Revised FTC Guides Change Advertising Landscape
Perhaps you are an audiophile who is used to receiving samples of hot new stereo equipment and then posting reviews of those items on your blog. Maybe you are the marketing director of a company promoting a weight loss product and you have been comfortable posting a “results not typical” disclaimer in small type at the bottom of the television screen. Or you are a brand manager excited about the celebrity endorsement you have lined up for the new product you are about to launch in 2010. If any of these descriptions fit, then you need to be familiar with the revised Federal Trade Commission Guides concerning the use of endorsements and testimonials in advertising effective December 1, 2009.
In this first update to the Guides since 1980, the FTC has reinterpreted the mandate of the FTC Act, which prohibits “unfair methods of competition” and “unfair and deceptive acts and practices,” and has signaled its intention to give the statute a much more expansive reading when applied to these common forms of advertising. In practical terms, how will the new Guides affect advertising practices in the three examples cited above?
With the Guides’ requirement that “endorsers” disclose “material connections” between themselves and the seller of the advertised product, our audiophile must reveal that he received the new headphones he is raving about free from the manufacturer, who likewise is required to have procedures in place to monitor the blogger’s compliance.
The diet product manufacturer who touts one user’s dramatic weight loss no longer can get away with that small print disclaimer. If it does not have substantiation that its results are “representative of what consumers will generally achieve,” it must say so and it is required to “conspicuously disclose the generally expected performance in the depicted circumstances.”
And when you are shaking hands on a deal with your celebrity endorser, you need to make sure she understands her obligation to disclose her connection with your company when promoting the endorsed product on talk shows or social media.
These are but three of the situations covered by the new Guides, which contain some 35 detailed interpretive examples. For the text of the Guides, see the following link: http://www.ftc.gov/os/2009/10/091005revisedendorsementguides.pdf, and for questions regarding their application consult Mike Doctrow, Harvey Freedenberg, Rebecca Finkenbinder or Brian Gregg of the McNees Intellectual Property Group.
2009 McNees Wallace & Nurick LLC
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