The AP has a story up today which is getting a great deal of attention in the blogosphere today:
FTC plans to monitor blogs for claims, payments
I was interviewed for the article and quoted here:
"It would always be better for bloggers to self-police," said Robert Cox, president of Media Bloggers Association in New Rochelle, N.Y. "We have laws on the books. They apply to everybody, not just people who write blogs."
The FTC provided the following information about their proposed guidelines regarding endorsements and testimonials to the Associated Press who, in turn, provided them to me so that I might comment on them for the AP story which ran today.
As you will see, these guidelines have existed for many years but are being updated to include the Internet, online publishers and, specifically, bloggers.
The FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising are broad guidelines for advertisers of all stripes (tv, print, radio, blogs, word-of-mouth marketing). There is considerable interest in how the revisions will affect the online world. One thing to keep in mind is that these guides have not been revised since 1980, and obviously the world of marketing has changed a lot since then.
A couple of other key points: These are guidelines, not regulations. As such there are no civil penalties associated with them. But if advertisers do not follow the guides, the FTC may chose to investigate, as noted below. Also, as for the time line of the revisions, we believe it is likely that the FTC commissioners will vote sometime this summer on whether to adopt the revised guides as currently written, or whether further revision is needed.
FTC Statement
FTC staff attorneys are reviewing the public comments that have been made regarding revisions to the Guides Concerning the Use of Endorsements and Testimonials in Advertising. The FTC staff will come up with a recommendation to the agency's commissioners about whether the guides should be adopted in final form or whether further revision is needed. It is likely that the commissioners will vote on the matter some time this summer.
In revising the guides, which are nearly 30 years old, the commission will address current marketing techniques, such as blogging and word-of-mouth advertising. Those who are compensated to promote or review a product using these techniques are not exempt from the laws governing truthful advertising.
Federal Register Notice: Endorsements Guide
Past Press releases (these link to the Federal Register notice):
Proposed Revisions
Third item announces extension of comment period
Comments posted with regard to the proposed revisions
General Considerations:
The original deadline for submitting comments about the guide revisions (Jan. 30, 2009) was extended to March 2, 2009. Now, our staff attorneys are reviewing the comments to come up with a recommendation to the Federal Trade Commission’s commissioners about whether the guides should be adopted in final form, or whether further revision is needed. We anticipate that this process will take at least a few months.
One of the main issues under consideration concerns “typicality.” Here is some information from the 11/28/08 news release (link above) explaining its relevance:
Disclaimers Regarding Typicality
In a Federal Register notice published in January 2007, the FTC sought public comment on the overall costs, benefits, and regulatory and economic impact of the Guides, which were last updated in 1980. In the newly approved Federal Register notice, the FTC’s proposed revisions to the Guides address consumer endorsements, expert endorsements, endorsement by organizations, and disclosure of material connections between advertisers and endorsers. In the newly approved Federal Register notice, the FTC’s proposed revisions to the Guides address consumer endorsements, expert endorsements, endorsement by organizations, and disclosure of material connections between advertisers and endorsers. On the issue of consumer endorsements, the proposed revisions state that testimonials that do not describe typical consumer experiences should be accompanied by clear and conspicuous disclosure of the results consumers can generally expect to achieve from the advertised product or program.
These are guides and not regulations. With guides, no civil penalties are assessed. With regulations, there are civil penalties. Nevertheless, as noted below in language quoted from the Federal Register, the Commission may investigate practices that are inconsistent with these guides:
§ 255.0 Purpose and definitions
(a) The Guides in this part represent administrative interpretations of laws enforced by the Federal Trade Commission for the guidance of the public in conducting its affairs in conformity with legal requirements. Specifically, the Guides address the application of Section 5 of the FTC Act (15 U.S.C. § 45) to the use of endorsements and testimonials in advertising. The Guides provide the basis for voluntary compliance with the law by advertisers and endorsers. Practices inconsistent with these Guides may result in corrective action by the Commission under Section 5 if, after investigation, the Commission has reason to believe that the practices fall within the scope of conduct declared unlawful by the statute.
The Guides set forth the general principles that the Commission will use in evaluating endorsements and testimonials, together with examples illustrating the application of those principles. The Guides do not purport to cover every possible use of endorsements in advertising. Whether a particular endorsement or testimonial is deceptive will depend on the specific factual circumstances of the advertisement at issue.
