In June last year, the Federal Trade Commission (FTC) updated its Endorsement Guides, the so-called “bible” for the business practices that could be considered unfair or deceptive in violation of the FTC Act. The guides had last been revised over a decade prior in 2009, and these latest amendments are a direct response to the shift to online marketing, notably social media. The new rules aim to ensure that advertisers and influencers adequately disclose their material connections, with some major names already falling afoul of these new measures, according to an article in JD Supra.
The significant refresh of these guides may not come as a surprise to many legal professionals, as it is a clear attempt by the FTC to keep pace with the rapidly changing digital landscape. This article aims to detail these changes, how they affect those in advertising and influencing, and the potential repercussions for any deviations from the guides.
The most significant change in the revised guides is the explicitly stated requirement for advertisers and influencers to fully disclose any material connections they have with the product they’re promoting. These disclosures have to be easy to notice, understandable, and free of any distractions, for both advertiser initiated and influencer generated posts. Indeed, failing to provide clear disclosure could result in severe financial penalties.
Another interesting alteration is a more nuanced approach to endorsements and testimonials. The FTC has made it clear in their Endorsement FAQs that the substance and context of any endorsement are just as crucial as the presence of an explicit disclosure. This effectively emphasises the need for honesty and transparency, not only in available financial details, but in the presentation and promotion of products and services as well.
In light of this, it’s crucial for those affiliated with advertising practices or influencer partnerships to update themselves on the revised guidelines. As the saying goes, ignorance of the law is no excuse, and for those in the promotion business, a failure to adhere to the new guides may be a costly oversight. As lawyers, it’s our responsibility to ensure our clients understand these FTC requirements and assist them in full compliance.