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June 3, 2015

The FTC's New and Improved Endorsement FAQs

Seller Beware: Consumer Protection Insights for Industry

It's hard to believe it's been over five-and-a-half years since the FTC revised its Endorsement Guides. At the time, there were a lot of questions about how they applied to bloggers and other emerging forms of media. Shortly after the revised Guides came out, FTC staff published FAQs -- appropriately titled "What People Are Asking" -- to answer common questions. Last Friday, the FTC announced that it had updated What People Are Asking to answer questions it received over the past five years.

The FAQs have been significantly expanded, so if your company uses endorsers or influencers, whether in traditional advertising, through social media, or in affiliate marketing, you'll want to read them all. In the meantime, here are a few highlights:

  • When Do Connections Between the Endorser and Advertiser Need to Be Disclosed? Throughout the FAQs, the FTC's message appears to be to disclose the connection when in doubt because it is difficult to know whether consumers are already aware of the connection and what connections consumers will consider material. Whether the disclosure is effective is context-specific, but the updated FAQs discourage using a hyperlink because the necessary disclosure is short.
  • Endorsements Via Social Media. On the one hand, the FAQs indicate that "likes," "pins," and "shares" can constitute endorsements and any compensation or incentives received by consumers to take these actions probably should be disclosed. And, the FTC cautions advertisers against using features that don't allow for making such disclosures clearly and conspicuously. On the other hand, the FAQs also say that because the FTC doesn't know how much weight consumers put into "likes," etc. when purchasing goods or services, the lack of a disclosure may not be deceptive. Ultimately, the burden may be on advertisers to show that it doesn't matter to consumers. Thus, the "when in doubt" approach seems prudent here too.
  • Employee Endorsements. The updated FAQs contain a new section on endorsements by employees. Advertisers should have a policy the establishes what employees can say publicly about the company's products, disclosures that they need to make, and a process for removing or correcting statements that don't have adequate disclosures when they come to the company's attention. The FTC advises periodically reminding employees about the policy.

© Arnold & Porter Kaye Scholer LLP 2015 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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Matthew Shultz
Matthew Shultz
Counsel
Washington, DC
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