[WikiEN-l] FTC Guides Governing Endorsements, Testimonials

[Fred Bauder]

This may apply from time to time to certain of our editors.

Fred

http://www.ftc.gov/opa/2009/10/endortest.shtm

 For Release: 10/05/2009
FTC Publishes Final Guides Governing Endorsements, Testimonials
Changes Affect Testimonial Advertisements, Bloggers, Celebrity Endorsements

The Federal Trade Commission today announced that it has approved final
revisions to the guidance it gives to advertisers on how to keep their
endorsement and testimonial ads in line with the FTC Act.

The notice incorporates several changes to the FTC’s Guides Concerning
the Use of Endorsements and Testimonials in Advertising, which address
endorsements by consumers, experts, organizations, and celebrities, as
well as the disclosure of important connections between advertisers and
endorsers. The Guides were last updated in 1980.

Under the revised Guides, advertisements that feature a consumer and
convey his or her experience with a product or service as typical when
that is not the case will be required to clearly disclose the results
that consumers can generally expect. In contrast to the 1980 version of
the Guides – which allowed advertisers to describe unusual results in a
testimonial as long as they included a disclaimer such as “results not
typical” – the revised Guides no longer contain this safe harbor.

The revised Guides also add new examples to illustrate the long standing
principle that “material connections” (sometimes payments or free
products) between advertisers and endorsers – connections that consumers
would not expect – must be disclosed. These examples address what
constitutes an endorsement when the message is conveyed by bloggers or
other “word-of-mouth” marketers. The revised Guides specify that while
decisions will be reached on a case-by-case basis, the post of a blogger
who receives cash or in-kind payment to review a product is considered an
endorsement. Thus, bloggers who make an endorsement must disclose the
material connections they share with the seller of the product or
service. Likewise, if a company refers in an advertisement to the
findings of a research organization that conducted research sponsored by
the company, the advertisement must disclose the connection between the
advertiser and the research organization. And a paid endorsement – like
any other advertisement – is deceptive if it makes false or misleading
claims.

Celebrity endorsers also are addressed in the revised Guides. While the
1980 Guides did not explicitly state that endorsers as well as
advertisers could be liable under the FTC Act for statements they make in
an endorsement, the revised Guides reflect Commission case law and
clearly state that both advertisers and endorsers may be liable for false
or unsubstantiated claims made in an endorsement – or for failure to
disclose material connections between the advertiser and endorsers. The
revised Guides also make it clear 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.

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.

The Commission vote approving issuance of the Federal Register notice
detailing the changes was 4-0. The notice will be published in the
Federal Register shortly, and is available now on the FTC’s Web site as a
link to this press release. Copies also are available from the FTC’s
Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W.,
Washington, DC 20580.

The Federal Trade Commission works for consumers to prevent fraudulent,
deceptive, and unfair business practices and to provide information to
help spot, stop, and avoid them. To file a complaint in English or
Spanish, visit the FTC’s online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer
Sentinel, a secure, online database available to more than 1,700 civil
and criminal law enforcement agencies in the U.S. and abroad. The FTC’s
Web site provides free information on a variety of consumer topics.