Advertising & Marketing 2021

Advertising and Marketing: 2021 in Review

2021 was supposed to be the year that – with a great sigh of relief – we put 2020 in the rear-view mirror. Unfortunately, that was far too often not the case. It was perhaps inevitable, though, that life, to at least some degree, slowly began to return to its pre-COVID-19, albeit now largely vaccinated, state. To some degree, the lockdowns and COVID-19 may have altered certain patterns of commerce for good; but commerce in whatever form has been on the uptick, notwithstanding continuing challenges on the supply and labour side. As readers of this guide will see, many advertising and marketing issues from prior years remain front and centre across multiple jurisdictions, but there are a few existing and emerging issues that are worthy of special note.

COVID-19

As we are all too well aware, the COVID-19 pandemic is still with us – and some changes may be here to stay. More convenient product pick-up and delivery options may now be expected by consumers, though many advertisers have had to deal with class actions and regulatory concerns over how they disclose the fees and other costs associated with some of these new conveniences. Face masks may also be more common, even when navigating more mundane viruses such as the common cold. The sidewalk cafes and semi-heated outdoor venues that have popped up across much of the world may never yield back their coveted real estate. And contracts will likely forever now carry a pandemic clause, even if, hopefully, none of us see the likes of the current pandemic again.

On the regulatory side, regulators continue to play whack-a-mole, as new snake-oil COVID-19 cures and preventive products spring up. For more serious-minded advertisers, the duration of the pandemic has provided a window in which to conduct clinical testing to substantiate claims, such as the destruction or inactivation of the COVID-19 virus, which can help give consumers more comfort as the world begins to reopen. Hopefully, 2022 will really be the year we put the pandemic behind us, but then look to see what permanent marks it may have left on the advertising and marketing landscape.

Racial justice

Much of the unrest around racial justice concerns has quieted down, but calls for equality continue to be front and centre. Whether it be racism, misogyny, homophobia, transphobia or any other concern around how protected groups are depicted or portrayed, advertisers remain under the microscope for the content they create. Advertisers have also been threatened with lawsuits over where they spend their advertising dollars and whether sufficient funds have been spent on minority-owned advertising media. The debate in the USA over other contentious issues, such as abortion rights and the speed with which various advertisers raced to defend the right of Texas women to choose, also illustrates how more and more advertisers opt not to sit out political controversies.

Cryptocurrency and NFTs

The cryptocurrency trend shows no sign of slowing, as the number of cryptocurrencies continues to grow and their acceptance becomes more and more mainstream. Non-fungible tokens (NFTs), which are a unique unit of data stored on a digital ledger, are the new kid on the block. While NFT sales in 2020 were estimated to total USD250 million, in the first quarter of 2021 alone they are estimated to have soared to more than USD2 billion. Notwithstanding early jokes about NFTs of a particular bridge in Brooklyn, NFTs have exploded in scope, including art and other collectibles, music, sports, fashion, and, of course, pornography. Numerous legal questions remain around NFTs, some of which are explored in the pages that follow, including copyright and trade mark issues and tax and other financial regulatory concerns.

Privacy and Big Tech

Concerns around protecting consumer privacy remain a high priority in both the EU and the USA. California’s Consumer Privacy Act (CCPA) continues to dominate the headlines in the USA. Enforcement of the CCPA began in July 2020; as of its one-year anniversary in July of this year, California reported sending out numerous notices of alleged violations and a correspondingly high percentage of businesses that came into compliance within the 30-day cure period. In 2021, both Virginia and Colorado passed digital privacy laws similar to the CCPA, with effective dates in 2023. The spectre of conflicting state law digital privacy provisions has increased the pressure for some type of comprehensive federal privacy legislation; but despite the introduction of several pieces of draft legislation, passage of such legislation seems no closer. Even if legislation is eventually passed, there still seems to be no clear consensus on whether such legislation should pre-empt state laws.

Not surprisingly, privacy concerns have focused primarily on “Big Tech.” In the EU, a General Data Protection Regulation complaint against Twitter was finally resolved late last year, with an imposed fine of USD550,000 – well short of the maximum 2% of Twitter’s annual global revenue. Other cases – against Facebook, Apple and Google – remain pending as of this writing. There are also increasing concerns around Big Tech and speech, as Big Tech increasingly polices the content that appears on its sites. To date, much of the focus has been on allegedly false statements about public-interest issues such as vaccines, election results or COVID-19 cures. If Big Tech, however, becomes more active in regulating the content of commercial speech on its platforms, the implications for advertisers could be substantial.

Federal Trade Commission

The biggest developments of the year in advertising and marketing regulation in the USA, however, relate to the Federal Trade Commission (FTC or Commission). As we wrote last year, the FTC is often a bellwether for advertising enforcement trends around the world. The Biden administration is now firmly in control at the FTC, having named a young and aggressive new chair. The new Biden FTC has set ambitious enforcement priorities, has set its sights on Big Tech in a number of areas and has made clear that it intends to vigorously protect the rights of consumers. In contrast to its history of bipartisanship, much of what the FTC is now doing has been on the basis of partisan 3:2 votes.

The FTC, though, has seen its aggressive enforcement wings clipped by a unanimous Supreme Court decision (something rarely seen these days) earlier this year that struck down a commonly used method of seeking consumer redress. Prior to the decision, the Commission would often file suit in federal court seeking both injunctive and monetary relief. The Court found no statutory basis for this approach, so for now, unless Congress acts, the Commission can only seek monetary redress if it first prevails in an administrative proceeding and then files an action for monetary relief in federal court. It remains to be seen how often the Commission will pursue this more cumbersome and far more time-consuming approach.

Undaunted, however, the Commission has vowed to press forward. The Commission retains civil penalty authority for violations of the many FTC rules and for certain violations where notice of a prior Commission action has been provided. The Commission has sought to expand, sometimes creatively, the scope of existing rules while it also explores promulgating new rules, including the newly adopted Made in USA Rules. At least one Commissioner has also called for more expansive use of the notice provision. Such efforts, however, may also end up bogged down in courts. No doubt there will be much to say on all of these trends in the coming years.

We hope that readers will enjoy and be enlightened by these advertising and marketing updates from leading practitioners around the world. The world of advertising remains a fascinating and fast-changing one, with companies able to deftly adapt to the trends and circumstances of the world around them, whatever they may happen to be, while regulators find themselves often struggling to catch up.