New FTC Guidelines for Endorsements and Testimonials

New FTC Guidelines for Endorsements and Testimonials

In this Emerging Issues commentary, Barry J. Reingold of Perkins Coie LLP examines new guidelines by the Federal Trade Commission (FTC) as to the use of endorsements and testimonials in advertising. Mr. Reingold discusses these changes and gives advice on how to comply with the guidelines.

Mr. Reingold writes: The Guides now apply explicitly to bloggers and other informal 'word-of-mouth' endorsers. Bloggers who are compensated to test and endorse products must disclose that fact in the endorsement. According to the Guides, compensation may be as simple as getting an expensive product for free if the blogger is well known in the product user community and regularly reviews new products.

Under the Guides, advertisers and endorsers may be jointly liable for false or unsubstantiated statements in endorsements. Thus, in our example of Joe the Blogger, both the manufacturer and Joe may be liable for false or deceptive statements in the blog (such as '10 times faster than any other game system out there') or for failing to disclose that the manufacturer gave Joe a free system. The fact that the advertiser does not control what Joe says is not a defense.

Does your advertising violate the Guides? First, determine whether a statement or online product posting is 'advertising' for FTC purposes. Is it an explicit or implicit claim by an advertiser or its agent about the qualities, characteristics or efficacy of a product or service designed to promote sales? Julie's blog statement that Smoothie Skin cures eczema is an advertising claim. But simply posting on her blog a picture of Julie applying Smoothie Skin is not an advertising claim.

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