Celebrity Ashton Kutcher recently got into hot water with the FTC while serving as a guest editor of an online-only version of Details magazine. The magazine issue in question profiled several Internet companies in which Mr. Kutcher invests, without disclosing those investments. In an interview with The New York Times, the FTC’s assistant director of advertising practices, Richard Cleland, indicated that Mr. Kutcher’s conduct “could be investigated” by the FTC for potentially running afoul of FTC guidelines on product endorsements.
Although the FTC later appeared to back away from those comments, the episode serves as a useful reminder for employers crafting and implementing social networking policies for their employees. Effective December 1, 2009, the FTC issued revised guidelines on endorsements and testimonials in advertising, codified at 16 C.F.R. § 255. Under the revised guidelines, employers and employees may be subject to liability for an employee’s failure to clearly and conspicuously disclose his or her employment relationship when promoting the employer’s product or service via a social networking platform. As a result, employers must ensure that their social networking policies include a requirement that their employees clearly and openly disclose their relationship with their employer when promoting the employer’s product or services. As these recent events demonstrate, the issue is clearly on the FTC’s radar screen.