August 15, 2012

Beware of Commenters

Consumer Blog Report

The Advertising Standards Board of Australia's advertising self-regulatory organization, the Advertising Standards Bureau, recently considered whether an advertiser could be liable for user-generated comments posted on its brand page on Facebook. Although it ultimately found that the advertising at issue did not violate the advertising code, the Board concluded, as a threshold issue, that user-generated comments were advertising for which the advertiser could be liable. Commentary following the Board's ruling indicates that companies advertising in Australia now must consider how to monitor and police comments being made on their Facebook pages.

Comments by users on a US-directed Facebook page or other type of online site that is owned or operated by an advertiser could also land the advertiser in hot water in the US. (Consumer comments on sites not affiliated with the advertiser would likely not result in false advertising liability unless there was a connection between the advertiser and the commenter, as discussed below.) By providing consumers with a forum where they can make statements about the advertiser's products, the advertiser is arguably disseminating consumer endorsements subject to the FTC's Endorsement Guides. As a general rule, if the advertiser cannot truthfully make a claim itself, it cannot disseminate a consumer endorsement making the same claim. Usually, the FTC will assume that the endorser's experience is typical of what all consumer's will experience, and the advertiser must be able to substantiate it or disclose what the typical experience will in fact be. However, the Endorsement Guides indicate that some statements may be interpreted as simply the subjective opinion of the consumer and not a claim about the typical consumer experience. Unfortunately, the Endorsement Guide provides little explanation about how to distinguish between these types of statements. Advertisers and endorsers must also disclose any material connection between them, such as compensation or free products. This is just a brief (and incomplete) overview of possible endorsement issues, and while we are not aware of any Endorsement Guide actions based on user-generated comments, it is a risk that advertisers operating online sites should consider how they want to manage.

Beyond the endorsement context, statements by commenters could be used by government enforcers or private plaintiffs to support other legal claims. For example, comments could be used as evidence of how reasonable consumers interpret advertising claims made directly by the advertiser, intended or typical product usage, or knowledge of product problems. Advertisers need to consider all of the risks in allowing comments on sites they own or control and ways to mitigate these risks, such as monitoring comments or approving them before posting.

© 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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