Thursday, July 26, 2012

What everyone misunderstands about the FTC endorsement guides

If you're on Twitter, or run a blog, or do any self-promotion whatsoever, you may have become aware of the FTC Endorsement Guides. If not, you should.

There are people out there suggesting that you should end every blog post, every email, every everything by disclosing whether you have received anything free or below cost that you've mentioned in your post. That's certainly one way to be safe. Far be it from a lawyer to recommend against over-disclosing. But I think there's some confusion around what exactly is and isn't required, and I think there's a lot of overkill going on.

The actual text of the relevant section of the Guides (255.5) says:

When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.
To me, that shows a 2-part test: are you endorsing the product, and are your readers likely to understand the circumstances under which you got the product? If the first answer is yes and the second one is no, you should probably disclose the connection. But the FTC gives many examples in the text that suggest it's not true 100% of the time.

The Guides aren't a law. They say right in their text that they are guides that the FTC are going to use to interpret activities that they see in the world. The law they are interpreting is the misleading advertising provisions of the FTC Act, and what they're looking for is whether what you're doing is misleading. That's important, because it shows what the guides are actually attempting to do: they aren't a set of rules at all. They spell out a bunch of clarifications and examples to help you understand when the FTC thinks that a statement might be misleading and to help you know what you need to do in order to make it not be misleading.

An example may help. And the Guides actually use a blogger as one of their examples: a video game blogger who receives a new console from a manufacturer for free and gives it a good review. The FTC believes the blogger should disclose that the console was free and gives 2 reasons why:
  1. A blog is the kind of media where connections between the blogger and the manufacturer aren't immediately obvious, so readers wouldn't necessarily know that the console was provided for free; and
  2. The console is a high-value item and so getting a free one is a big deal, and if readers knew it was free they might use that fact to judge how credible the positive review really is.
So the analysis is much more nuanced than Free Product = Must Disclose. In fact, the FTC uses another example for celebrity endorsements where they make it clear that since the public expects celebrities to be paid for endorsements no disclosure is required. It's much more like:

+ Free product
+ Not commonly-known or reasonable to believe that you get free product
+ If readers knew the product was free they might reassess your review
= Must disclose

There's no one right way to handle the disclosure. You can put it right in the text, you can put it at the end of the blog entry, you can put it in your footer, or numerous other ways.

I'm not saying that if you run a blog you don't need to disclose getting free product to review. (This is a good time to repeat the weasel words: I'm not your personal attorney!) But I am absolutely saying that when I see people end every email and blog post with a disclosure statement, I wonder if they're just repeating something they saw someone else do and not necessarily doing what's right for them.

Press release summarizing the guides (with link to full text)

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