In February 2020, the Federal Trade Commission (FTC) announced that it was going to reexamine the Endorsements and Testimonial Guides (Guides) and sought comment on whether and how the Guides should be changed, including addressing issues involving reviews, affiliate links, children’s perceptions and changes in technology. Two very long years later, the FTC has proposed some real changes to the Guides, which will be subject to another round of comment. Also on the agenda was a policy statement proclaiming that ed tech is a priority area for agency Children’s Online Privacy Protection Act (COPPA) enforcement. This basically was the equivalent of scheduling a meeting to discuss future meetings – and of course, the first meeting with a full commission for Commissioner Alvaro Bedoya.
Testimonial Guides: We are going to start with the end because that was the main event – the 5-0 vote to publish the long-awaited updates to Endorsement Guides for comment. This was 26 months in the making and saw 110 comments filed, and the FTC didn’t disappoint. Well, maybe the 26-month wait was a wee bit disappointing, but two years is the usual wait for a sequel. We are going to give you a broad overview here, but you can look forward to us doing a deeper dive on the proposed changes in the near future. But for now, here is what you need to know. The Guides got a modern refresh with changes to the definition of endorsements to include virtual influencers (yes, that means you, Lil Miquela) and fake reviews. The proposed Guides incorporate some of the updates we already follow that have appeared in the FAQs, including that tagging can be a form of endorsement. There is more real estate given to consumer reviews, including fake reviews and suppression of reviews. Social media companies are warned to look closely at their platform disclosures and whether they are sufficient. There is also a new provision that is essentially a place marker, saying that influencers targeting children deserve special consideration. The FTC will hold a workshop on this on Oct. 19.
Consumer Comments: The meetings always kick off with the consumer participation portion, and the high point today was the appearance of former FTC official Eileen Harrington, who spent 27 years at the agency, including in stints as the agency’s executive director and numerous positions in the Bureau of Consumer Protection, including acting director and deputy director. Never one to mince words, Harrington expressed her dismay at the recent employee survey results, which showed a noticeable decline in FTC staff perceptions of new leadership; she suggested that Chair Lina Khan take these results seriously, “act with humility,” and figure out and fix what’s going on at the agency. She made clear this was not just an HR issue but a “crisis,” and one that will lead to a “failed agency” if not addressed. As for the other consumers, we heard from representatives of the hotel franchisee industry (now regular fixtures each month).
Ed Tech and COPPA: Most of the other commenters were various participants from the ed tech industry who wanted to encourage the FTC to take a thoughtful look at the nuanced issue of technology and children, particularly noting that individual parental notice and consent may not work in the classroom. The FTC discussed and voted on a Policy Statement on COPPA and Education Technology, which passed 5-0. Commissioners Noah Phillips and Christine Wilson criticized the delay in issuing revisions to the COPPA rule and said that should be the priority. Others noted that the policy, while not breaking any new ground, does focus on parts of COPPA that are often forgotten after parental consent is obtained: only collecting what data is necessary for the functioning of the technology and not keeping any data longer than necessary. It will be interesting to see how this shapes up, as we all know very well the value of learning technology. Commissioner Rebecca Slaughter shared that her kindergartner learned to read via virtual learning. But children’s privacy also needs to be protected, with Bedoya noting this will be one of his key areas of focus.