The Federal Trade Commission's (FTC) 2009 Revised Endorsement Guides make clear that the agency will look closely at reviews and endorsements appearing in new online media, such as blogs and social networking sites, to ensure that material connections between the endorser and the marketer of the product are properly disclosed to consumers. An August 2010 FTC settlement puts businesses with Internet platforms-including broadcasters-on notice that the FTC intends to enforce these requirements.
The FTC complaint involved Reverb Communications, Inc. (Reverb), a public relations agency hired by video game developers, and Reverb's sole owner, Tracie Snitker. According to the complaint, Reverb employees, including Ms. Snitker, posted reviews about clients' video games at the iTunes store between November 2008 and May 2009 using account names suggesting that the reviews were from disinterested consumers. These reviews did not disclose the fact that Reverb was hired by the game manufacturers or that they often received a percentage of game sales. The FTC found that this conflicted with the requirement that an online endorsement of a product or service by an individual materially connected with the marketer of that product or service disclose such connection(s) to the public.
Reverb and Ms. Snitker settled these charges with the FTC. Although they admitted no wrongdoing and were not fined, Reverb and Ms. Snitker were required to take down prior endorsements that portrayed the reviewers as independent users/consumers and that failed to disclose a connection between Reverb/Snitker and the seller. Reverb and Ms. Snitker are also prohibited from future endorsements unless such connections with the seller are properly disclosed.
The principles involved in this case apply in any situation in which a party posts a product or service review on the Internet. Accordingly, broadcasters should ensure that employees, contractors or users who post such content to station websites abide by the FTC's requirements