We’ve all at least once (and maybe only once) played the surprisingly revealing drinking game “Never Have I Ever”. You know, you go around the table with one person asking, “Never have I ever [fill in the blank]” with the others having to chug if they themselves have partaken in this activity.
The FTC, likewise, uses proposed scenarios to compel truth-telling in its recently-approved Updated Endorsement Guidelines and new Proposed Rule on the Use of Consumer Reviews. The FTC even uses an apt metaphor by explaining that it is trying to “help level the playing field for honest companies.” In fact, the FTC professes to use “all available means to attack deceptive advertising in the digital age,” so maybe one day it may take advertisers and influencers out to the local pub to find out if they are telling the truth.
But until then, instead of social disgrace we have civil liability to enforce the FTC’s fiats. To help you get through these lengthy missives before the bartender announces last call, here’s a summary:
Updated Endorsement Guidelines Highlights
Consistent with the original Guidelines, the Updated Guidelines prohibit endorsements of a product without clear and conspicuous disclosure in advertising of the material connection between the endorser and the advertiser. Specific modifications of the original Guidelines include:
What’s An “Endorsement”
- Tags in social media posts can be endorsements.
- A fake positive review is an endorsement.
- A fake negative review is NOT an endorsement, but it may violate the proposed Fake Reviews Rule and be a deceptive practice.
- An influencer with fake followers is NOT an endorsement issue, but it may violate the proposed Fake Reviews Rule and be a deceptive practice.
- A “product” that gets endorsed can also include the brand itself.
- New examples:
- A brand spokesperson who does NOT give personal beliefs, opinions or experience is NOT an endorser.
- The game play of a live-stream gamer who gets free video games from the developer is an endorsement.
What’s “Clear and Conspicuous” Disclosure
- Disclosure must be “difficult to miss (i.e., easily noticeable) and easily understood by ordinary consumers.”
- Disclosure should match the triggering claim – video/audio claim should have video/audio disclosure, etc.
- Disclosure must comport with targeted audience and platform; e.g., older consumers, children, smart phones v. computer disclosures, etc.
- Not sufficient if influencer posts connection to manufacturer only on her profile page.
- Not sufficient if consumers must click “more” to see influencer’s connection to manufacturer.
- Not sufficient if disclosure is in small print on white text on light background, competing with other unrelated text, or on screen for minimal time.
Liability
- An advertiser should:
- Provide guidance to endorsers;
- Monitor endorsers; and
- Remedy endorser’s non-compliance.
- Endorsers, ad agencies, PR firms, review brokers, reputation management companies and similar intermediaries may be liable for deceptive endorsements.
Consumer Endorsements
- Advertisers cannot manipulate consumer reviews/endorsements to distort what consumers think of their products.
- Disclosure of “Results not typical” may not be sufficient, but stating “most consumers …” may be helpful.
- Advertisers cannot suppress reviews or coerce positive reviews or threaten negative reviews.
Organization Endorsements
- No nos:
- Creating purported “independent” organization/institute to review products.
- Paying website for higher ranking. But paying for affiliated link referrals is o.k., provided appropriate disclosure is made.
Bonus Hashtag Info on Endorsement Disclosures for Sweepstakes and Contests
- #Product_Rocks or #Product_Sweeps or #Sweepstakes is insufficient.
- #Product_Sweepstakes or #Brand_Sweepstakes is sufficient.
Fake Reviews Rule
This new proposed Rule seeks to expressly set forth prohibited actions concerning fake consumer and celebrity reviews and endorsements, which are noticeably based upon the FTC’s recent enforcement actions. To summarize:
It is a deceptive practice to:
- Create, sell, buy or disseminate a consumer or celebrity review or testimonial when:
- it’s from a fake reviewer;
- the reviewer has no experience with product; or
- the review misrepresents the reviewer’s experience.
- Repurpose a consumer review for another product.
- Buy, compensate or incentivize a positive or negative review.
- Not adequately disclose a business insider, employee, etc. connection to the review.
- Mispresent a company-controlled website or review organization.
- Threaten or intimidate for positive reviews.
- Mispresent that reviews represent most or all of reviews submitted.
- Sell, buy or procure fake social media followers.
The Rule now goes out for public comment.
Hopefully, this will help you keep your glasses down when the FTC posits the question, “Never have I ever …”
