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January 19, 2012

Keeping and Eye on the Folks Marketing Your Brand—Google Gets Tripped Up in Blogger Controversy

Seller Beware: Consumer Protection Insights for Industry

The FTC's revised endorsement guides have raised the stakes for companies using social media to promote their brands or services. This is particularly the case with respect to the relatively new disclosure requirements surrounding paid blogger endorsements. We previously discussed paid blogger endorsements in light of the FTC's Revised Endorsement and Testimonial Guides.

Google has become the second company in recent months to allege that an agency hired to promote its services had gone "rogue" and used paid blogger endorsements without the company's knowledge or consent. Which raises the question of whether advertisers should spend more time minding the store and whether agencies should spend more time educating their staff on the finer points of the FTC's endorsement guides.

As the FTC made clear in the Hyundai case, it does not view ignorance as an excuse when it comes to compliance with its endorsement guidelines, though Hyundai did get a pass, in part because it had a policy against the use of paid endorsements without disclosures and quickly dealt with the issue once it learned of it.

In Google's case, they got lucky because the blogs, which attested to Google Chrome's benefits and posted a promotional video bore the legend "This post is sponsored by Google." (though some allege that the blogs misinformed consumers about Chrome's benefits to small businesses, which, if true, could also potentially be a possible violation of the guides.)

Ultimately for Google, it ended up being more of a public relations embarrassment as Google has historically opposed paid endorsements. And Google quickly took down the blogs.

There is an old Russian proverb, at least according to Ensign Chekov of the Starship Enterprise, "Fool me once, shame on you; fool me twice shame on me." Will the FTC at some point insist that companies keep a sharper eye on the agencies they hire for social media promotions?

© Arnold & Porter Kaye Scholer LLP 2012 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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