Breweries and Mobile Apps

Marketing and advertising are key components of any successful business. Henry Ford said, “A man who stops advertising to save money is like a man who stops a clock to save time.”  Like Henry Ford back in the 1940s, today’s craft brewers are diligently finding ways to build their brands, to get the word out, to broaden their exposure to consumers.  One way the craft beer industry is doing so is through mobile apps (think Untapped, Pint Pass, Brewery Passport, TapHunter).  Mobile apps involve a host of legal issues of which the developer needs to be aware. But when a mobile app intersects with the craft beer industry, there is a complex web of laws governing advertising in the beverage-alcohol industry, and it’s important for the app developer to be aware of these regulations too.

Developing a mobile app raises several legal and regulatory concerns, including those relating to:

• Intellectual property (IP) rights
• Rights of publicity
• End-user privacy
• Advertising
• Industry and self-regulatory guidelines

For instance, maintaining the privacy rights of consumers is of utmost importance when developing an app. Part of the consideration in maintaining the privacy rights of consumers requires that you provide certain notices and disclosures to the end-user.  The three most important things to tell the end-user are: (1) what data you collect, (2) how you use it, and (3) with whom you share it.  Typically, this information is provided in a privacy policy, which should contain a comprehensive overview of your data collection and use practices.

Not surprisingly, the FTC recommends that app developers have a privacy policy that is easily accessible through the app store, and provide just-in-time disclosures and obtain affirmative express consent before collecting and sharing sensitive information

The complexity and breadth of laws and regulations is even greater when a brewery itself wants to develop and distribute an app.  Under the Federal Alcohol Administration Act (“FAA Act”), a brewery is considered an “industry member” and, as such, is subject to a host of advertising laws and regulations, among others.  A brewery wishing to develop a mobile app needs to be keenly aware of such laws and regulations to ensure compliance with same. For instance, does a brewery’s mobile app need to comply with mandatory statements under 27 C.F.R. 7.52?  If yes, how does it do so?

This 2013 TTB Circular on the use of social media in advertising alcoholic beverages provides some helpful insight into complying with the FAA Act:   https://www.ttb.gov/industry_circulars/archives/2013/13-01.html.

Additionally, many mobile apps offer coupons or rebates.  Companies operating in the beverage-alcohol industry that want to develop a mobile app that offers coupons and/or rebates should consider at least two other sets of laws and regulations:  (1) those pertaining to a manufacturer providing a retailer with a “thing-of-value;” and (2) those governing “consumer specialty advertising” or “consumer specialty items.”

If you have questions regarding advertising in the beverage-alcohol industry, I am happy to help answer them.