The latest issue of our Socially Aware newsletter is now available here.

In this issue of Socially Aware, our Burton Award-winning guide to the law and business of social media, we analyze a groundbreaking FTC complaint alleging deceptive practices online that could turn website Terms of Use into federal law; we summarize

The Federal Trade Commission’s (FTC) announcement that it had filed a complaint against Jerk, LLC and its websites like “jerk.com” (“Jerk”) looks at first glance like a run-of-the-mill FTC Section 5 enforcement action involving allegedly deceptive practices online. But hidden in the facts of Jerk’s alleged misbehavior is a potentially significant expansion of the FTC’s use of its deception authority.

According to the FTC’s complaint, Jerk allegedly led consumers to believe that the profiles on its websites were created by other users of the website. The company also allegedly sold “memberships” for $30 a month that supposedly included features that would enable consumers to alter or delete their profiles, or to dispute false information in the profiles. Jerk also charged consumers a $25 fee to email Jerk’s customer service department, according to the FTC’s complaint.

The FTC alleges that Jerk created between 73.4 million and 81.6 million unique consumer profiles primarily using information such as names and photos pulled from Facebook through application programming interfaces, or APIs. The complaint states that “[d]evelopers that use the Facebook platform must agree to Facebook’s policies,” such as obtaining users’ explicit consent to share certain Facebook data and deleting information obtained from Facebook upon a consumer’s request.
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Cisco estimates that 25 billion devices will be connected in the Internet of Things (IoT) by 2015, and 50 billion by 2020. Analyst firm IDC makes an even bolder prediction: 212 billion connected devices by 2020. This massive increase in connectedness will drive a wave of innovation and could generate up to $19 trillion in savings over the next decade, according to Cisco’s estimates.

In the first part of this two-part post, we examined the development of, and practical challenges facing businesses implementing, IoT solutions. In this second part, we will look at the likely legal and regulatory issues associated with the IoT, especially from an EU and U.S. perspective.

The Issues

In the new world of the IoT, the problem is, in many cases, the old problem squared. Contractually, the explosion of devices and platforms will create the need for a web of inter-dependent providers and alliances, with consequent issues such as liability, intellectual property ownership and compliance with consumer protection regulations.
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Another great post from our sister blog, MoFo Tech:

The potential for mobile payments is huge. So are the potential legal and regulatory hurdles.

Banks, retailers, and pundits are paying a lot of attention to mobile payments, which typically involve the use of smartphones and tablets to pay for purchases.  But a lack of mobile infrastructure has kept the use of mobile payments fairly low in the U.S.

The space is evolving quickly, however.  More infrastructure is being rolled out, while new software and cloud-based solutions are enabling payment processing without the need for a network of specialized in-store terminals.  For their part, consumers are already well equipped to take advantage of these developments.  Today, 61 percent of American consumers have smartphones or tablets, up from 48 percent last year, according to a recent study from Vantiv, a provider of payment processing strategies, and the Mercator Advisory Group, an independent research firm.

Many of these consumers are already using these devices as shopping tools—comparing in-store prices with online prices, researching products, downloading coupons, and discussing potential purchases with friends.  So it’s fair to assume that consumers will adopt mobile payments quickly as they become easier and more widespread.  By 2018, Mercator estimates, the value of mobile payments will increase sevenfold, to $362.8 million a year, up from $51.4 million today.

There’s a great deal of opportunity here.  But there’s also much to consider from a legal standpoint, because mobile payments represent the convergence of business, technology, and banking.  “You have to think about issues like the structure of the mobile payment offering, including the source and settlement of the funds to determine the applicable regulatory framework,” says Obrea Poindexter, a partner at Morrison & Foerster who leads the mobile payments group.  “There are technology issues relating to cybersecurity and authentication as well as regulatory issues, such as maintaining the privacy of consumer data and complying with anti-money laundering laws.”


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Our global privacy + data security group’s Data Protection Masterclass Webinar series is turning the spotlight on social media marketing and policies in January.

Please join Socially Aware contributors Christine Lyon and Karin Retzer, along with Ann Bevitt in our London office for a webinar that will examine the laws and regulations in the

From our sister blog, MoFo Tech:

Widely applicable rules regarding consumer privacy disclosures in our increasingly mobile world are only now emerging. Government agencies, individual states, and professional associations are all weighing in on how mobile app developers should disclose how they collect, store, use, and protect the wide range of highly personal data

Peer-to-peer (“P2P”) business models based on the Internet and technology platforms have become increasingly innovative.  As such models have proliferated, they frequently result in clashes with regulators or established market competitors using existing laws as a defensive tactic.  The legal battles that result illustrate the need for proactive planning and consideration of the likely legal

On April 12, 2013, the UK’s Office of Fair Trading (OFT), the UK regulator for consumer affairs and competition, announced that it was launching an investigation into children’s web- and app-based games. In particular, the OFT is looking into whether such games comply with the Consumer Protection from Unfair Trading Regulations 2008 (“Regulations”), and are

Massachusetts appears to have followed California’s lead in opening a litigation floodgate over ZIP code collection at the point of sale. In 2011, the California Supreme Court held in Pineda v. Williams-Sonoma Stores, Inc., 246 P.3d 612 (Cal. 2011), that a retailer illegally collects personal identification information (PII) when it requests and records ZIP