At a time when some influencers are making good money – and sometimes millions of dollars – for endorsing and promoting everything from fake eyelashes on Instagram to the latest video game on YouTube, the Federal Trade Commission (FTC) announced on February 12, 2020 that it is seeking public comment on whether to make changes to its Endorsement Guides as part of the agency’s retrospective review of all current rules and guides.
The Guides were first issued in 1980 and designed to assist businesses and others in conforming their endorsement and testimonial advertising practices to the requirements of Section 5 of the FTC Act. The Guides were updated in 2009 to more directly address social media (see our posting on that here). Since 2009, the FTC has issued various guidance documents directed to businesses and influencers – see, for example, our previous post discussing the 2015 updates to their Q&A here.
In a Federal Register notice, the FTC asks for comments on a range of questions, including:
- whether the Guides should be changed to account for changes in technology or the economy;
- whether some of the FTC’s guidance documents should be incorporated into the Guides;
- whether children are capable of understanding disclosures of material connections;
- whether incentives like free or discounted products bias consumer reviews, and whether or how those incentives should be disclosed;
- whether composite ratings that include reviews based on incentives are misleading, even when reviewers disclose incentives in the underlying reviews;
- whether the Guides should address the use of affiliate links by endorsers; and
- what, if any, disclosures advertisers or operators of review sites need to make about the collection and processing of publication of reviews to prevent them from being deceptive or unfair.
Commissioner Rohit Chopra issued a separate statement, advocating for developing formal rules which codify elements of the currently voluntary endorsement guides so that violators can be liable for civil penalties and damages under 15 U.S.C. §§ 45(m)(1)(A) & 57. He also suggests instituting requirements for technology platforms (e.g., Instagram, YouTube, and TikTok) that directly or indirectly profit from influencer marketing.
Comments will be due within 60 days of publication of the Federal Register notice. Because of the impact of the 2009 updates, any new changes to the Endorsement Guides can be expected to have far-reaching effects. We will be monitoring comments.