Porzio Life Sciences Enforcement Action Update: FTC Proposes Updates to Guidance Regarding Advertising

June 30, 2022

By Porzio Life Sciences

The Federal Trade Commission (FTC) is proposing updates to its Endorsement Guides relating to digital advertising and marketing and is seeking public comment on the proposed revisions. The "Guides Concerning the Use of Endorsements and Testimonials in Advertising" offer guidance to businesses and others to ensure that advertising using endorsements or testimonials is truthful, and adheres to the requirements of the FTC Act. "Endorsements" and "Testimonials" are defined broadly by the Guides to mean "any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party other than the sponsoring advertiser."

The FTC proposes updating the definition of "endorsement" to include “marketing and promotional” messages and that tagging a brand in a post could indicate that the tag is an endorsement. The definition would also define “clear and conspicuous” disclosures as ones that are “difficult to miss (i.e., easily noticeable) and easily understandable by ordinary consumers” and includes specific guidance on the use of audio and visual disclosures. The General Considerations section discusses potential liability involving potentially misleading or deceptive statements by endorsers. The proposed revisions also discuss how advertisement agencies and paid consultants could be held liable for disseminating what they knew or should have known was a deceptive endorsement. The Guides speak to testimonials and the provision of “competent and reliable scientific evidence” to substantiate claims made, along with expert and organization endorsements and their “material connection” with endorsers whereby “[t]he [FTC] proposes clarifying that the disclosure of a material connection does not require the complete details of the connection, but it must clearly communicate the nature of the connection sufficiently for consumers to evaluate its significance.” Additionally, the Guides mention using celebrities as endorsers during interviews and then subsequent social media posts by them and whether disclosure obligations are necessary even if the subsequent post is not paid for.

While the FTC did not include anything specific with regard to advertising to children, it did say it will have a public event for research purposes to learn more about the potential need for additional disclosures and other measures.

The FTC is also proposing updates to the agency’s business guidance titled “.com Disclosures: How to Make Effective Disclosures in Digital Advertising.” The guidance, first published in March 2013, provides instruction to businesses on digital advertising and marketing and seeks to prevent digital deception practices that mislead consumers online. The agency is seeking public comment on the following issues, among others:

• the use of sponsored and promoted advertising on social media;
• advertising embedded in games and microtargeted advertisements;
• whether current guidance adequately addresses advertising on mobile devices;
• how guidance related to the use of hyperlinks can be strengthened to better protect consumers; and
• the adequacy of online disclosures when consumers must navigate multiple web pages.

The FTC is currently seeking public comment through August 2, 2022.

A copy of the Advertising Guide is available here.

A copy of the .com Disclosures is available here.

For more information regarding FTC enforcement, please see the OPDP Promotional Violations section of the Enforcement Actions Database.

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