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The Federal Trade Commission recently released proposed
changes to their Consumer Product Testimonial and Endorsement Rules.
They are:
An advertisement containing a consumer endorsement
about the performance of an advertised product or service must reflect
the actual performance of the product or service. Essentially the
advertiser must have sufficient evidence, if applicable, competent and
scientific evidence, to verify that the consumer endorsement is
correct. Sec. 255.2(a)
In addition, the consumer endorsement
must be representative of the results consumers would generally
achieve. The endorsement can not be an atypical result. Advertisers
must also have sufficient evidence to support general results.
These
proposed changes do not apply to highly subjective testimonials for
certain products such as movies, games, or restaurants. But if the
advertiser is paying the consumer endorser to endorse the product, then
the above rules do apply.
Most importantly, if an advertiser
is paying a consumer to endorse a product with cash or free products,
then the advertiser and the consumer must disclose the financial
relationship. If not, both advertiser and consumer may be held liable
for making false statements.
HOW DOES THESE RULES AFFECT BLOGGERS AND ADVERTISERS IN NEW MEDIA?
In
the new proposed rules, The Federal Trade Commission also addressed
advertising in new media (Web 2.0). Essentially, if an advertiser pays
a blogger to write a review endorsing a product or service, the
advertiser and the blogger must disclose the financial relationship. In
addition, both blogger and advertiser both will be liable for any false
or unsubstantiated claims regarding results of products or services.
WHAT CAN ADVERTISERS AND BLOGGERS DO TO AVOID LIABILITY?
1.
When using bloggers to endorse product or services, advertisers should
make certain that their products do what they claim to do. Advertisers
should extensively test products, run trials, and document evidence
that substantiate results for most individuals.
2. Advertisers
should provide data to bloggers that evidence typical results for most
individuals. Advertisers should stress to bloggers that if the product
does not produce the desired results as documented, do not write a
favorable review.
3. Advertiser should include disclaimers on
consumer endorsements that state that results are typical of most
individuals using the products. However, if a consumer achieves an
unfavorable result, it is atypical and may be based on a variety of
personal factors unknown to the advertisers.
4. When writing a
favorable review or endorsement of a product, bloggers should always
disclose they received the product for free or was paid to write the
review.
5. Bloggers should always give their true opinion of the product whether paid or not.
6. Bloggers should post any product disclaimers and company trials or evidence substantiating your review of the product.
Although
the proposed rules have yet to be adopted, I think the above tips are
great practices for advertisers and bloggers. The Commission may not
adopt all of the rules, but considering the explosion of new media,
regulation is inevitable.
I welcome your thoughts!
