The Federal Trade Commission (FTC) recently sent more than 90 letters to online “influencers”—including marketers, celebrities, and athletes—reminding them of the truth-in-advertising standards for endorsements and the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising (FTC Guides) applicable to such endorsements. In their May 2017 LawFlash, Morgan Lewis partners Rochelle Alpert and Karen Butcher examine the context of these letters and discuss common pitfalls and best practices to avoid scrutiny.
The FTC sent the letters following recent petitions by consumer watchdog group Public Citizen and affiliated organizations expressing their concern about insufficient disclosures in online endorsements and related advertising materials. In the letters, the FTC reminded recipients that any material connection between an endorser and the company whose product is being endorsed must be clearly and conspicuously disclosed. In general, a material connection is any connection that “might affect the weight or credibility that consumers give the endorsement.”
To avoid FTC scrutiny, Rochelle and Karen recommend adopting, implementing, and regularly monitoring compliance with written policies that require transparency related to endorsements online. The FTC Guides require companies (or marketers operating on their behalf) to both advise endorsers of their endorsement disclosure obligations and actually monitor the endorsements to ensure compliance. Finally, endorsers should avoid common pitfalls—such as using vague terms that are unlikely to inform consumers of the nature of the relationship between the endorser and advertiser, or placing disclosures among jumbles of hashtags at the end of social media posts.