A brand has said it will not accept ad agencies’ work, in the wake of the controversial settlement with a US court.
Adidas has been hit with a lawsuit alleging that it has used deceptive advertising tactics, including in ads for clothing, to convince consumers to purchase the sneakers worn by US models.
The lawsuit, filed on Friday by the American Civil Liberties Union (ACLU), seeks $2.6bn in damages.
The complaint said the ad agency was in direct competition with Adidas and “would have been unable to compete with Adidas had it not been for its agreement with Adidas”.
It said Adidas had engaged in a series of deceptive advertising practices over several years.
It said the settlement between Adidas and the ACLU was “a slap in the face to consumers” who were harmed by the ad agencies tactics.
“The settlement with Adidas is the latest in a string of egregious examples of deceptive tactics, tactics that have caused millions of Americans to suffer financial harm, and hurt millions more,” said Adrienne Witherspoon, the lead attorney on the lawsuit.
“We are grateful that the court has agreed to resolve this case and allow the millions of consumers who were affected by these deceptive practices to move forward with the rest of their lives.”
The ad agency is owned by adidas US.
The US case relates to an ad that ran in the summer of 2018.
The suit says the ad showed the shoes worn by models including Rihanna and Adore Delano in their Adidas ad campaign for the US launch of their women’s clothing line, which was to feature Rihanna.
The ad featured Rihanna wearing a pair of the shoes on a street in New York.
The two models were photographed together in the same spot at the time, the suit says.
The ACLU alleges that the ad violated the federal Fair Labor Standards Act (FLSA) because it was used in direct opposition to the company’s “adoptive parental leave” policy.
The agreement was reached in February 2018, according to the suit.
Advertisers who have worked with Adidas can expect to lose their advertising rights if the company continues to use deceptive advertising methods, according a spokesman for the ad company.
Adele said she had accepted Adidas’s offer to pay the civil penalty.
“I’m pleased that the courts have agreed to the settlement.
I am grateful to Adidas for their commitment to fair labor standards,” she said in a statement.
“As always, we will work closely with the law enforcement authorities and seek to work collaboratively with them to achieve justice for the American people.”
The Adidas statement added that the company “looks forward to continuing to grow our partnership with the ACLU”.
The US settlement comes after the agency paid $1bn (£739m) to settle a class action lawsuit over alleged mismanagement by the firm’s US ad agency.
In December, a judge in California found that Adidas had violated the Fair Labor Standard Act by allowing a former ad agency to “take unfair advantage of its ad industry customers by exploiting the law” to pay its own fees and benefits to employees.
The judge said Adidas’s decision to “reimburse its own employees in excess of the minimum wage” violated the FLSA.
Advertising is allowed to be used as part of its advertising and promotion of products, but it must not be deceptive, the ruling said.