Increased Scrutiny by FTC on the Blurring Lines of Digital Ads With Digital Content

The fashion industry and many others are blending advertisements with news, entertainment, and other content in digital media, referred to as “native advertising” or “sponsored content.”

 

For e-commerce vendors selling domestically or for export to destinations outside of the U.S., you should take note of this increase in scrutiny as it could ultimately correlate to the way you are thinking about advertising.

This is because if the government is paying attention, as is in this case, it is trying to ascertain where the bright line is (for this type of advertising) as it relates to non-deceptive marketing claims so that it can decide where enforcement measures (think monetary penalties) can be assessed.

According to the Federal Trade Commission (“FTC”) there is an increase in advertisements that more closely resemble the content in which they are embedded, which are graphical images, typically rectangular in shape, placed on publishers’ websites and mobile applications.

For this reason, the FTC is hosting a workshop on December 4, 2013 in Washington DC to explore the blurring lines of digital ads with digital content.  The purpose is to build on previous Commission initiatives to help ensure that consumers can identify advertisements as advertising wherever they appear.

The workshop will bring together publishing and advertising industry representatives, consumer advocates, academics, and government regulators to explore changes in how paid messages are presented to consumers and consumers’ recognition and understanding of these messages.

The general public is invited to make submissions and may do so online here.

Paper submissions may also be submitted and should reference "Native Advertising Workshop" both in the text and on the envelope, and should be mailed or delivered to: 

Federal Trade Commission, Office of the Secretary, Room H-113 (Annex X), 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. 

The FTC requests that any paper submissions be sent by courier or overnight service, if possible, because postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. 

Requests to participate should include a statement detailing any relevant expertise in digital advertising and should be submitted by October 29, 2013 via email to nativeads@ftc.gov.  Panelists selected to participate will be notified by November 6, 2013.

The workshop is free and open to the public.  It will be held at the FTC’s satellite building conference center, located at 601 New Jersey Avenue, N.W., Washington, D.C.  The Commission will publish a more detailed agenda at a later date.

For more information, click here.

 

Questions/comments?  Post below or email me at clark.deanna@gmail.com

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Africa Fashion and International Trade Panel - TODAY 2 - 4 PM

Hope you can join me this afternoon for this free Africa Fashion Week New York/Fashion Institute of Technology (FIT) Event in NYC!


Topic: Africa As An Emerging Market for  Luxury | Sustainable | Eco-Friendly Fashion(s)

• Date: Wednesday, July 11, 2012
• Time: 2 PM to 4 PM

Location: Katie Murphy Amphitheater at FIT
                7th Ave W 27th St
                New York, NY 10001 – 59

Exporting Fashion

The fashion industry is the largest manufacturer of exports out of New York City according to Carmela Mammas, the Director of the New York Export Assistance Center (Center).

Her office, as she explained to my International Business Law students at NYC’s Fashion Institute of Technology, offers export counseling to mainly small and medium-sized businesses, including assistance with:

- finding the right overseas agents and distributors
- bidding on overseas projects, whether for selling a product or providing a service (e.g., architecture design), and
- dealing with unfair trade issues.

The Center further provides a “matchmaking service” in which the office not only identifies potential overseas partners, it also schedules a calendar of appointments with such parties so that all the US exporter has to do is to get on an airplane and follow the business itinerary of meetings arranged by the Center.

Known as the “Gold Key Service,” this can be purchased for a minimal fee ($700/country) by companies that have already developed an export plan, have identified the market potential of the foreign partner country and typically, is a company that is already established in the U.S.

Most of the services and information offered by the Center are free and includes resources such as viewing country profiles through the Center’s market research guide, as well as a series of templates to help a company that is thinking about exporting to identify and assess the potential market, such as through the creation of an export plan, and usage of a recently established official advocacy office in Washington, DC.

The mission of these U.S. export centers, which are not merely in NYC but are all across the country and overseas too, is to create U.S. jobs.

President Obama has launched a national export initiative and recognizes that in order for U.S. businesses to stay in the market and grow a business, a company needs to sell overseas as well.

Hence, his revamping of the export regulations after decades of the status quo.

For more information about Dir. Mammas office, click here.

Questions/comments? Post below or email me at clark.deanna@gmail.com

The Fashion Industry and Accountability for the Basic Human Rights of Foreign Laborers

Fall 2011 New York Fashion Week which has just wrapped up here in NYC, has increasingly brought more issues to the forefront, including the currently trendy dialogue around “sustainable fashion” along with the well known - yet still undealt with - issue of eating disorders that many models struggle with.

One lesser known and far less glamorous issue has to do with foreign labor in the fashion industries. Textiles, and hence apparel, are made primarily overseas using labor that is less expensive than could be found in the United States. That obviously is no secret, however, disproportionately high working hours, wages that barely cover the rent let alone providing an adequate standard of living, hazardous working conditions, child labor and forced labor are all realities that exist in the industry as well.

Designers or license holders who rely on foreign labor to manufacture products with their logos on it (see my previous post for an explanation about licenses, license holders and royalties) have, in my view, a duty of accountability to ensure basic human rights towards laborers all the way down the line back to the factory.

This concept of importer oversight “down the line” is not unusual within the international trade community. An example of this is US Customs C-TPAT (Customs-Trade Partnership Against Terrorism) program, which causes importers to “vet” their supply chain for security purposes all the way back to the factory in exchange for a more expeditious customs clearance. As a result of this program, changes to factories such as adequate ventilation, locks on doors and basic sanitation upgrades have been implemented due to an importer’s demands that such changes be put into place.

While industry standards grossly lack foreign labor accountability, I am pleased to report that some licensor’s do in fact, require not just those licensee’s who import products with their logos to maintain certain labor standards, but they likewise require that those importers have their manufacturers agree to these terms as well.

To give you an idea of some of these contract terms that protect laborer rights and attempt to provide an “ethical code of conduct” if you will, here are some sample clauses below:

* Child Labor: Licensee and its Suppliers will not purchase products or components thereof manufactured by persons younger than fourteen (14) years of age or younger than the age of completing compulsory education in the country of manufacture where such age is higher than fourteen (14). Licensee and its Suppliers further acknowledge and agree that they will not use any child labor in the manufacturing, packaging or distribution of Licensor merchandise. In no case shall any child younger than fourteen (14) years of age or younger than the age of completing compulsory education in the country of manufacture where such age is higher than fourteen (14) be employed in the manufacturing, packaging, sales or distribution of Licensor merchandise.

* Forced Labor: Licensee and its Suppliers will not purchase products or components thereof from suppliers that use forced labor, prison labor, indentured labor or exploited bonded labor, or permit their suppliers to do so. Licensee and its Suppliers acknowledge and agree that they will only employ persons whose presence is voluntary and that they will not utilize any forced or involuntary labor, whether prison, bonded, indentured or otherwise.

* Contract Labor: Licensee and its Suppliers shall not use workers obligated under contracts which exploit them, which deny them the basic legal rights available to people and to workers within the countries in which they work or which are inconsistent with the principles set forth in this Code of Conduct Legal and Ethical Business Practices: Licensee and its Suppliers must fully comply with all applicable local, state, federal, national and international laws, rules and regulations including, but not limited to, those relating to wages, hours, labor, health and safety, and immigration.

* Work Hours: Licensee and its Suppliers shall not require their employees to work more than the limits on regular and overtime hours allowed by the law of the country of manufacture. Except under extraordinary business circumstances, Licensee's and its Suppliers' employees shall be entitled to one (1) day off in every seven (7) - day period. Licensee and its Suppliers must inform their workers at the time of their hiring if mandatory overtime is a condition of their employment. Licensee and its Suppliers shall not compel their workers to work excessive overtime hours.

* Wages and Benefits: Licensee and its Suppliers recognize that wages are essential to meeting employees' basic needs. Licensee and its Suppliers shall pay employees at least the minimum wage required by local law regardless of whether they pay by the piece or by the hour and shall provide legally mandated benefits.

* Overtime Compensation: Licensee and its Suppliers' employees shall be compensated for overtime hours at such premium rate as is legally required in the country of manufacture or, in countries where such laws do not exist, at a rate at least equal to their regular hourly compensation rate.

* Freedom of Association: Licensee and its Suppliers shall recognize and respect the right of employees to freely associate in accordance with the laws of the countries in which they are employed.

* Nondiscrimination: Licensee and its Suppliers shall not subject any person to discrimination in employment, including hiring, salary, benefits, advancement, discipline, termination or retirement, on the basis of gender, race, religion, age, disability, sexual orientation, nationality, political opinion, or social or ethnic origin.

* Harassment or Abuse: Licensee and its Suppliers must treat their employees with respect and dignity. No employee shall be subject to physical, sexual or psychological harassment or abuse.
Licensee and its Suppliers acknowledge and agree not to use corporal punishment or threats of violence.

* Health and Safety: Licensee and its Suppliers shall provide a safe and healthy working environment to prevent accidents and injury to health arising out of, linked with, or occurring in the course of work or as a result of the operation of employer facilities. Licensee and its Suppliers further acknowledge and agree that they will comply with all applicable workplace conditions, safety and environmental laws.

Clauses like these are an illustration of a movement in the right direction, however, much more can be done to prevent incidents of child labor, such as by providing the parents with livable wages.

Questions/comments? Post below or email me at clark.deanna@gmail.com