We had previously written about the U.S. Federal Trade Commission’s proposed complaint and consent with mobile messaging service Snapchat, best known for promoting its “ephemeral” photo messaging site. The FTC alleged the Snapchat violated the Federal Trade Commission Act through six false or deceptive acts or practices, including Snapchat’s claim that messages can “disappear forever.” Under the proposed FTC consent, Snapchat does not admit or deny any liability. If approved and to settle the matter, Snapchat would be:

  • Prohibited from misrepresenting its products and services and treatment of personal information, or their privacy and security; and
  • Required to implement a comprehensive privacy program that is subject to a third-party audit every 2 years for the next 20 years.

On June 12, 2014, the Maryland Attorney General issued a press release that it had entered into a settlement agreement with Snapchat. (The settlement agreement is not publicly available.) Similar to the FTC’s claims, the Maryland Attorney General alleged that Snapchat misled consumers by representing that the messages were only temporary, and that Snapchat collected names and phone numbers from user’s electronic contact lists—not always disclosed to consumers and to which consumers did always not consent. Unlike the FTC, the Maryland Attorney General also claimed that Snapchat was aware that some of its users were under age 13 and therefore Snapchat failed to comply with the Children’s Online Privacy Protection Act (COPPA).

Similar to the FTC’s proposed consent, Snapchat did not accept any liability in settling with the Maryland Attorney General. The settlement, like the FTC’s proposed consent, prohibits Snapchat from making false representations relating to its app, and from misrepresenting the temporary nature of the messages. Unlike the FTC’s proposed consent, the Maryland Attorney General settlement requires Snapchat to make affirmative disclosures to user that the recipients of messages have the ability to capture or copy the messages they receive. The Maryland Attorney General’s settlement also requires Snapchat to obtain affirmative consent from consumers before it collects and saves contact information from address books. In addition, Snapchat has agreed, for a period of 10 years, to take specific steps to “ensure children under the age of 13 are not creating Snapchat accounts.”  Finally, Snapchat agreed to pay Maryland $100,000.

The FTC has no general authority to issue fines but can issue them only if a specified law or regulation (like COPPA) authorizes them or if a company violates a consent agreement. As this matter illustrates, state attorneys general typically do not have such limitations on their authority.

Sue Ross (susan.ross@nortonrosefulbright.com / +1 212 318 3280) is a lawyer in Norton Rose Fulbright’s US intellectual property practice.