Yesterday I received an “Advertising Alert” from Gary Kibel, a lawyer at Davis & Gilbert LLP (D&G). This alert brought to my attention a recent action taken by the Federal Trade Commission (FTC) against a public relations agency involving claims of misleading online endorsements. It is the first case of FTC bringing an action against an online marketer over this subject, and therefore it is an extremely important one to analyze. It both emphasizes the importance of making proper disclosures about marketer’s relationships with those whose products/services they decide to endorse/promote online, and shows us that owners may be personally liable, and the liability may actually be tied to marketing performed prior to the FTC’s guidelines regarding mandatory disclosure (of sponsor-endorser relationships) coming out.
D&G ends their report with the following 3-point conclusion:
Why Is The FTC’s Action Against Reverb and Snitker Important?
The FTC’s action … is not only important because it is the first action against bloggers since the effective data of the revised Guides but it is significant because:
- The FTC brought its first action against a public relations agency — not the agency’s client. By bringing the action against a public relations agency, the FTC makes clear that agency employees have the same duty to disclose their relationship with their clients as the client’s own employees.
- The FTC brought the action against an individual — Snitker, the agency’s sole owner and only office and director. According to the FTC… Snitker directed, formulated and/or participated in the misleading online endorsements…
- The FTC brought the action … for posts they made between November 2008 and May 2009, several months before the effective date of the revised Guides (December 1, 2009). By doing so, the FTC puts the industry on notice that it can bring an action against misleading online posts made prior to the effective data of the revised Guides.
You may read the full alert in PDF here.
If you haven’t done so yet, make sure you comply with the Federal Trade Commission’s requirements regarding the disclosures. Samples (both for merchants and affiliates) may be found here. FTC’s answers to questions regarding the guidelines may be found here and here.
3 thoughts on “FTC Brings First Action Against Misleading Online Endorsements”
I think it’s despicable that the FTC can go back and bring action against people for things posted before their “guidelines” went into effect. There are laws against that. Actual laws, not “guidelines” that are treated like laws.
The FTC explained that the guidelines were just a clarification of existing law. It has always been a violation of the FTC Act to do things that are unfair or deceptive in commerce. So the FTC clarified that bloggers making positive comments without disclosing their relationship with the marketer is deceptive.
Thanks for chiming in with this important clarification, Gary.
I don’t believe seeing anything like this (statements that retroactive posts will also be influenced) written about the FTC’s Guides before. Obviously, this particular case underscores the need for disclosures better than anything.