The Federal Trade Commission recently revised its FAQs about its Guides Concerning the Use of Endorsements and Testimonials in Advertising. The FAQs were first published in 2010 and the updates are intended to address recent questions posed to the FTC, including those stemming from FTC actions in connection with endorsements and testimonials.
The revised FAQs reemphasize the fundamental principles of the Guides, including that endorsements must be honest and not misleading, must reflect the endorser’s opinion, cannot be used to make a claim that the advertiser itself could not make, and that if there is a material connection between the advertiser and the endorser that consumers would not expect, that connection should be disclosed. In addition, several important clarifications have been made:
- The FTC is not generally monitoring bloggers, however, if enforcement becomes necessary the FTC will focus on the advertisers and their agencies/PR firms. In some instances the FTC may take action against the endorser as well.
- The FAQs clarify that small incentives, such as an entry into a sweepstakes or contest is a material connection that should be disclosed. Even if an incentive has no financial value, such as the opportunity to appear in an advertisement, it should be disclosed. This falls in line with the FTC’s statements in its Closing Letter to Cole Haan regarding material connection disclosures in social media sweepstakes requiring the disclosure #sweepstakes to sufficiently disclose material connections.
- Material connections disclosure should be made in each individual post containing an endorsement. The FAQs clarify that a disclosure on a profile page or in a description section is not sufficient because it may not be seen by readers.
- Content does not have to be expressly positive to qualify as an “endorsement.” Merely posting about a product could convey an individual’s opinions or beliefs about the product. For example, pinning an image of a product on Pinterest could imply the poster likes or uses the product and may require disclosure of any material connection.
- The FTC acknowledges that in some places there is no procedure for disclosure, such as when “liking” a Facebook page or post, and states that failure to disclose an incentive offered in connection with such action may not be a problem under the Guides. However, advertisers that buy fake “likes” from nonexistent people or those with no experience with their products could face enforcement action.
- The FAQs emphasize that the FTC does not consider abbreviated disclosure to always be sufficient and recommends “sweepstakes” and “contest” instead of “sweeps” and “Ad,” “sponsored” and “promotion” versus “spon”.
- The FAQs reiterate that employees should be disclosing their connection and paid celebrities should be disclosing their connection in any post about a company’s products/services. Further, the FAQs reiterate that advertisers and their agencies are ultimately responsible for the endorsers they engage.
TIP: The revised FAQs clarify the FTC’s application of its Endorsement Guides and could be an indication of more aggressive enforcement in the near future. Advertisers and their agencies should ensure that they have proper policies in place to achieve compliance with the Endorsement Guides, and a program to monitor and enforce those policies.