Blockchain Legal Resource

Last week, the FTC announced its long-awaited finalization of updated Endorsement Guides. These guidelines come after the FTC initially voted to publish revised guidelines in May 2022. The new Guides were approved by a unanimous vote and make a significant number of updates to the 2009 version.

The Commission reviewed the 108 comments it received and amended the final Guides based on those comments. Two definitions included in the final Guides are of particular interest: 

Definition of endorsements: the Guides expand the definition of “Endorser” to expressly include virtual influencers, social media tags, and fake endorsements and reviews, and require disclosures to be difficult to miss and easily understandable by ordinary people. Based on public comments, the Commission added a sentence to Example 12 stating that fake positive reviews used to promote a product are “endorsements.” The Commission is also deleting “or service” from “product or service,” because the term “product” includes a “service.”

Definition of clear and conspicuous: The Guides add a definition of “clear and conspicuous” to describe the characteristics necessary to make disclosures effective. 

As previewed in the proposed Guides, the FTC emphasized that endorsements in advertising directed to children are “of special concern” but decided to retain its proposed new provision reading:

Endorsements in advertisements addressed to children may be of special concern because of the character of the audience. Practices that would not ordinarily be questioned in advertisements addressed to adults might be questioned in such cases.

However, the Commission indicated they were still exploring the issue, following a workshop in October 2022 addressing the special challenges presented by advertising to children, especially children under 12 years of age. 

The FTC also issued an updated version of its popular Endorsement Guides FAQs, adding 40 new questions and updating dozens of existing answers.