FTC Applies Guidelines on Product Endorsements and Testimonials to Social Media
The Federal Trade Commission (FTC) has updated its guidelines on product endorsements and testimonials to include those who use social media, such as blogs, Facebook® and Twitter®, to promote products in exchange for payment or free products. The guidelines, effective December 1, 2009, could result in penalties of $11,000 if violated and will require disclosures of commercial relationships. Even individuals
submitting reviews to online stores, such as Amazon.com, will be covered by the new guidelines. Under another change to the guidelines, advertisers will no longer be able to use the safe-harbor disclaimer, “Results not typical,” but will instead be required to “clearly disclose the results that consumers can generally expect,” if they make a claim about consumer experience with a product or service as typical when this is not the case.
According to FTC, “The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.” Still, courts generally defer to agency expertise in the interpretation of the laws they are responsible for administering.
Advertisers were expecting the changes, which were published in draft form for public comment at the end of 2008. A spokesperson for the National Advertising Review Council was quoted as saying that the new guidance for social media are “relatively consistent with preexisting principles that have applied to traditional forms of advertising.” A representative of a dietary supplement trade group reportedly expressed
concern about the “typical results” requirements, saying the group’s members will be “wondering what the FTC considers ‘typical results.’ FTC needs to define what those are . . . the results you see in clinical trials are going to be in some degree different from what you see in the consumer, so what exactly is ‘typical’?” See Advertising Age and FTC Press Release, October 5, 2009; FoodNavigator-USA.com, October 6, 2009.
Meanwhile, FTC Director David Vladeck has announced agency plans to focus in coming months on food marketing to adults and children, and “green” advertising claims, among other matters. The agency has reportedly sought approval from the Office of Management and Budget to conduct a major food marketing study that will compare current data to that collected in 2007. FTC is also apparently planning a multimedia ad campaign to educate children about why, where and how commercial messages are constructed and placed. According to Vladeck, “The distinction between ads and other content is often blurred to the point that even older kids may not get when they are being pitched.” See MediaPostNews, MarketingDaily, October 5, 2009.