AD-ttorneys Law Blog

Home | AD-ttorneys Law Blog

<em>Part 1 in a Series on the FTC, Reviews and Endorsements</em>

core/paragraph

As we have written several times, the FTC has a lot on its plate with respect to rulemaking and proposed revisions to existing Guides. But that load just got a tad bit lighter, as the FTC released its revisions to the Endorsement and Testimonial Guides yesterday. And for anyone who’s wondering (or who’s forgotten), it has been a long journey. In February 2020, the Commission sought comments on the Guides. In July 2022, the Commission discussed the comments it had received and proposed revisions to the Guides. We blogged about that&nbsp;<a href="https://www.adttorneyslawblog.com/ftc/testimonial-guides-update-the-things-that-make-us-go-hmm/">here</a>. And now, almost a year later, we have the final Guides, with some changes from the original proposed revisions. This post will discuss some of the key changes to the Guides. The very helpful FAQs were also revised, in many cases to match the Guide revisions themselves. We will tackle those changes in a subsequent post.

Most of the Commission’s changes are more in the nature of tweaks or capture written guidance positions it has already taken in prior enforcement actions. Below are some highlights.

Endorsements – The Commission broadened the list of examples, including social media post tags, though it also clarified that such things “can” be endorsements but are not always.

Endorser – The Commission retained its proposed change to clarify that fake reviewers, including virtual influencers, are endorsers.

Clear and Conspicuous – The Commission retained its proposed definition, which tracks recent Commission orders. Disclosures must be difficult to miss and easily understandable and should be made in the same way (or ways) that the representation is made.

Advertisers – The Guides clarify that advertisers can be liable not only when an endorser’s statement is not true but also when it is deceptive, for example by reflecting atypical results.

Endorsers – The Commission retained this proposed new paragraph but added that reviewers can be liable when they falsely represent that they use a product or service.

Intermediaries – The Commission modified this new paragraph to more clearly identify who it views as intermediaries that can be liable – ad agencies, PR firms, review brokers, reputation management companies and other similar intermediaries.

Use of Images – Reflecting advice many of us have no doubt long given, the new Guides make clear that the use of an image other than that of the actual endorser is deceptive if it misrepresents a material attribute of the endorser – e.g., the endorser’s complexion when the product treats acne.

Product Reformulations – The Commission retained new guidance regarding verifying at reasonable intervals that an expert endorser continues to subscribe to their views and that one factor determining the reasonableness of any interview is material alterations in the product.

Consumer Reviews – The Commission modified its new section addressing advertisers procuring, suppressing, boosting, organizing or editing consumer reviews in a way that distorts or misrepresents consumer views to also include upvoting, publishing or selectively publishing reviews.

Typicality – The Commission has clarified that the typicality disclosure must match the nature of the claim. For example, if a person claims to have lost a certain amount of weight over a six-month period, the typicality disclosure must also reflect how much weight a typical consumer would lose during a six-month period; e.g., a disclosure of 1-2 pounds per week must be true over the entire six-month period.

Bright lines – The revised Guides also make clear that there are sometimes lines that can be drawn, but they are less clear, for now, about where those lines might be. For example, the Commission notes that some connections can be immaterial but declined to provide an example. The Commission noted that some discounts may not be material but declined to say when a discount does become material, though in a revised example, it talks about a “significantly reduced” cost. The Commission also acknowledged that some endorsers may be so well-known for being paid to endorse a particular product or products that the material connection is no longer unexpected, but it declined to provide specific examples.

Passage of Time – The Commission also clarified that a gift becomes less material over time and that at some point a disclosure obligation may disappear, and that an advertiser need not monitor for “decades” the social media posts of someone to whom it provided a one-time gift.

Children – The Commission also retained its new guidance concerning endorsements directed to children but rejected suggestions to make the guidance more specific. Somewhat ominously, however, the Commission noted research that suggests “disclosures will not work for younger children” and that it was exploring “next steps” in that regard.

And late breaking news just as we were going to “press” the Commission has announced a proposed&nbsp;<a href="https://www.ftc.gov/news-events/news/press-releases/2023/06/federal-trade-commission-announces-proposed-rule-banning-fake-reviews-testimonials?utm_source=govdelivery">rule</a>&nbsp;that would make unlawful practices such as using fake reviews, suppressing honest negative reviews and paying for positive reviews. If the proposed rules become final, they would transform some of what is in the new Guides into Rules, giving the Commission the ability to assess civil penalties.&nbsp;

FTC Revises Endorsement and Testimonial Guides