FTC Calls for Review of Endorsement Guides

The Federal Trade Commission has recently announced that it is seeking public comment on whether to make changes to its Endorsement Guides as part of the FTC’s retrospective review of its rules and guides designed to ensure that they are up-to-date, effective and not overly burdensome.

The Endorsement Guides provide guidance to marketers designed to ensure that advertising using endorsements or testimonials adhere to the FTC Act. Simply stated the Endorsement Guides state that when there is a connection between an endorser and a seller of an advertised product that could affect the weight or credibility of the endorsement, the connection must be “clearly and conspicuously” disclosed.

According to a proposed Federal Register notice, FTC attorneys are seeking comment on a number of issues. Some of the key topics include:

• Whether advertisers and endorsers are properly disclosing, if at all, unexpected material connections in social media
• Whether the practices addressed by the Guides are prevalent in the marketplace
• Whether the Guides are effective at addressing those practices, including, whether children are capable of understanding material connection disclosures
• Whether consumers have benefitted from the Guides
• What impact, if any, the Guides have had on protecting consumers
• Whether changes in technology necessitate changes to the Guides
• Whether the FTC’s recent guidance document “The FTC’s Enforcement Guides: What People Are Asking” should be incorporated into the Guides
• The extent to which incentives like free or discounted products bias consumer reviews
• Whether ratings that include reviews based on incentives are inherently misleading
• How the Guides should address the use of affiliate links by endorsers
• What, if any, disclosures advertisers or operators of review sites need to make about the collection and processing of publication of reviews to prevent them from being deceptive or unfair

The FTC is laser focused on legal regulatory issues surrounding paid-for rankings, ratings and review websites. In fact, FTC Commissioner Chopra has recently stated that he hopes that the FTC will actually codify portions of the Endorsement Guides into formal rules and require technology platforms that utilize and permit influencer marketing to bolster contractual requirements with influencers,

Richard B. Newman is an FTC compliance and defense attorney at Hinch Newman LLP. Follow him on National Law Review @FTC attorney. 

Informational purposes only. Not legal advice. May be considered attorney advertising.