The Federal Trade Commission recently announced revisions to its “Guides Concerning Use of Endorsements and Testimonials in Advertising,” (“Endorsement Guides”).
Why it matters?: The revisions include several changes that according to the FTC “merit your attention,” such as:
Guidance regarding not procuring, suppressing, organizing, upvoting, downvoting or editing consumer reviews in ways that likely distort what consumers really think of a product;
Addressing incentivized reviews, reviews by employees and fake negative reviews by competitor;
Updating the definition of “endorsements” to clarify that it can include fake reviews, virtual influencers and social media tags; and
Providing a clearer explanation of the potential liability that advertisers, endorsers and intermediaries face for violating the law.
The FTC has brought a number of enforcement actions in recent years against a variety of companies related to alleged deception in the use of endorsements and customer reviews. This is a fast-moving area that is of increasing focus to the FTC.
Background: The Endorsement Guides provide detailed guidance regarding how an advertiser can (or cannot) use endorsements, testimonials and customer reviews in advertising – including on websites and elsewhere.
What’s next?: Dealers should review these changes with legal counsel, website providers and advertising professionals to ensure compliance with the FTC guidance regarding the use of endorsements, testimonials or consumer reviews.
Further resources: In addition, the FTC has issued updated Staff Guidance on the Endorsement Guides, with “answer[s to] more than 40 more questions, as well as examples and other guidance.”
Jeff Aiosa
Chairman, Regulatory Affairs Committee
NADA