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New FTC Guidelines to Affect Bloggers' Product Endorcements

Earlier this month, the Federal Trade Commission approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the Section 5 of the FTC Act (15 U.S.C. 45).

For the first time, the guidance covers blogs and other social media platforms:

The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.

The guidelines offer several illustrations of endorsements that do and don't fall under the Act. This one specifically speaks to bloggers.

  • A consumer who regularly purchases a particular brand of dog food decides one day to purchase a new, more expensive brand made by the same manufacturer. She writes in her personal blog that the change in diet has made her dog's fur noticeably softer and shinier, and that in her opinion, the new food definitely is worth the extra money. This posting would not be deemed an endorsement under the Guides.

  • Assume that rather than purchase the dog food with her own money, the consumer gets it for free because the store routinely tracks her purchases and its computer has generated a coupon for a free trial bag of this new brand. Again, her posting would not be deemed an endorsement under the Guides.

  • Assume now that the consumer joins a network marketing program under which she periodically receives various products about which she can write reviews if she wants to do so. If she receives a free bag of the new dog food through this program, her positive review would be considered an endorsement under the Guides.

"Practices inconsistent with these Guides," the FTC notes, "may result in corrective action by the Commission under Section 5 if, after investigation, the Commission has reason to believe that the practices fall within the scope of conduct declared unlawful by the statute."

Source: Wisconsin Law Journal