Companies that use nontraditional media, such as blogs, to market their goods and services must still comply with the advertising laws and regulations including the prohibitions on false and misleading advertising. Recently, the Federal Trade Commission (“FTC”) amended its Guides Concerning Use of Endorsements and Testimonials to include several new forms of marketing such as blogs
Federal Trade Commission
Let’s Play “Truth or Consequences”: The New FTC Guides for Endorsements & Testimonials Bring Truth a Little Bit Closer
We all would agree that “As Seen on TV” is one of the great brands of all time. The brilliant marketeers behind it recognized the extraordinary power of television – people believe as true what they see on TV.
Why that is I’m sure has been the subject of enumerable studies; after all it defines who we are as consumers and sets the stage for a marketplace where the phrase “targeted consumer” takes on real meaning. Between infomercials laden with celebrity endorsement, a tried and (sometimes) true tactic for moving people closer to their wallets coupled with compelling “just like my neighbor” testimonials, and home shopping networks with live celebrities and testimonials whose “it has to be true” quality rings true for millions of people, consumers are drawn to purchase like moths to a light.
The online world has taken this phenomenon and cranked it up a notch. The more modern version of “As Seen on TV”, its sister brand “As Seen on the Internet” – is an even more powerful lure. It is extraordinary how so many people believe that the “default” for the Internet is Truth, as if there were a mysterious group of censors and law enforcement officials who were reading everything found on the Internet to ensure that anything false or fraudulent automatically was removed. If only that were so.
Social networking has taken this propensity to believe anything electronically delivered to an even higher level. People tend to believe as true what others in their electronic neighborhoods say. This tends to be the case whatever the form of visual channel, from “expert” blogs in About.com, to the thousands of pseudo-news blogs, closed social environments like Facebook or MySpace, or in some form of IM (Include Twitter here). The stories of fraudulent promotion on Twitter already are legion. Add to this the hundreds, perhaps thousands of for-hire bloggers who will supply testimonials for a fee, and the potential for online, “As Seen on the Internet” consumer deception increases dramatically.
It was inevitable that at some point the FTC would have to step in. The Federal Trade Commission historically has taken consumer fraud seriously, but the massive amounts of online fraud, ranging from paid for false testimonials to the most severe forms of identity theft , have created a new vigor in that agency.
On December 1, 2009, new Federal Trade Commission’s Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Guides”), with heightened requirements for bloggers to disclose affiliations with sponsors of those endorsements, go into effect. See FTC Press Release dated October 5, 2009, here. The text of the Guides, 16 CFR Part 235, is available, here. Although these Guides are advisory in nature and do not expand the scope of liability under Section 5, they are intended to provide guidance as to how the FTC would apply governing law to various fact patterns.…
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Toys “R” Us, Indeed
–Dan Kelly, Attorney
A couple of weeks ago, news reports came out that KB Toys, which had filed for bankruptcy in December, sold its trademarks and domain names to a company called CE Stores LLC for $2.1 million. Last week, Toys “R” Us disclosed that it owns CE Stores. While this may be somewhat…