On March 31, 2015, the Federal Trade Commission approved final consent orders related to its false advertising claims against Sony Computer Entertainment America and its ad agency Deutsch LA for PS Vita Game Console. The consent order related to Deutsch LA is especially instructive for businesses and marketing agencies using social media to promote products. The take-away: Regardless of Twitter character limitations, you must disclose material connections in your endorsements.
The FTC alleged that Deutsch LA misled consumers by urging its employees to create awareness and excitement about Sony's game console on Twitter, without instructing them to disclose their connection to the advertising agency or its then-client Sony. According to the FTC, Deutsch LA employees used their personal Twitter accounts to hype the console through tweets like, "Got the chance to get my hands on a PS Vita and I'm amazed how great the graphics are. It's definitely a #gamechanger!"
FTC's consent order bars Deutsch LA from making similar misrepresentations and requires it to "clearly and prominently" disclose a "material connection," where one exists, between an endorser of a product and Deutsch LA or other entity involved in the manufacture or marketing of the product. "Clearly and prominently" means that "the required disclosures are of a type, size, and location sufficiently noticeable for an ordinary consumer to read and comprehend them, in print that contrasts with the background on which they appear," even when made through interactive media, like Twitter. A "material connection" is a connection that might affect the weight or credibility a consumer would give an endorsement. The FTC construes the term broadly.
The trick, of course, is how to both promote a product on Twitter and make the required disclosure in 140 characters. The FTC's Endorsement Guides suggest disclosures such as "Company X sent me [name of product] to try, and I think it's great," as well as hashtags such as #paid-ad, #paid, or #ad.
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