The Federal Trade Commission (FTC) has released revisions to the guidance it gives to advertisers regarding endorsements and testimonial ads. The revised Guides Concerning the Use of Endorsements and Testimonials in Advertising (Guides), which become effective December 1, 2009 are available here.
Under the prior FTC guidance, which the agency released in 1980, advertisers were permitted to describe in a testimonial unusual results from a product or service along with a disclaimer stating "results not typical" or "these testimonials are based on the experiences of a few people and you are not likely to have similar results." By contrast, the revised Guides require ads conveying a consumer's experience as typical to clearly disclose the results that consumers generally can expect. The FTC determined that the prior disclaimers regarding the limited applicability of an endorser's experience with a product to be ineffective in eliminating consumer deception. Wiley Rein reported in August 2009 that the advertising industry warned in a congressional hearing that the generally expected performance of a product would require quantification of average results, which would be nearly impossible for many products (such as exercise equipment, weight-loss products and health and beauty aids) due to differences among users' ages, genetics, etc.
The revised Guides also add several examples to illustrate the principle that material connections between advertisers and endorsers (including bloggers), which consumers would not expect, must be disclosed. Moreover, advertisers must disclose connections with research organizations if the ad refers to the findings of a research organization that conducted research sponsored by an advertiser. Such paid endorsements, like any ads, are deceptive if they make false or misleading claims.
Celebrity endorsers also are addressed in the revised Guides. Whereas it was unclear from the prior FTC guidance whether celebrity endorsers may be liable for false advertising, the revised Guides clearly state--consistent with FTC case law--that both advertisers and endorsers may be liable for false or unsubstantiated claims or for failure to disclose material connections between the advertiser and endorsers. The revised Guides clarify that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.
While the Guides themselves are not binding law, they are instructive interpretations intended to help advertisers comply with the FTC Act. In an enforcement action alleging the deceptive use of testimonials or endorsements, the FTC still has the burden of proving that the challenged conduct violates the law.