The Federal Trade Commission (FTC) has announced proposed changes to its Endorsement Guides, 16 CFR Part 255, which assist entities in conforming endorsements and testimonials in advertising to the requirements of Section 5 of the FTC Act. FTC continues to review the guides, first published in 1980, as part of its ongoing regulatory review process. FTC will be seeking public comment for 60 days on its proposed revisions once they are published in the Federal Register. The newly proposed changes are the result of FTC’s consideration of more than 100 comments received in response to its Federal Register notice published in February 2020. The 2020 Federal Register notice sought comments on the Endorsement Guides’ overall costs, benefits, and regulatory and economic impact and posed a number of specific questions as well.
In short, endorsements and testimonials are both defined broadly in the guides to include any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings or experience of a party other than the sponsoring advertiser. Endorsements and testimonials must be truthful, and advertisers who deceive consumers through their endorsements and testimonials may be in violation of Section 5 of the FTC Act.
The proposed revisions to the guides, in part, offer additional recommendations for advertisers promoting their products through methods that have recently increased in popularity, including social media and product reviews.
For example, the revised definition of the term “endorsement” in the proposed changes would make clear that it encompasses marketing and promotional messages, including instances where a social media user tags a brand in a post, indicating the user likes the brand. In addition, the FTC has proposed modifying the definition of “endorser” to extend to any entity that appears to be an individual, group or institution, and therefore would include fabricated endorsers.
Other notable proposed revisions include a new definition of a “clear and conspicuous” disclosure. The guides would give specific instructions for visual and audible disclosures, stress the importance of “unavoidability” when the communication involves social media or the internet, and say that the disclosure should not be contradicted or mitigated by, or inconsistent with, anything in the communication. In addition, the FTC has proposed to modify an example in the guides to make clear that an endorser does not need to go back and modify or delete a social media post as long as it was not misleading when posted and the date of the post is clear and conspicuous. However, if the post was later reposted by the endorser or shared by the publisher, it would suggest to consumers that the endorser continued to hold those views in that post. A number of other revisions to the guides are included in the FTC’s announcement.