Proposed FTC Regulations in Social Media

The FTC has proposed new guidelines for endorsements. There are sections within the amendments that are particularly relevant to implementation of social media campaigns so we would like to take a moment to explain those changes to our friends and clients.

The changes that were made in regard to online consumer endorsements, which could be blog posts, comments, forum threads, and more, are mainly concerned with transparency. The FTC wants to make sure that any connection between advertisers and consumer endorsers are made public in a conspicuous way.

One of Sitewire’s four tenets of social media is “Integrity,” in which we advise our clients to be transparent in their interactions with the community. We believe that this concept of integrity helps to create stronger relationships with consumers. We are in agreement with those who feel that following the regulations proposed by the FTC can actually be used to an advertiser’s advantage. Sitewire will make sure that all campaigns we create and run on behalf of our clients follow these guidelines, but current clients need not be alarmed since this will not be a departure from our regular operations.

A quick summary of the relevant points:

If a customer writes an opinion or recommendation about a product that is considered an endorsement. They don’t have to use the exact messaging of the advertiser in order to qualify as such.

Advertisers are liable for false statements made by an endorser.  

Full disclosure is necessary for any material connections between advertiser and endorser (such as payment or allowing them to keep the product.) This responsibility falls on both parties.

The endorser is also liable for their statements. If they make false claims about the product that can’t be proven both the advertiser and endorser will be responsible.

You can read the full text of the FTC proposed endorsement guideline amendments but the following example that was included in the report will give you a good idea of that portion that is related to social media:

Example 5: A skin care products advertiser participates in a blog advertising service. The service matches up advertisers with bloggers who will promote the advertiser’s products on their personal blogs. The advertiser requests that a blogger try a new body lotion and write a review of the product on her blog. Although the advertiser does not make any specific claims about the lotion’s ability to cure skin conditions and the blogger does not ask the advertiser whether there is substantiation for the claim, in her review the blogger writes that the lotion cures eczema and recommends the product to her blog readers who suffer from this condition. The advertiser is subject to liability for false or unsubstantiated statements made through the blogger’s endorsement. The blogger also is subject to liability for representations made in the course of her endorsement. The blogger is also liable if she fails to disclose clearly and conspicuously that she is being paid for her services.

How do you feel about these proposed changes? Agree with them, think it’s over regulated? Not really concerned because you already follow practices similar to this? Let us know in the comments.

As always, if any of our clients have questions on this might affect them specifically feel free to call us!

Tagged as: blogger outreach, FTC endorsement guidelines, Full disclosure, guidelines for endorsements, online consumer endorsements, Proposed FTC Regulations