For companies that have been trying creatively to comply with
the Federal Trade Commission's new endorsement guidelines
(effective December 1, 2009), help may have arrived this week. The
Word of Mouth Marketing Association released a guide on complying
with the FTC guidelines on February 17, 2010. See
http://womma.org/ethics/disclosure/
.
The FTC's recent revisions to its endorsement guidelines were
intended to clarify its enforcement stance regarding advertising
and marketing done through the Internet. With increased
consumer/brand interaction through blogs, Facebook, Twitter, and
other social media sites, the FTC decided to provide guidance on
how to avoid running afoul of its deceptive advertising rules in
these new venues. The FTC was especially concerned about content
that does not appear to be paid-for advertising but for which the
speaker or author receives a material benefit that could affect the
credibility that consumers give to the author's
statements.
The new guidelines require disclosure of "material
connections," such as being employed, being paid, or being
given free goods, services, or special privileges in connection
with commenting about a company or its products or services
online.
The key points for businesses in the new guidelines
are:
- If a company employee posts something favorable about the company or its products or services online, the fact of employment must be disclosed.
- Bloggers must "clearly and conspicuously" disclose if they are paid or get a free product or service that they mention in a blog post or other online comment.
- A company that pays or provides a free product or service to a blogger will be liable for any false statements made by that blogger. The company also has a duty to instruct the blogger on the appropriate notice the blogger must give about being paid or receiving a free product or service and the need for truthfulness and substantiation of claims. The company also must monitor the blogger's compliance with the endorsement guidelines.
- When paid or given free products or services, bloggers will be liable for false or unsubstantiated statements they make about the company that paid them or its products.
- If consumers are given points or some other reward for passing along a marketing message to their contacts, they must disclose that they are receiving a reward, and the advertiser must take steps to ensure that the disclosures are being provided.
See
http://ftc.gov/os/2009/10/091005revisedendorsementguides.pdf
for the updated FTC endorsement
guidelines.
This sounds straightforward, but in a world in which many posts
contain fewer than 140 characters, there isn't much room for
disclaimers and disclosures. Over the last few months, companies
have been designing compliance policies, educating their employees
and marketing groups about the new rules, and trying to figure out
what form the disclosures should take.
On February 17, 2010, the Word of Mouth Marketing Association
released a guide which may begin to set some industry standards for
how to provide appropriate disclosures (in not too many
characters). Examples include:
- I am an employee [or representative] of company name.
- I received product or sample from company name to review.
- I was paid by company.
- For microblogs such as Twitter, include the hashtags #spon, #paid, or #samp.
The social media world continues to evolve very quickly and surely corporate compliance with the new FTC endorsement guidelines will evolve as well. Dorsey & Whitney LLP will strive to keep you up-to-date on important developments in this area.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
