USA Law and Practice Contributed by: Katelyn Patton, Frankfurt Kurnit Klein & Selz
10.2 Product Placement Although the FTC has expressed the general view that consumers have the right to know when they are being advertised to, the FTC has also indicated that product placement (at least in adult-directed advertis - ing) often does not require disclosure. The FTC has explained that “merely showing products or brands in third-party entertainment content, as distinguished from sponsored content or disguised commercials”, does not require a disclosure that the advertiser paid for the placement. Disclosures may be needed to prevent consumer confusion when objective product claims or endorsements are being made. The FCC’s sponsorship identification rules, however, require disclosure of product placement in broadcast - ing and certain other media that is subject to FCC jurisdiction. 10.3 Other Products Advertising is highly regulated in the USA and this chapter only touches on some of the key areas that are regulated. Marketers are advised to consult with local counsel before engaging in any advertising in the USA.
brands face when experimenting with NFTs. There, investors alleged that Dolce & Gabbana’s DGFamily NFTs failed to provide the high-value perks marketed, ranging from digital outfits and metaverse experiences to exclusive physical goods and events – thus expos - ing the brand to claims of misrepresentation. Even though the US arm of the company was dismissed from the suit for lack of direct involvement, the litiga - tion highlights how fragmented corporate structures and unclear accountability can still draw brands into costly disputes. For luxury and consumer-facing com - panies, NFT ventures must be carefully structured (with clear disclosures, achievable benefits and con - tingency planning) to avoid unmet consumer expecta - tions, long-lasting reputational harm, and allegations of fraud. 9.2 Metaverse General advertising principles should apply to adver - tising within the metaverse. Some current key issues requiring attention include: • the blurring of advertising and other content; • the use of virtual influencers; • how to properly disclose material connections and other qualifying information; • privacy and data collection; and • the impact of the metaverse on children.
10. Product Compliance 10.1 Regulated Products
Although the FTC is primarily responsible for the enforcement of consumer protection laws in the USA, there are a number of other federal agencies that enforce consumer protection laws directed at specific industries, including food and drugs, alcohol and tobacco, banking and securities, and transporta - tion. State laws may impact the marketing of regulated products (eg, cannabis) as well.
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