Key Issues in Advertising on the Internet

1
Key Issues in Advertising on the Internet

• Liisa M. Thomas
• Winston Strawn, LLP
• 35 W. Wacker Drive
• Chicago, IL 60601
• Lmthomas_at_winston.com
• [phone] (Direct)

1688645
2
Key Issues in Internet Advertising

• Viral Marketing
• Internet Gambling
• Search Engine Marketing
• Data Breaches
• Email Advertising in the Era of CAN-SPAM
• Do Not Email Registries

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Data Breaches
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Liability for Breaches of Consumer Data Why You
Should Care

• FTC
• Deceptive Trade Practices Act
• Old deceptive (Eli Lilly, Microsoft, etc.)
• New unfair (DSW, BJ)
• States
• Notification Laws (22)
• Deceptive Trade Practices Acts

5
ChoicePoint How Things Can Go Wrong

• Data breach
• ID thieves posed as legit customers
• 800 victims
• Nigerian national admitted to taking over 2.5
  million
• Aware of breaches
• Specific notice by regulators
• Implicit - behavior of customers
• Internal security processes faulted
• No method for identifying fake businesses

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15 Million Later

• Fined 15 million
• Largest in FTC history
• 5 million fund for consumer redress
• 10 million in civil penalties
• On-site visits of subscribers
• Implement security program
• Biannual third party assessments
• Other outcome
• Eight shareholder class action

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Data Security Lessons for 2006

• FTC Year of Security
• 2/27/06 CardSystems
• Financial data breached (hackers)
• Failed to take appropriate security measures
• Data Accountability and Trust Act (HR 4127)
• Put Your House in Order!
• Compliance program
• Audits, fixes
• Training, vendor issues
• Monitor changing laws

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Email Advertising in the Era of CAN-SPAM
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The CAN-SPAM Basics

• Commercial messages
• Valid physical address
• Ability to opt out
• Accurate/non-misleading header, sender,
  origination and transmission information
• Unsolicited commercial messages
• Same as commercial messages
• Clear conspicuous notice that message is an ad
• Transactional messages
• Accurate/non-misleading header, sender,
  origination and transmission information

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Email a Friend

• Give away a coupon, etc. or otherwise encourage
  person to send to friend
• Web site owner is sender
• Need opt-out, advertisement notice, physical
  address
• From line should identify sender
• No consideration or encouragement given
• Person entering friends information is sender
• Not a commercial message
• From line can be persons, not Web sites

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NYAG and Datran Media

• Email Marketer
• Purchased lists from brokers
• Brokers promised not to share information
• 1.1 Million settlement on March 6, 2006
• Independent determination of broker privacy
  representations
• Appoint chief privacy officer

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Email Registries
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Do Not Email Kid Registries

• Passed in Utah and Michigan
• Cannot email advertisements for material
  inappropriate or illegal
• If children are on registry
• Duty to check registry
• Challenged in UT by adult content publishers
• Violates commerce clause
• Violates first amendment
• Similar bills pending in IL, CT, GA, HI, IA, WI
• FTC not in favor possibility of fraud, security
  issues

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Do Not Email the Dead Registry

• Sponsored by Direct Marketing Association
• Self-regulatory
• Requires members to purge current mailing list
• Went into effect January 13, 2006
• 3000 names on list so far
• Name, address, phone number and email address
• Family members sign up
• 1 fee to prevent fraud

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Thanks!

• Liisa M. Thomas
• Winston Strawn, LLP
• 35 W. Wacker Drive
• Chicago, IL 60601
• Lmthomas_at_winston.com
• [phone] (Direct)

1688645