NARB Gives FTC an Opportunity to Apply New Endorsement Guides

Smile Prep operates a website that provides reviews of clear aligners (otherwise known as invisible braces”) based on an extensive five-point analysis.” Because Smile Prep’s sole source of revenue consists of commissions from some of the companies it reviews, Smile Direct Club (or SDC”) filed an NAD challenge suggesting that the company slants its rankings and reviews to favor those companies that make payments to it at the relative expense of those companies that don’t.”

Last December, NAD recommended (among other things) that Smile Prep avoid conveying the message that Smile Prep does not give preferential treatment” to its affiliate partners and that it clearly and conspicuously disclose that Smile Prep’s rankings, reviews, and product information of the clear aligners of its affiliate partners are advertising.” Smile Prep appealed the decision, an NARB panel affirmed the decision this spring, and the panel opened a compliance inquiry this summer.

Smile Prep made a number of changes to its site in an attempt to comply with the NAD and NARB decisions. For example, with respect to the issues we’re focusing on in this post, Smile Prep included a box at the top of each clear aligner review page on the website that begins with the words Advertising Disclosure” in bold and then explains that: When you buy products and services through our links, we may earn commissions.”

NARB determined that the disclosure is neither clear nor conspicuous.” Among other things, NARB was concerned that by having the disclosure appear on each page of the website, Smile Prep has obscured the fact that the disclosure is meant to apply to references to affiliate partners and their products.” Moreover, it worried that consumers may not understand the disclosure to communicate that the rankings, reviews, and other information about Smile Prep’s affiliate partners are advertising.”

Smile Prep advised NARB that it believed that it was already in compliance with the NAD and NARB decisions and with applicable law, and that it is not willing to make further changes. It further stated that, in the event of a referral, it looked forward to working with the FTC to craft a meaningful and fair approach to the regulation of all affiliate review sites.” Most companies wouldn’t look forward to that, especially after the FTC’s recent update to the Endorsement Guides.

The updated Endorsement Guides include more granular requirements on what it means for a disclosure to be clear and conspicuous” and the FTC reminds advertisers: Just remember that what’s clear to you may not be clear to everyone visiting your site, and the FTC evaluates ads from the perspective of reasonable consumers.” It will be interesting to what the FTC determines in this case and, if determines that Smile Prep needs to change its disclosures, how that will impact other affiliate review sites.