The FTC has enacted new Guides Concerning the Use of Endorsements and Testimonials in Advertising that will affect a wide range of business communications to the public.
In particular, bloggers and businesses that run celebrity endorsement and "typical user" ads will be affected by the new rules. In general, the Guides are more restrictive than the 1980 language they replace.
The Guides take effect December 1, 2009 and will be codified at 16 CFR Part 255. (See also http://www.ftc.gov/opa/2009/10/endortest.shtm.) While the Guides do not carry the force of law, they do form the basis for FTC enforcement interpretations of Section 5 of the FTC Act, 15 U.S.C. § 45. They also typically become the benchmark by which state agencies consider enforcement. The Guides also are likely to serve as the standard by which business competitors will evaluate conduct for challenge in private civil proceedings.
Some key points from the Guides:
Ads will be required to clearly disclose the results that consumers can generally expect using a product or service.
In the past, advertisers could tout unusual results —"I lost 25 pounds in two weeks" —as long as they included a disclaimer such as "results not typical."
That safe harbor is no longer available. Endorsements from "actual consumers" must reflect typical results or risk enforcement.
Someone who is presented in advertising as an "actual consumer" must be just that. No actors pretending to be consumers are allowed, unless that is clearly and conspicuously disclosed.
An endorser who states he or she uses the product must, in fact, be a user at the time the ad appears.
"Material connections" between the advertiser and the endorser must be disclosed if they are not obvious.
In particular, bloggers (or Tweeters, Facebook friends, and other social media users) who are compensated for praising a product must so disclose. No more phony word-of-mouth viral marketing.
Bloggers who are engaged to write glowing reviews of a product and who misrepresent its features implicate not only themselves, but also the sponsor for false advertising. Advertisers are charged with monitoring the results of blog-for-hire postings.
If an advertiser sponsored research the advertiser publicizes, that must be disclosed.
Celebrity endorsers can be held liable for false or unsubstantiated claims they make in advertising.
Celebrities who mention product names during interviews or talk show appearances must disclose if they were paid to do so.
The new Guides may call for a new look at old practices. But in essence, they simply reinforce the principles of the best and most effective advertising: Be accurate, be fair.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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