Brands, celebrities, and influencers should be aware that the Federal Trade Commission (FTC) recently released updated Endorsement Guides -the first time the FTC has done so since 2009. The Guides provide critical information about the FTC's expectations for endorsements and advertising, and are therefore important to note to avoid the ire of the FTC.

The Guides apply to advertising, marketing and endorsements in "all media, whether they have been around for many decades (like television and magazines) or are relatively new (like social media)."

Below are some important takeaways from these new Guides (in addition to what was already included in the Guides - see our previous articles here and here):

  • The definition of an "endorsement" has been further broadened to cover tags and reviews, and reiterate that the list of endorsements is illustrative not exhaustive. This means that almost all promotional activity on social media should be assumed to fit within the definition.
  • A new definition of "clear and conspicuous" has been added, clarifying that it means being "difficult to miss (i.e., easily noticeable) and easily understandable by ordinary consumers." The new Guides also clarify that disclosures must be stated in both visual and audible elements of an advertisement or post, and that platforms' general disclosures (like Instagram's "Sponsored Post") may not be sufficient.
  • Brands and advertisers are responsible for and must monitor the actions of their endorsers - as an advertiser may be liable "for an endorser's deceptive statement," even when the endorser is not liable. This makes it even more important for brands and companies to be acutely aware of these Guides and have sufficient safeguards in place to protect themselves (see our previous articles here and here for further guidance).
  • Digital or AI-powered influencers or avatars of celebrities and the like will be held to the same standards as all others. This is critical, given the more common use of digital influencers.
  • Consumer reviews and other endorsements must be substantiated with reliable and sufficient evidence, and the procuring, suppressing, or editing of consumer reviews (including fake ones) to distort consumer perceptions of a product or service are prohibited.
  • The FTC does not consider the purchase or creation of "fake followers" on social media - which is a major and prevalent issue on social media - to be "inherently misleading," nor is it a violation per se for a person or agency to use the same to misrepresent an individual's influence.
  • Advertisements directed to children will be subject to a high standard of scrutiny and are "of special concern because of the character of the audience." This means that those marketing products to children should be extremely careful with their disclosures and go above and beyond to avoid any legal issues.

It is also worth reading the examples stated within the Guides as they provide excellent guidance as to the FTC's expectations and how the regulations will be interpreted, as well as the "What People Are Asking" document published by the FTC alongside the Guides, as it provides a Q&A-like information about common questions relating to the content of the Guides.

The FTC has recently shown that it will strictly monitor and regulate advertising, particularly on social media. We have already seen many celebrities and influencers subject to enforcement actions by the FTC, making it even more important for all involved to understand and comply with the latest legal requirements associated with endorsements and advertising.

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.