March 5, 2021

Volume XI, Number 64

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Mobile Advertising Company Gets Flack from FTC for Failure to Deliver Upon Advertised Promises

Tapjoy, Inc. (“Tapjoy”), a mobile advertising company, settled FTC allegations that it failed to provide promised in-game rewards to consumers. Tapjoy operates an advertising platform that works within mobile games and offers in-game virtual currency to users who complete the activities of third-party advertisers (i.e. purchase products, sign up for a free trial, take a survey). Despite hundreds of consumer complaints, Tapjoy failed to deliver on its promises to consumers who earned in-game rewards.

The settlement terms prohibit Tapjoy from misleading users about the rewards they can earn and Tapjoy remains responsible for the actions and inactions of its third-party advertiser partners. Namely, the FTC held that if the third party advertisers fail to deliver on their promises, Tapjoy would be responsible for fulfilling promises made to consumers.

Though it seems intuitive, advertisers should be careful to keep their advertised promises, even if delivery on those promises hinges on third party actions. Advertisers should rely on their commercial contracts with third-party advertising partners, for the third party advertising partners’ failure to deliver on their promises. However, the consumer should not be affected by the inactions of the third party advertising partner and should have a seamless consumer experience.

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Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XI, Number 14
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About this Author

Snehal Desai, attorney, Sheppard Mullin
Attorney

Snehal Desai is an associate in the Intellectual Property Practice Group in the firm's San Francisco office. She is a member of the Privacy and Cybersecurity Team, the Advertising Team and the Technology Transactions Team.

Areas of Practice

Advertising: Snehal advises clients in conducting advertising campaigns, contests and sweepstakes, and brand marketing campaigns. 

Technology and Commercial Transactions: Snehal drafts and negotiates...

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