Whether Companies Like It or Not: New FTC FAQs

Whether Companies Like It or Not: New FTC FAQs

In 2015, the Federal Trade Commission updated the answers to its frequently asked questions, also called “What People Are Asking”, regarding its Endorsement Guides. The FTC last updated the FAQs in 2009 to address blogs and social media. Written clearly and in an engaging style, the FAQs specifically address questions about product placements and endorsements and contests on social media platforms like Twitter, Facebook, Pinterest and YouTube. The update also follows, and others say precedes, enforcement actions.

“Suppose you meet someone who tells you about a new product,” the FAQs effortlessly begin. In short, it describes the Guides as “reflect[ing] the basic truth-in-advertising principle that endorsements must be honest and not misleading.”

Per attorney Allison Fitzpatrick in Today’s General Counsel, examples of the FTC’s past investigations into dishonest and misleading endorsements, thus violating the Guides, include:

  • The security company ADT LLC for allowing paid endorsers to represent themselves as independent reviewers
  • The footwear and accessories company Cole Haan for failing to have Pinterest contest entrants identify their pins as being entries.
  • The entertainment company Sony Computer Entertainment America LLC and its advertising agency, Deutsch LA, for, most notably, encouraging employees to promote a particular PlayStation without also requiring that employees disclose the employer-employee relationship.

One FAQ asks whether one should provide an additional disclosure about employment on Facebook when endorsing a product even if that person’s Facebook page identifies the employer. “It’s a good idea” is the response.

It’s not only a good idea for the employee, but Per Fitzpatrick, it’s also the company’s responsibility to monitor what others say on its behalf.

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