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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 tseligman@fkks.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
What the Advertising Industry Can Learn from Kim Kardashian’s Settlement with the SEC
On October 3, 2022, the Securities and Exchange Commission (SEC) announced that it entered into a $1.26 million settlement with Kim Kardashian over her social media promotion of the EMAX token without disclosing payment she received from token issuer, EthereumMax. The matter provides important lessons for advertisers. Read more.
October 10 2022
Get Ready for California’s New “Automatic Renewal” Rules
California recently amended its Automatic Purchase Renewals law. The amended statute - effective July 1st -- require marketers to provide consumers of automatic renewal or continuous service offers with more information and easier ways to terminate. Read more.
June 22 2018
“Made in the U.S.A.” Claims Continue to be Scrutinized
In 2016, California amended Section 17533.7 of the California Business and Professions Code ("Section 17533"), liberalizing the standard for selling products labeled "Made in U.S.A" to California consumers. Read more.
June 4 2018
