Compliance with Online Endorsement Guidelines

by Richard Newman on July 3, 2012

With increasing regularity, business are turning to social media and professional bloggers to promote their products and services.  There are, however, FTC Guidelines that set forth clear legal and regulatory restrictions governing deceptive advertising and endorsements applicable to online advertising.

All too often, those within the interactive advertising industry seem to forget the FTC Guideline despite the fact that failing to comply can result in false and deceptive advertising.  Critical elements that must be considered include, without limitation, that an endorser’s statements must reflect honest opinions, findings experience.  By way of
example, an endorser may not misrepresent having used a product or service.

Additionally, any material connection that exists between the endorser and the advertiser must be disclosed clearly and conspicuously.  A material connection can include a familial or employment relationship.  Similarly, if an endorser has received anything of value in exchange for the endorsements, such as a free product or payment, this
must be disclosed.

Media platforms that may have limited real estate and limit the length of the message are no exception.  Disclosures must be present on these platforms (e.g., Twitter), as well.  In this situation, the FTC suggests utilizing a hashtag.

Disclosures must be clear and conspicuous.  Disguised disclosures will draw scrutiny.  These days, everyone in the stream of commerce is potentially subject to a regulatory investigation and can be held liable for failure to comply with the FTC Guidelines.  It is the advertiser’s responsibility to inform an endorser regarding their legal obligations.
The wise advertiser will establish clear policies for online endorsers, including bloggers, in an effort to comply with the FTC’s rules of the road.

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