On June 29, the Federal Trade Commission (FTC) published its updated Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Guides”), together with an FAQ document, FTC’s Endorsement Guides: What People Are Asking (“FAQ”). One day later, it announced its proposal for a new Trade Regulation Rule on the Use of Consumer Reviews and Testimonials (“Trade Regulation”). In the spirt of the FTC’s FAQ, we figured we would post a brief one of our own, highlighting some of the big changes (and non-changes).
Can you please explain what’s going on in one paragraph or less?
As background, the Guides explain the FTC’s view on the propriety of endorsements and testimonials made by third parties on behalf of advertisers under Section 5 of the FTC Act, which prohibits unfair and deceptive trade practices. The Guides were last updated in 2009. This update therefore brings a refresh and clarifies the FTC’s view on various scenarios that have arisen since 2009 given changes in technology and marketing practices. The Trade Regulation, by comparison, is focused on the narrow topic of fake consumer reviews, which are singled out because (a) they have been a particular focus of the FTC of late; and (b) the regulation would clearly entitle the FTC to seek civil penalties for violations (whereas its ability to do so under Section 5 of the FTC Act is somewhat murky).