Wednesday, October 14, 2009

How to Determine If You Comply With the FTC's New Endorsements and Testimonials in Advertising Guide

Effective December 1, 2009, The Federal Trade Commission (FTC) will be adopting revised guides concerning the use of endorsements and testimonials in advertising. These regulations, 16 CFR Part 255, could drastically affect the legality of any endorsement and testimonial you may use. As one who publishes endorsements or testimonials to advertise your product or service, provides an endorsement or testimonial for free or for a fee, or otherwise utilizes endorsements or testimonials, this particular regulation has far-reaching implications.

So how do you know if Part 255 affects you? Multiple facts and issues must be reviewed and considered in order to determine the applicability of Part 255 and compliance therewith, including:

1. Determining whether the information provided on your website, in your advertisement, or elsewhere qualifies as an endorsement, as defined by Part 255;
2. Determining whether the endorsement is made by a consumer, expert, or other organization and how that affects the analysis;
3. Identifying the basis for the opinions, findings, beliefs, or experience of the endorser;
4. Identifying representations which may be deceptive, or without substantiation;
5. Advising as to the best way to present the endorsement or advertisement;
6. Identifying any material connections, as defined in the guide;
7. Preparing necessary disclaimer and disclosure information for use in connection with the endorsement or advertisement.

In addition, it is important to recognize that this guide pertains to consumer endorsements, expert endorsements, and endorsements by organizations. Consumer endorsements require different precautions depending upon, among other items, whether the goods or services were provided by the advertiser free of charge or commissioned solely by the consumer providing the endorsement or testimonial. Likewise, endorsements made by an expert, and sometimes an organization, may have to be substantiated with supporting information and/or studies and, at times, based upon an ongoing bona fide use of the product or service. Therefore, it is critical that the above matters be analyzed and considered prior to using an endorsement or testimonial in any advertisement.

Today, endorsements are fairly common on web sites, blogs, and other web properties. Bloggers, who may be subject to different disclosure requirements than traditional media reviewers, must ensure that the proper disclosures are made should the information provided qualify as an endorsement. These content providers, not to mention the advertisers who may be sponsoring them, must pay particular attention to Part 255's requirements.

While an experienced internet lawyer can provide you with information regarding this new guide, it is important that you recognize what this means for your business. You would be well-served to contact an attorney about the application of Part 255 to your business, blog, product, or endorsement.

Brian A. Hall is an attorney and partner at Traverse Legal, PLC, a law firm specializing in internet law and intellectual property matters as well as complex litigation. His law firm routinely blogs about compliance issues facing bloggers, including FTC Enforcement Guidelines Under Part 255, and handles e-commerce representation.

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