In This Issue:

TINA Investigation Sours on HelloFresh

America’s #1 food-box provider is deploying dark patterns, says watchdog

See-Through?

When it comes to ingredients and suppliers, HelloFresh is all about disclosure. Check out its “Meet our suppliers” page, where the company claims that “from field to cutting board, our culinary and sourcing teams work tirelessly to ensure the entire recipe development process is as environmentally friendly, sustainable, and delicious as possible.” Beneath this marketing tag is a list of suppliers and their logos, which varies depending on which of the 17 countries you’re ordering their service from. “For us,” the site promises, “where our food comes from is as important as where it’s going.”

This sort of transparency is surely a selling point for the company, which operates in a world clogged with fast food, chain groceries, and conglomerates that might be required to share nutrition information but mostly remain silent on just where their raw materials hail from.

But Truth in Advertising, Inc. (TINA), is taking the company to task for failing on a different kind of disclosure.

Opacity or Mendacity?

According to the watchdog group, HelloFresh is deploying “dark patterns” to ensnare curious consumers into auto renewals.

You remember dark patterns, right? We covered them back in the stone ages (i.e., 2021)—when we defined them as an “ever-growing, ever-evolving collection of manipulative web design practices” that include “a number of design approaches—some are tried-and-true, like unsubscribe options written in tiny fonts at the bottom of a marketing email,” while others are deviously novel, such as “the fake screen smudges that one designer placed on a button graphic [that tricked users] into clicking the button when they tried to brush off the smudge.”

These techniques are often deployed in concert, making it difficult, regulators assert, for consumers to approach a webpage or a mobile app with an appropriate level of alarm and distrust.

These are exactly the types of practices that TINA alleges HelloFresh is engaging in. In a letter to the Federal Trade Commission—TINA loves sending them letters—the watchdog details several examples. Consider the HelloFresh mailer at the center of TINA’s critique. It features two identical pull-away cards—one “for you,” the other “for a friend”—that promise “17 free meals,” a bargain that can be accessed by plugging a code into HelloFresh’s website.

The free meals, according to TINA, are not truly “free.” If a prospective customer happens to pull the cards away from the mailer and examine the reverse side, they’ll see the terms and conditions, where they will discover that “the company is merely providing consumers with a discount on a set number of meals.” It’s basically a discount on a package plan. By the time terms and conditions are met, consumers “must spend more than $500 to get the equivalent of 17 regularly priced ‘free’ meals.”

This is the first aspect of the alleged dark pattern. Next comes a blunter approach: “Consumers who visit HelloFresh’s website and plug in the promo provided in the ‘17 FREE MEALS’ promotion are led to believe that they only have five minutes to take advantage of the offer before it expires,” the watchdog writes. “In reality, the offer does not expire when the countdown clock runs out.”

TINA emphasizes that this timer further limits the likelihood that consumers will see disclosures concerning an auto renewal plan. “Nowhere in the company’s marketing or during the checkout process does HelloFresh disclose that consumers’ purchases automatically enroll them in a monthly plan that continues in perpetuity,” TINA claims. The only places where a customer can learn how to avoid the charges are “at the bottom of webpages, below prompts to continue to the next page (and thus easily missed),” and “in an abbreviated summary of the terms of the autorenewal plan in fine print ... after HelloFresh has collected consumers’ credit card information.”

The Takeaway

TINA alleges that the above constitutes a clear violation of the Restore Online Shoppers’ Confidence Act (ROSCA), a charge laid alongside other allegations of violations of FTC law by the company—including with respect to difficulties faced by consumers trying to extricate themselves from the subscriptions and deceptive social media advertising.

The letter ends with a call for an investigation of the company, and, as we know from experience, TINA can often make enough noise to prompt the FTC to action. The letter makes a direct appeal, stating, “HelloFresh, a multibillion dollar company operating in 17 different countries across four continents, is exploiting [food insecurity] by deceptively promising ‘free’ food” to insecure consumers facing inflated prices—a touch of melodrama that might actually land.

There are several alleged techniques involved here, each of which is easy to avoid, but we’ll focus on the one we’ve covered the least—disclosing that a purchase is subject to autorenewal only after collecting credit card information. If consumers have not been clearly alerted to the recurring nature of the purchase before providing credit card information, then not only might consumer complaints lead to letters like this one from TINA, but the FTC may allege violation of ROSCA.

Get Ready for a Bieber Beauty Battle

Rhode v. Rhode pits unknown entrepreneurs against celebrity royalty

Girl Bosses

Formed by Phoebe Vickers and Purna Khatau, two “randomly assigned” college roommates who went on to become friends and business partners, Rhode is a clothing and lifestyle brand that channels high fashion through a vibrant, homespun aesthetic. “In 2014, Phoebe and Purna couldn’t find anything they loved to wear,” they write on their website. “It seemed like all the options were trend-driven, overly detailed and instantly dated. And so, Rhode was born out of a slow meditation on what it means to get dressed.”

Pretty cool. Check out their site.

This version of Rhode has been built up from scratch over eight years, but it has had some success. Their designs have reached the pages of Vogue and graced the person of Beyoncé herself. Success has been hard-won but sweet.

But then …

Lady Bieb

… another Rhode.

Enter Hailey Bieber, née Baldwin, “model, media personality, and socialite,” daughter of Stephen, wife of he-who-must-not-be-named.

Hailey’s middle name is Rhode. So when she set out to create her own beauty brand, guess which name she christened it with?

Yep.

The new skincare line, Rhode, features a lot of Hailey Bieber shots on its website, to be sure. There’s also a fair share of buzzy contemporary descriptions—“Rhode is a line of curated skincare essentials,” for instance, and “made from purposeful, clean, high-performance ingredients at efficacious levels.”

This didn’t sit well with Mss. Khatau and Vickers.

The Takeaway

They sued in late June, alleging trademark infringement, false designation of origin and unfair competition in violation of the Lanham Act, and related New York state law charges.

“Defendants—the global celebrity Hailey Bieber and her corporations—threaten to wash away what Khatau and Vickers have built in an instant.” They identify the force of Hailey Bieber’s celebrity as the worst threat: “[B]lared out incessantly to her 45 million[-plus Instagram] followers, 9.2 million followers on TikTok, and 1.7 million followers on YouTube, Bieber’s new, trademark-infringing brand will quickly swamp Rhode’s market presence, confuse the marketplace, and ultimately destroy the goodwill and reputation of the RHODE brand.”

What will be key to this dispute is whether consumers confuse the two brands. Brands can share a name but be distinct enough that consumers don’t confuse the two. Here, the original Rhode is a clothing brand while the Hailey Bieber version focuses on skincare. Vickers and Khatau, however, point to a previous attempt by Bieber’s representatives to acquire the mark as acknowledgment of potential confusion. “Given the sacrifices they had made to build the brand,” their complaint reads, “Khatau and Vickers refused.”

“The RHODE brand is their most important asset,” the complaint continues. “But Ms. Bieber, who surely could leverage her fame into success with a differently-branded beauty line, apparently does not care that two other women entrepreneurs have been using the RHODE brand name for years.”

The battle is on. We’ll try to keep you up to date.

Brave Claims a Mixed Result in Rare Privacy Investigation from NAD

When privacy is a selling point, Division gonna have its say

Chocolate in Our Peanut Butter!

We here at [email protected] love writing about privacy issues. We also love writing about ad law. But what if we could write about both of them at the same time?

This is now a party.

Internet services, from browsers to VPNs to ISPs, have been featuring privacy claims in their advertising for quite a while. But a recent dispute before the National Advertising Division (NAD) tackles privacy claims as advertising, a relatively infrequent phenomenon. Which privacy standards will claims be assessed against? How will tech companies be asked to qualify their claims? How will they disclose any restrictions in the ads? How will an industry known for secrecy respond to NAD poking around?

Don’t tell anyone we knew in high school, but this is what’s got us excited this week.

Unclear and Inconspicuous

NAD’s investigation of Brave Inc.’s eponymous web browser, part of the watchdog’s “independent routine monitoring of truth and transparency in U.S. national advertising,” turns tech companies into plain old advertisers.

Brave Inc. is an open-source company with privacy at its core. It offers wallet, VPN, search and browsing applications that promise to fight back against “a sea of ads, hackers, and echo chambers ... [Big Tech companies making] huge profits off our data, and [companies telling] us what’s true and what’s not.” It’s got its work cut out for it, but Godspeed.

NAD focused on the Brave browser in this first salvo. The watchdog quickly endorsed the company’s implied claims that the “Brave web browser does not share personal data with third parties.” Good so far. But two other claims—that “Brave stops online surveillance” and “shields everything ... that can destruct [sic] your privacy”—didn’t pass muster; they “are unqualified and affirmatively promise total protection from surveillance [and] third-party tracking.”

The Takeaway

This is where the dirty, churning “sea” of the internet—Brave’s awkward metaphor, not ours, remember—can capsize general privacy claims. There’s any number of ways for third parties to swoop in on personal data, even if one is using the best, most locked-down tech one can find. Brave did cite reports studying back-end data exchanges and its own use of privacy safeguards to support the claims, but NAD declared “the evidence was not a good fit for the broad unqualified claims” the company was making. One wonders whether such claims are ever possible to support—or ever will be.

Brave accepted NAD’s decision, noting it had already ceased making the claims.

A bit of an underwhelming beginning, but it’s the first such privacy investigation of a tech company by NAD in 20 years; given the importance of privacy to today’s consumer, we’re bound to see more. Perhaps the next investigation will be more exciting, as well—NAD getting into a gunfight with a ginormous social media company would be fascinating.

(We need to get out more.)

In the meantime, Brave has kept us occupied with this issue, for which we thank the company. And it’s important to note that NAD’s investigation was not ultimately a criticism of the service the company offers but a warning of how difficult it will be to support unqualified privacy claims.

Product Components Can Undermine—or Support—‘Natural’ Claims

NAD: Gum manufacturer has to chuck whole-product ‘natural’ claims

A Sticky Situation

Perfetti USA, subsidiary of the Perfetti Van Melle Group, is the third-largest producer of confectionery products in the world.

Perfetti lodged a complaint with the National Advertising Division (NAD) against Mazee LLC, maker of Glee Gum, a product with “only $1 million in revenue,” that, according to its own advertising, is as “close to a tree as a chewing gum can get, vegan ... plastic-free, plant based, and allergy friendly.”

(By the way, if your copywriter describes your product as “allergy friendly,” fire them.)

Just because a company is small, however, doesn’t mean it can make unsupported claims without attracting attention. The advertising of big players is heavily scrutinized, and they understandably want to make sure the competition has to meet the same standards. Perfetti took several of Mazee’s claims to task: that Glee was free of plastics, made with chicle, was described as “natural”, “all-natural,” “100% natural”, and “plant-based” without qualification, and was an “eco-friendly” product.

NAD concluded that Mazee’s “plastic-free” claims were supported by the company’s submitted evidence but that the rest of the claims were not. Notably, in determining “plastic-free” is supported, NAD found that it does not convey a denigrating message that conventional gum brands do contain plastic.

Chicle Pickle

The discussion regarding the remaining claims is largely run-of-the-mill. For instance, NAD determined that Mazee couldn’t meet its burden to substantiate its chicle claims. Of greater interest are the “natural” claims, in all their different flavors, so to speak. And here we must pause for a lecture on gum.

Chewing gums consist of a base—“the indigestible part of gum that provides chewy texture,” according to Mazee’s advertising—and everything else, especially the flavorings that make gum worth chewing in the first place.

Apparently—and again, according to Mazee’s own ads—“synthetic materials often can be found in gum base,” but Mazee bragged that Glee boasted a difference: “It’s called chicle, and it’s the sustainably harvested tree sap that we use to make Glee Gum.” With chicle in the base, Glee might reasonably be called “natural”; but, as we mentioned, NAD found that Mazee’s chicle claims were unfounded.

The Takeaway

Hence, the criticism of the “natural” tags, whether or not they are “all-natural” or “100% natural.” “NAD determined that one message reasonably conveyed by the Advertiser’s unqualified natural and plant-based claims,” the watchdog wrote, “is that both the edible components and gum base of Glee Gum are ‘natural.’ Notably, the Advertiser’s claims do not differentiate between these components, but refer to the whole product as a ‘natural chewing gum.’”

The different functions of the ingredients within the product might have justified qualified “natural” claims, but Mazee failed to make those distinctions, and so NAD requested the company discontinue them altogether.

As a final cautionary note, NAD leaves us with this:

A claim that [a] product is “natural” may be different than referring to a product as “all natural[,]” but consumers could reasonably expect it to be free from artificial ingredients, with the exception of a small percentage of the product that does not relate to the function of the product. This is particularly true when the advertiser touts its product as “natural“ and distinct from or superior to competing products that use artificial ingredients.

Perhaps Mazee could have justified “natural” under this regime, but its advertising mixed all the ingredients together into one sticky mess.