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July 15th, 2011
Connecticut AG Launches Investigation into Groupon
In what may be the first regulatory action against the daily deal giant, Groupon, the Connecticut Attorney General has just announced that he has requested information from the company regarding its consumer discount vouchers, or “Groupons”. Specifically, the Attorney General has asked the company to explain the terms under which Groupons are sold to and redeemed by consumers, how much revenue those sales generate in Connecticut and how frequently expiration dates are imposed on the sale of goods and services at a discount.
The AG’s focus appears to be whether the Groupons violate the state’s law banning expiration dates on gift certificates. This issue is also at the heart of the many class action lawsuits pending across the country against Groupon, its competitor Living Social, and the merchants whose goods and services are offered by these companies.
While it is too early to predict the results of this regulatory inquiry, or whether other states will follow suit, industry will be watching closely whether Groupon will be able to satisfy the Attorney General’s concerns by explaining that only the additional (or “promotional”) value of the vouchers expire, and not the amount paid for by the consumer.
If you have any questions about this investigation or any other advertising or marketing law issues, please contact Terri Seligman at email@example.com or (212) 826 5580, or any other member of the Frankfurt Kurnit Advertising Group.
Disclaimer. This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.
Other Advertising Law Alerts
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November 10 2017
FTC Updates Endorsement Guide FAQs and Settles First-Ever Action Against Individual “Influencers”
Recent developments demonstrate the FTC's continued interest in social media endorsements.
September 11 2017
FTC Announces Reforms to Its Investigative Process
Recently, the FTC announced a set of internal reforms intended to improve the process by which the Commission investigates unfair, deceptive and fraudulent business practices. The reforms relate to the Civil Investigative Demands ("CID") that the FTC's Bureau of Consumer Protection issues to request information from investigation targets.
September 7 2017