Internet Lawyers Specializing in Website Agreements, E-Commerce Contracts & Internet Law

FAQs for the FTCs Newly Adopted Revised Endorsement Guides

The FTC’s revised Guides emphasize a focus on social media and in particular the relationship between advertisers and the products being advertised;

“The issue is – and always has been – whether the audience understands the reviewer’s relationship to the company whose products are being reviewed. If the audience gets the relationship, a disclosure isn’t needed.”

The FTC Guides retain a core purpose of protecting consumers from misleading or inaccurate advertisements and while the connection between Subway and Jared may have been readily apparent, “on a personal blog, a social networking page, or in similar media, the reader may not expect the reviewer to have a relationship with the company whose products are mentioned. Disclosure of that relationship helps readers decide how much weight to give the review.”

The FTC recently addressed consumers’ questions regarding its newly adopted Revised Endorsement Guides on its FAQ’s page. This FAQ page can be found here.

Results of the FTCs First Investigation into a Possible Violation of its New 'Guides Concerning the Use of Endorsements in Advertisements' 16 CFR Part 255

Importantly to any internet lawyer; in last October the Federal Trade Commission published a press release announcing that they had revised the old Guide Concerning the Use of Endorsements in Advertisements and Testimonials which was last updated in 1980.

The revised Guides have eliminated the “safe harbor” provision, made explicit that celebrity endorsers will be liable for false or unsubstantiated claims made in connection with an endorsement and the need to disclaim material connections to products that a celebrity is substantively discussing where the connection would otherwise not readily be apparent, and importantly, this material connection provision also extends to apply to bloggers who are now required to disclose any material connections between themselves and advertisers in connection with anything they are endorsing.

The “safe harbor” provision had enabled advertisers to use consumer testimonials which were unusual or exaggerated compared to common consumer experiences of the same products so long as the advertiser included a “results not typical” provision somewhere in the advertisement. 

In the words of the FTC, any connection which “might materially affect the weight or credibility of the endorsement” must be disclosed where the connection is “not reasonably expected by the audience.”

Any material connection between an advertiser and an endorser may come in the form a ‘gift’, or other compensation or incentive for the blogger to write or otherwise advertise word-of-mouth to consumers on behalf of the advertiser. Also, the blogger must disclose any other material connections that she may have with the manufacturer of the product being advertised.

This material connection between advertisers and bloggers was recently tested in an investigation by the FTC for the first time since its release of the revised Guides and this also marks the first enforcement action by the FTC on behalf of its revised guides.