FTC Updates Advertising Policy

New rules hold celebrities liable for endorsements
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WASHINGTON: The Federal Trade Commission has updated its guidelines on testimonials in advertising, according to David Oxenford of Davis Wright Tremaine, LLC. The new rules particularly affect celebrity endorsements and sponsorship disclosures, he said.

“These revised guidelines directly impact the established practices of broadcasters and new media companies,” Oxenford writes. The revised guidelines “effectively ban the old standard ‘results not typical’ disclaimer so commonly in use in connection with a great deal of testimonial advertising.”

They also confirm the liability of celebrities and other endorsers for false product or service claims, and expand on disclosing what endorsers are getting for the endorsement.

“It is vital that media companies, in particular new media, understand the key provisions of these guidelines to make sure that they don’t become a target of any FTC enforcement action,” Oxenford writes. “The FTC has indicated that for now at least, its focus will be on enforcement in the new media world--bloggers, social media, viral campaigns--and other ‘nontraditional’ advertising celebrity guests on news and entertainment shows, endorsements by media personnel such as on-air DJs.”

Oxenford says disclaimers that “results may vary” will not be sufficient going forward, and products must be backed up by some proof of claims.

“Instead, the new guidelines state that any testimonial about the results of using a product be accompanied with a disclosure of the results that a typical user can expect to get from the product,” Oxenford writes in Davis Wright Tremaine’s BroadcastLawBlog. His full post on the topic is available at the site. The 85-page FTC document updating the guidelines is here.

(Image by Phil Beard)

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