With the rise of influencer marketing, promotional social media content, and endorsed reviews, the Federal Trade Commission (“FTC”) has increased its enforcement and is now looking to expand its guidance related to online endorsements and testimonials. On February 21, 2020, following an earlier press release, the FTC formally requested public comment regarding whether to revise its Endorsement Guides (formally known as the Guides Concerning the Use of Endorsements and Testimonials in Advertising).
The Endorsement Guides, which were last updated in 2009, provide practical guidance for businesses as they determine when and how to make disclosures in order to comply with Section 5 of the FTC Act in their endorsements and testimonials. Since then, the FTC has published supporting documents to address changing trends in advertising and social media marketing. The Endorsement Guides, FAQs, and other materials dictate that when there is a material connection between an endorser and a business that could affect the weight or credibility of the endorsement, the connection must be clearly and conspicuously disclosed.
Guidance like the FTC’s FAQs on the subject, provide concrete examples illustrating whether and how to make disclosures in the employment context and in blogs, online videos, and other types of “ads”.
In 2017, the FTC sent warning letters to influencers and brands to alert them of the Endorsement Guides, highlighting particular disclosures that the FTC alleged were not sufficiently clear. Later that year, the FTC brought enforcement actions against businesses who paid influencers for endorsements and the influencers themselves. Enforcement has continued in full force in recent years, and influencers and social media endorsements recently appeared on the FTC’s list of notable issues for 2019 and 2020.
As part of its review process, the FTC is seeking public comment on a series of questions pertaining to the Endorsement Guides, including:
- how effective, necessary, and practical the Guides are and whether they should be updated to reflect changes in technology;
- whether the Guides should address the use of affiliate links by endorsers;
- whether the 2017 FAQs should be formally incorporated into the Guides;
- whether children are able to understand disclosures and how the disclosures might affect them; and
- whether composite ratings on review platforms that include incentivized reviews are misleading and what disclosures should be made to account for the ways in which reviews are collected and processed by advertisers and review site operators.
Companies that previously established influencer and endorsement compliance programs should pay attention to the FTC comment process and consider updates to their programs and external agreements to reflect any changes the FTC adopts. And for those businesses that engage in celebrity and influencer campaigns, utilize incentivized reviews, conduct social media contests, or operate review platforms but have not yet instituted robust endorsement and review compliance procedures, the FTC’s renewed focus on the Endorsement Guides should provide motivation to establish compliant policies and procedures.
Those who wish to file a comment must do so by April 21, 2020.
We would be happy to work with any of our clients, individually or with others, in drafting comments for submission to the FTC. If interested, please contact Zach@zwillgen.com, who will help coordinate the effort.
Guides Concerning the Use of Endorsements and Testimonials in Advertising
February 21, 2020 | Download PDF
Press Release: FTC Seeks Public Comment on its Endorsement Guides
February 12, 2020
FTC Blog Post: Endorsement Guides: The FTC wants your feedback
February 12, 2020
*** This is a Security Bloggers Network syndicated blog from Law Across the Wire and Into the Cloud authored by Zach Lerner. Read the original post at: https://blog.zwillgen.com/2020/02/24/ftc-seeks-public-comment-influencers-endorsements-testimonials-reviews/