Federal Trade Commission Updates Rules for Product/Service Reviews and Endorsements
On October 5, 2009, the Federal Trade Commission announced that the FTC had approved final revisions to its guidelines regarding endorsements and product/service reviews. These guidelines were last revised in 1980. The new guidelines go into effect December 1. Under these new guidelines, writers on the Web - e.g., "bloggers" or writers posting on a Facebook account or through Twitter - must clearly disclose if they have received any free products or payments from companies in exchange for reviewing products or services. According to the FTC, "bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service." (See link below).
Additionally, the guidelines indicate that testimonials need to clearly state the experience that consumers should expect from the product. This is a significant change from the previous guidelines which required advertisers to include disclaimers only when results were not typical. The revised guidelines also clearly state that both advertisers and celebrity endorsers may be held liable for unsubstantiated or false claims made in an endorsement or for failing to disclose any material connections between the endorser and the advertiser. This duty extends to non-traditional endorsements, such as those made in social media or on television talk shows.
While the guidelines are administrative interpretations of the FTC Act and are therefore not binding law, the FTC utilizes the guidelines when deciding whether to launch an enforcement action.