Consumer Confidential: Sentiment, streets, Star Trek

Here's your finish-line-Friday roundup of consumer news from around the Web:

-- Consumer sentiment took a little tumble this month as the realization set in among many that jobs may not be a big factor in the economic recovery, at least not right away. Optimism among consumers is now at the weakest level in three months. Seems to me, though, that consumers have been pretty snippy for a long time now, so this isn't going to change the economic landscape much.

-- They take their privacy seriously in Switzerland. The country's privacy watchdog says he'll drag Google to court to make the Web giant change how it's photographing streets as part of grand plans to map the world. Swiss authorities want to ensure that all faces of Swiss folk are obscured, and that nobody gets a glimpse of private areas, such as walled gardens. Google says it'll fight for its right to take pictures of stuff, whether you like it or not.

-- When makers of the new "Star Trek Online" video game started working out the concept of the huge, multi-player setting, they originally didn't want to include allowing players to sit in Capt. Kirk's chair on the bridge of the Enterprise. In fact, they figured they wouldn't include the bridge of any starships. Happily, cooler heads prevailed, and the game makers now say that, yes, you can Kirk out as much as you want. Beam me up.

-- David Lazarus

Consumer Confidential: Amazon, Netflix, hookers

Here's your finally-a-Friday roundup of consumer news from around the Web:

--It's shaping up to be a merry e-Christmas. At least that's the message from our friends at Amazon.com, who reported a hefty 69% increase in quarterly profit and said things should continue looking swell right through the holidays. Significantly, the company's turbo-charged results were fueled primarily by sales of electronic goodies, which indicates that consumers are more comfortable buying big-ticket items -- at least if they're offered at the right price. I've said it before and I'll say it again: Watch out for aggressive sales this holiday season. Retailers know you care mostly about price, and they'll be fighting to get your business.

--Build a better mousetrap and investors will beat a trail to your door. That's the takeaway from Netflix, the online DVD-rental service, which has all but decimated brick-and-mortar rivals. The company's stock hit a 52-week high after Netflix reported a 48% spike in profit, based mostly on more people taking out subscriptions. Up next: A bigger push into online streaming of movies and stuff.

--A federal judge has dismissed a lawsuit against Craigslist alleging that the site contributes to prostitution with its listings for adult services. The judge ruled that sites can't be held accountable for their content. Hookers rejoice.

-- David Lazarus

Consumer Confidential: Pizza, Enron and e-books

Here's your tantalizing Tuesday roundup of consumer news from hither and yon on the Web:

--When the going gets tough, it turns out the tough aren't eating pizza. Domino's Pizza Inc. has reported a steeper-than-expected drop in quarterly earnings -- a result, the company says, of more people preparing their own food during these recessionary times rather than ordering in. On the upside, though, Domino's says it's met with some success offering stuff beyond its usual crust-and-cheese lineup, especially sandwiches for lunch.

--He's baaack. Former Enron CEO Jeffrey Skilling will take his case to the Supreme Court, arguing that he was wrongly convicted of securities fraud, insider trading and lying to auditors, resulting in a 24-year prison term. Skilling says federal law was inappropriately applied in his case and that he was unable to get a fair trial amid "blistering daily attacks" in the media. I'm sure we're all sending good thoughts to the man who helped oversee the wipeout of more than $60 billion in shareholder wealth and $2 billion in Enron employee pension plans.

--Step aside, Kindle. Barnes & Noble is getting set to unveil its own e-book reader. The Wall Street Journal says the bookseller could roll out its device by next month, just in time for holiday sales. The B&N reader reportedly will have a six-inch screen, touch input and a virtual keyboard. Amazon.com has lowered the price for its Kindle to $259, so it's a safe bet that any new entrant to the e-book market will arrive near or below that level. My position remains unchanged: It'll take a pretty dazzling effort by any electronic gadget to woo me away from the myriad pleasures of the printed page.

-- David Lazarus

Consumer Confidential: Cars, Kindles and credit

• The president of Toyota Motor Corp., Akio Toyoda, said it was "extremely regrettable" that an American family died in a crash believed to have been caused by a faulty floor mat. That's commendable, as far as it goes. But such language is standard among Japanese execs and politicians whenever something goes wrong. More important is what Toyota will do about the problem. So far, no word of a recall or any other measure.
• Amazon.com says it will no longer remove any books from people's Kindle e-book readers without their permission. The decision follows an outcry over the online bookseller deleting copies of George Orwell's "1984" from Kindles due to a copyright issue. Amazon's new policy is intended to help settle a lawsuit brought by Kindle users. Orwell would be pleased.
• California Atty. Gen. Jerry Brown has filed suit against two businessmen who run a "credit repair" company. Brown says the two -- Todd Swick and Michael Sardo -- have ignored repeated warnings that they must register their business with the state and post a $100,000 bond. He says the lawsuit is intended to make sure that all credit repair firms follow the law. Here's a tip: The only one who can repair your credit is you. Don't pay fees up front to any company saying it can help.

-- David Lazarus

Activia, DanActive yogurt buyers to receive refunds in false advertising settlement

Saturday Night Live has spoofed Activia yogurt and its advertisements featuring actress Jaime Lee Curtis hawking the yogurt that supposedly... er, um ... loosens things up for those who eat it.

But Dannon Co., which makes Activia, is going to have to loosen its purse strings after settling a false-advertising lawsuit today. The settlement calls for the formation of a $35-million fund to reimburse those who bought Dannon's Activia and DanActive yogurts.

The class-action lawsuit, filed in January 2008, alleged that Dannon lied when marketing its Activia and DanActive yogurts by promising health benefits that the yogurt didn't really deliver.

Dannon denied the lawsuit's claims and admitted to no wrongdoing as a part of the settlement.

In a statement, Dannon said the decision to settle the lawsuit was based on avoiding "the distraction and expense of litigation."

Dannon also agreed to make changes to the labeling and marketing of its Activia and DanActive yogurts by increasing the visibility on the labels of the scientific names of the “probiotic” cultures in the yogurts, the settlement said.

The word “immunity” will be removed from DanActive labels as a part of the settlement, court documents said.

Labels that say the yogurt has “a positive effect on your digestive tract’s immune system” will be replaced with labels that say the yogurt will “interact with your digestive tract’s immune system,” the settlement said.

But Dannon will still be able to say it has scientific proof that its yogurt has the ability to improve "slow intestinal travel," or bowel irregularity, as long as the label, ad or display also states that such improvement occurs only when "eaten daily for two weeks, as part of a balanced diet and healthy lifestyle,” court documents said.

The refund program for customers who bought Activia or DanActive yogurts will pay up to $100 per customer, court documents said.

To get the refund, consumers have to fill out a claim form that will be made available once the settlement is approved by the U.S. District Court for the Northern District of Ohio.

Consumers will have 100 days to apply for their refunds from Dannon, which will post claim forms on its website, the settlement said.

San Diego law firm Coughlin Stoia Geller Rudman & Robbins, the lead council on the lawsuit, is offering to mail claim forms to consumers who fill out a form on their website.

If any of the $35 million is left over after the customer refunds are paid, Dannon must donate the remaining amount in yogurt to food banks, court documents said.

-- Nathan Olivarez-Giles

Photo: Activia yogurt. Credit: Ricardo DeAratanha / Los Angeles Times

Dog bites are one-third of all homeowners insurance liability claims, institute says

So much for man’s best friend – dog bites represented a third of all homeowners insurance liability claims last year, according to the Insurance Information Institute.

Attacks cost insurers $387.2 million in 2008, up 8.7% from $356.2 million in 2007. Since 2003, the average dog-bite claim has jumped nearly 28% from $19,162 to $24,461, due in part to higher medical costs and pricier court decisions.

In the last year, the number of claims rose nearly 9% from 14,531 to 15,823. More than half of bites happen on the dog owner’s property.

More than 4.5 million Americans are bitten by dogs each year, with nearly 900,000 requiring medical care, according to the Centers for Disease Control and Prevention. About half of those are children.

In 2006, more than 31,000 victims required reconstructive surgery.

-- Tiffany Hsu

American Apparel settles lawsuit with Woody Allen for $5 million

With a trial set to begin today, American Apparel opted to pay $5 million to settle a lawsuit brought by Woody Allen. The actor-director sued the Los Angeles clothing retailer last year for $10 million for using his image on the company's billboards without his permission.

But don't expect an apology from American Apparel founder and chief executive Dov Charney, who said in a statement that it was his insurance company, not him, that opted to settle. Charney reportedly told journalists outside the New York courthouse that he was "not sorry of expressing myself."

For his part, Allen blasted American Apparel, calling the company's 1st Amendment defense "sheer nonsense" and accusing it of trying "to smear me," the Associated Press reported.

The billboards, put up in 2007, depicted an image of Allen dressed as a Hasidic Jew from the movie "Annie Hall." The company removed both billboards -- one in Los Angeles, the other in New York City -- less than a week later after receiving a complaint from Allen's representatives.

In a statement released today, Charney said the vast majority of the $5-million settlement would be paid by the retailer's insurance company.

"Few people know as well as Woody Allen how difficult it is to explain a joke without killing its humor," he said. "Ironically, I now find myself in the difficult position of having to make a similar explanation to Mr. Allen, a man who has long been one of my inspirations."

-- Andrea Chang

Congress pays attention to complaints about product safety law

Remember the Consumer Product Safety Improvement Act?

Yeah, that's right, the law that was passed in late 2007 after lawmakers started panicking about all the tainted toys ending up in children's hands. The law that earlier this year almost prevented thrift stores from selling children's clothes, made L.A.'s apparel industry and handmade toy manufacturers wonder whether they could stay in business and forced auto dealers to pull children's motorcycles from showrooms.

Manufacturers want the law reversed, but environmentalists point out that lead and other chemicals are dangerous and shouldn't end up in kids' toys or clothes.

Lawmakers looked at the repercussions of the law today in a hearing of the House Small Business Committee's Subcommittee on Investigations and Oversight.

"Many small businesses, including those that sell products that do not pose a health risk, are facing significant losses as they struggle to meet a host of new, and often confusing, regulations," said Subcommittee Chairman Jason Altmire. 

Industry advocates have been railing against the law since November. They declared a National Bankruptcy Day on Feb. 10, the day that parts of the law went into effect, and erected a tombstone on their website that read "Childrens Products Murdered by Over Zealous Special Interest Groups." They wrote letters to President Obama, members of Congress and Nancy Nord, who chairs the Consumer Product Safety Commission, which enforces the act. They held rallies and even defied the act by selling products that hadn't been tested for lead content.

Is the effort paying off?

So far, it's unclear. While the Consumer Product Safety Commission has extended some compliance deadlines, notably for motorcycles and ATVs, some businesses already have been forced to close their doors. Bills introduced into Congress to amend the law have gone nowhere.

But at least someone is having listening, said Paul Nathanson, a lobbyist at Bracewell & Giuliani who represents some of the manufacturers. Congress previously had denied requests to hold a hearing on the issue.

"The first thing we have to do is for Congress to admit there is a problem," he said. "The fact that there finally was a hearing makes it significant."

— Alana Semuels

Photo: Advocates have written hundreds of letters asking for the Consumer Product Safety Improvement Act to be changed. Credit: jelene via Flickr

K-Swiss sues Puma in defense of eyelet strip shoe design

Puma  and K-Swiss are tied up in a growing dispute over shoelace-holding methods that could land the footwear companies in a Los Angeles courtroom.

K-Swiss, based in Westlake Village, filed a lawsuit against Puma in U.S. District Court in Los Angeles last week, asking a judge to rule that K-Swiss' trademarked system of lacing a shoe was valid.

In a March letter to K-Swiss, Puma threatened a suit of its own if K-Swiss' didn't stop selling and marketing the Dolton shoe (pictured at left), which Puma argued copied its trademark "formstrip" design seen on the side of most of its shoes (one of which is pictured below).

The K-Swiss Dolton features an eyelet strip, which runs in a color block down the side and to the sole.

But, the K-Swiss suit contends, the dispute isn't really about trademark infringement; it developed  because Puma executives are angry that two of the company's employees, a shoe designer and a marketing person, left to work at K-Swiss.

"In response to this loss, Puma AG, in bad faith, concocted its plan to assert trademark infringement claims against K-Swiss," the suit said.

The Dolton was introduced in late 2008, the suit said, and the two former Puma employees were hired by K-Swiss after the Dolton was designed.

K-Swiss said it filed the April 30 lawsuit to clear itself of Puma's trademark infringement allegations, and court documents gave examples of shoes designed with similar eyelet strips from Nike, Vans and Adidas.

"K-Swiss’ use of the Eyelet Strip as an integral part of the lacing system for its footwear is a fair use," the suit said.

Puma didn't immediately return calls seeking comment.

-- Nathan Olivarez-Giles

Top photo: K-Swiss Dolton E. Credit: K-Swiss Inc.

Lower photo: Puma Suede. Credit: Puma AG.