Hunton Retail Law Resource

The FTC voted today to issue revised proposed Guides Concerning the Use of Endorsements and Testimonials in Advertising, aka, the “Endorsement Guides.” In a 5-0 vote, including a yes vote from the FTC’s newest Commissioner, Alvaro Bedoya, the FTC agreed to publish their proposal in the Federal Register and will take comment on the updates from the public. In addition, the FTC announced that it will hold a virtual event on October 19, 2022, in which it will consider the special challenges presented by advertising to children, especially children under 12 years of age.

The FTC’s proposal would make a number of significant changes to the longstanding and well-read Guides, which were last reviewed in 2009. First, the FTC would expand its definition of “Endorser” to expressly include virtual influencers and fake endorsements and reviews, and would require disclosures to be difficult to miss and easily understandable by ordinary people. Second, the Guides would now cover activities that have the effect of distorting or misrepresenting what consumers think, such as deleting or not publishing negative reviews, buying fake reviews, or “review gating.”

The changes would also provide additional detail on what constitutes a “material connection” to a brand that might merit disclosure, and would modernize examples to include influencer advertising and incentivized reviews. The Guides also would clarify the liability of advertisers, endorsers, intermediaries (such as advertising agencies), and of platforms (who could bear liability for representations they make about their built-in disclosure tools).

Finally, and importantly, the FTC emphasized that endorsements in advertising directed to children are “of special concern.” Because the agency currently lacks a full evidentiary record to make a recommendation, it will take research, recommendations, and comment at a public event this Fall, focused on:

• children’s capacity at different ages and developmental stages to recognize and understand advertising content and distinguish it from other content;
• the harms to children resulting from the inability of children to recognize advertising;
• what measures should be taken to protect children from blurred content in digital marketing; and
• the need for and efficacy of disclosures as a solution for children of different ages, including the format, timing, placement, wording, and frequency of disclosures.

The FTC’s proposal should be published in the Federal Register shortly.