NAD Releases First Fast-Track SWIFT Decisions

June 25, 2020

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June 24, 2020

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NAD Unveils its First Three Cases Under New SWIFT Fast-Track Process

In April 2020, the National Advertising Division (NAD) rolled out a Fast-Track SWIFT option (“Single Well-defined Issue Fast Track”) for certain cases under review. The new SWIFT track expedites the process for single-issue disputes that do not require complex evidence or argument and meet certain parameters. On June 10, the NAD published its first trio of SWIFT decisions that illustrate what participants can expect from the new process.

A Need for Speed

One of the prized benefits of the NAD’s self-regulatory process has always been its quicker time-to-resolution compared to litigation. With the SWIFT option, NAD has again raised the bar. Participants can expect a decision within 20 business days after NAD transmits the challenge to the advertiser. This ambitious timeframe was developed in response to industry concern that the NAD’s standard process may have been too cumbersome and time consuming for simple but prevalent advertising issues.

SWIFT’s increased efficiency means that both challengers and advertisers may see decreased burden in pursuing or fighting a challenge. Under SWIFT, briefs are limited to five pages, rather than the 20 page limit for standard track cases, with only five exhibits allowed. In addition, SWIFT allows only one substantive submission per party, all submissions are made online, and a meeting with NAD is not guaranteed.

The expedited process results in a less burdensome process for participants – but can also trap the unwary. After a challenge is filed, NAD reviews the papers to determine whether SWIFT is appropriate, a determination NAD makes within two business days. NAD then transmits the challenge to the advertiser, which may object to SWIFT within 4 business days (if the advertiser chooses to do so, NAD will turn around a decision on the objection within 2 business days). The advertiser has ten business days to provide substantiation for the challenged claim regardless of whether the advertiser objected to SWIFT. The accelerated process is sure to keep both NAD and participants on their toes.

Narrowing the Field

Unsurprisingly, SWIFT is not designed for all case types and is geared mostly towards recurring issues in digital marketing. Initially, the NAD considers eligible challenges that are limited to a single issue and fall into one of three buckets:

  1. The prominence or sufficiency of disclosures (NAD points to cases dealing with influencer, incentivized review, and native advertising disclosures);
  2. Misleading pricing and sales claims; and
  3. Misleading express claims that do not require review of complex evidence or substantiation (here NAD points to a review of clinical or technical testing or consumer perception evidence).

When it unveiled SWIFT, NAD provided a host of hypothetical examples running the gambit from an influencer pushing “SuperHottie Tea” without disclosure of a material connection to an advertiser tweeting a BOGO offer that has a hidden fee. But now, there are three real-world examples illustrating SWIFT in action.

The first case involved an advertiser objecting to SWIFT because, in its view, the challenged claim (having to do with 5G service) was an implied claim that did not fit into NAD’s eligibility criteria. NAD disagreed, deciding that the claim was express and that the case fell into the first bucket – whether there were sufficient disclosures. The advertiser did not submit a substantive response to the challenge, and NAD referred the matter to government enforcers. In the second case, the advertiser agreed to voluntarily modify a “clinically proven” claim by disclosing specific portions of the product that were clinically tested in response to the challenge. The third case was closed by consent of the parties and no details were disclosed. These cases – one objection, one voluntary dismissal, and one closure by consent of the parties – illustrate that outcomes of the new SWIFT process will still hinge on the participants’ unique characteristics, strategies, and views on self-regulation.

Especially during the ongoing COVID-19 pandemic, where a civil litigants’ time in court may be more uncertain than ever, NAD’s SWIFT process may step in as a fast alternative to resolving disputes involving common digital marketing issues. SWIFT’s lower barrier to entry and speedy time to decision could create an uptick in challenges for cases meeting the eligibility criteria. Whether your business gets tagged with a SWIFT challenge or is considering bringing one, Hunton’s Advertising Team stands at the ready to help you through the process.

Copyright © 2020, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume X, Number 174

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About this

Phyllis H. Marcus Partner Consumer Products Food Industry Retail Practices
Partner

With 17 years of experience at the FTC, Phyllis brings a unique advertising and children’s privacy vantage point to our clients.

Phyllis heads the firm’s advertising counseling practice, and focuses on all aspects of advertising, from the initial development of a claim to its ultimate defense in the marketplace. Phyllis’s practice includes claim creation and substantiation, pre-acquisition due diligence, dissemination in traditional and digital media, and both offensive and defensive competitor challenges. She also counsels clients on the intricacies of compliance with the Children’...

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Emily K. Bolles Antitrust & Consumer Protection Attorney Hunton Andrews Kurth Washington, DC
Associate

Emily handles all aspects of antitrust and consumer protection practice.  She focuses on antitrust litigation, government investigations, cartel defense, and consumer compliance matters across a variety of industries. Emily takes a pragmatic and solutions-oriented approach to addressing problems and meeting clients’ needs.

Emily represents clients across a wide range of industry sectors, including retail, food, healthcare, electronics, and consumer products. She guides clients through the various stages of litigation and has extensive experience with discovery, motions practice, alternative dispute resolution, and trial preparation. In addition to her civil litigation practice, Emily handles government investigations and criminal antitrust defense matters. Emily’s experience allows her to advise clients on compliance with state and federal consumer protection laws with an eye towards avoiding litigation risk.

Emily is an adjunct professor at Georgetown University Law Center, regularly contributes to the firm’s Retail Industry Blog, and maintains an active pro bono practice.

Relevant Experience

  • Counsel for retail client in complex commercial litigation involving antitrust and RICO claims.
  • Counsel for healthcare client in litigation involving antitrust and tortious interference claims.
  • Counsel for retail client in antitrust litigation involving price-fixing claims.
  • Conducted internal investigation for retail client to facilitate client’s response to government anti-bribery and corruption investigation.
  • Advises retail and consumer products clients on advertising and consumer protection compliance, including product labeling, price advertising, health claims, and dietary supplement claims.
  • Developed and provided onsite antitrust compliance training for pharmaceutical industry client.
  • Defended clients in consumer protection class actions involving false advertising and unfair and deceptive acts and practices claims.
  • Defended clients in privacy class actions involving data breach and data collection claims.
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