New FTC Guides Raise Stakes for Companies that Advertise Through Social Media

Marketing Times

The FTC released a new version of its Guides Concerning the Use of Endorsements and Testimonials in Advertising. The Guides, effective as of December 1, 2009, contain numerous provisions that apply to messages within social media. The article outlines the details of the revised FTC Guide, as well as advises companies that use social media to approach with caution.

Under the Guides, a statement made by a consumer in social media will be deemed an endorsement” if the statement can be considered to be sponsored” by the advertiser. The article warns that companies should be aware of statements made by consumers that can be classified as an endorsement,” and an advertiser may be liable for the endorser’s statements, even if the advertiser did not approve these comments.

The FTC Guides outline the liability companies face for claims. Advertisers are aware that they must ensure that claims in their ads are truthful, and they may be held liable for any false or misleading claims. The Guides state that an advertiser may be liable for false claims made by consumers, even if the advertiser does not use those claims itself. The Guides also state that any material connection between the advertiser and endorser must be disclosed. The FTC has also provided conditions of what constitutes a material connection.

The article advises that companies who advertise through social media protect themselves. Companies should pay close attention to the Guides because the company may be liable not only for its failure to comply with the guides, but also for the failures of consumers they work with. The best protection for a company is to ensure practices and comply with the Guide standards.