FTC Proposes Revisions to Endorsements, Testimonials Guides

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The FTC has proposed revising its guides for endorsement and testimonial advertising practices to state that non-typical testimonials on a key aspect of the advertised product should be accompanied by clear and conspicuous disclosure of generally expected results when the advertiser does not possess adequate substantiation for the representation.

Testimonials reflecting consumer experience on a key attribute of a product will likely be interpreted as representing that the endorser’s experience is representative of what consumers will generally achieve, the agency concluded.

The Commission has also proposed changes to its guidance with respect to expert endorsements. The Guides Concerning the Use of Endorsements and Testimonials in Advertising appear at CCH Trade Regulation Reporter ¶39,038. The guides are advisory in nature. In an enforcement proceeding, the Commission would have the burden of proving that a particular use of an endorsement or testimonial was deceptive.

Application to New Types of Advertising

In light of comments received in an initial comment period, the agency is considering amending the guides to deal with new types of advertising, such as e-mail and Internet advertising. The Commission has proposed including several new examples that address the issues of advertiser and endorser liability and disclosure of material connections in various high-tech contexts.

According to the Commission's November 21 announcement, many of the proposed changes are clarifications or additional examples of the principles embodied in the existing guides, which were last updated in 1980, according to the FTC. Other proposed changes state principles that have been established in Commission enforcement actions. Several represent substantive changes from the current Guides, based upon increased knowledge of how consumers view endorsements.

Advertiser, Endorser Liability

Among these changes, the FTC has proposed a new provision explicitly recognizing two principles flowing from the Commission’s law enforcement activities: (1) advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers; and (2) endorsers may also be subject to liability for their statements.

Written comments on the notice of proposed changes must be received by January 30, 2009. Comments should refer to “Endorsement Guides Review, Project No. P034520” and should be delivered to: Federal Trade Commission, Office of the Secretary, Room H-135(Annex S), 600 Pennsylvania Avenue, NW, Washington, DC 20580, or filed in electronic form at: https://secure.commentworks.com/ftc-endorsements.

A November 21 news release on the development appears here. The 86-page FTC Notice of Proposed Changes to the Guides is available here on the FTC website.