider that loss and if feasible, quantify it.

* Jane Bambauer et al, A Bad Education, Univ. of Ill. L. Rev.:

Mandated-disclosure laws achieve their regulatory goals by educating the public about latent attributes of a product or service. At their best, they improve the accuracy of consumers’ cost-benefit analyses compared to a world without disclosure and inspire firms to reduce unnecessary risks. When mandated disclosures, however, do not improve cost-benefit assessments–when they are useless or, worse still, when they reduce the quality of those assessments– then they constitute a bad education.

American privacy law, which is principally a mandated-disclosure regime, imposes a bad education on consumers. This Article proposes a theory for differentiating valuable disclosures from wasteful and harmful ones. Valuable disclosures provide notice about material attributes without inducing an overreaction. After validating the theory in an experimental setting using disclosures about health risks, moral risks, and pseudoscience, we apply the model to four distinct forms of privacy-invasive practices. We find that the disclosures required by regulators are usually wasteful and may cause consumers to overreact. This is the first study to compare disclosures about privacy practices to disclosures about other types of attributes. It raises, for the first time, a troubling insight: if consumer law were guided by the same justifications as our privacy law, it would have to mandate disclosures about GMOs, animal testing, and an unlimited range of other attributes that produce visceral responses.

* Mike Hintze, In Defense of the Long Privacy Statement, Md. L. Rev.

* CouponCabin LLC v. Savings.com, Inc., 2017 WL 83337 (N.D. Ind. Jan. 10, 2017): In a scraping case, denying a defendant’s judgment on the pleadings even though it remains unclear how the defendant got any notice from the plaintiff. Prior blog post.

* Bob Sullivan: CFPB finally issues ban on class-action waivers; but with bureau’s future uncertain, will it stick?