FEBRUARY 2020 , & PROMOTIONS >> ALERT IS THE INFLUENCER LANDSCAPE GOING TO CHANGE? FTC SEEKS PUBLIC COMMENTS ON ITS ENDORSEMENT GUIDES

UPDATE The Federal Trade Commission (FTC) is extending the deadline to submit public comments as part of the agency’s review of its Endorsement Guides. The deadline was originally April 21, 2020; it is now June 22, 2020. In response to requests from potential commenters for additional time to file comments due to the global COVID-19 pandemic, the FTC will soon publish a notice in the Federal Register announcing the comment deadline extension. Instructions for submitting public comments are available here.

The Federal Trade Commission (FTC) recently announced a review of its “Guides Concerning the Use of Endorsements and in Advertising” (Endorsement Guides) and that it is seeking public comments on whether changes need to be made to them.

While the FTC has been focused on influencer and THE BOTTOM LINE marketing in recent years, it has not The FTC’s decision to review its Endorsement Guides may result in substantial updated its Endorsement Guides changes to them, including with respect to influencer marketing, affiliate disclosures since 2009 — well before the introduction of new platforms such and consumer reviews. In light of these potential changes, companies that utilize as , and TikTok. endorsements in their marketing campaigns, as well as endorsers, influencers and The FTC’s decision to revisit the affiliates, should consider submitting comments to the FTC. We stand by ready to Endorsement Guides may well herald assist you in filing public comments with the FTC. substantial changes to address recent developments in technology and how consumers perceive new media. testimonials, including consumer, “material connections” — connections expert and influencer endorsements, between an endorser and a seller of THE FTC’S INTERESTS comply with Section 5 of the FTC a product that could affect the weight Act. As such, the FTC has stated or credibility of the endorsement — be The Endorsement Guides provide that it has “particular interest” in the clearly and conspicuously disclosed. guidance to marketers in determining Endorsement Guides’ requirement that whether their endorsements and

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ADVERTISING, MARKETING & PROMOTIONS >> ALERT

The FTC also expressed interest in that have occurred since they were consumers who use social media a wide variety of other questions, last revised? understand that influencers who including: promote products generally are >>>> Should the FTC incorporate any doing so only because they are paid >>>> Whether children are capable portion of “The FTC’s Endorsement or given something by the marketer, of understanding disclosures of Guides: What People Are Asking?” regardless of what or whether material connections, >>>> How well are advertisers and disclosures appear in social media >>>> If the Endorsement Guides should endorsers disclosing unexpected posts? address the use of affiliate links by material connections on social >>>> Should they address affiliate links? endorsers, and media platforms? >>>> What disclosures, if any, should >>>> What disclosures, if any, advertisers >>>> Does the sufficiency or insufficiency advertisers or the operators of or operators of review sites should vary by platform, type of material review websites or review platforms make about reviews to prevent connection or other factors, and, if make about the creation, collection, them from being deceptive or unfair. so, how? processing or publication of reviews >>>> Should they provide more detail on or ratings to prevent those reviews SPECIFIC QUESTIONS what disclosures of material or ratings from being deceptive or In addition to the broad categories, connections are sufficiently clear or unfair? the FTC listed more than two dozen unclear in different social media specific questions for which it is formats? COMMISSIONER CHOPRA’S seeking comments and evidence SEPARATE STATEMENT and data, such as empirical data, >>>> To what extent do young children In a separate statement that further consumer perception studies or understand disclosures of material emphasized the potential for real consumer complaints, which support connections? changes to the Endorsement Guides, the commenters’ positions. >>>> Do incentives, such as free or Commissioner Rohit Chopra noted his Key questions about the Endorsement discounted products that marketers support for a “close and careful Guides include: give to consumers in exchange for review” of the Endorsement Guides posting reviews of their products or and a “self-critical analysis of the >>>> Are there deceptive or unfair services but without specifically agency’s enforcement approach.” In practices involving endorsements requiring that the reviews be addition, Commissioner Chopra that are not covered? favorable, skew or bias the resulting explained that he hopes the FTC reviews? >>>> Have consumer perceptions would consider taking steps “beyond the issuance of voluntary guidance,” regarding endorsements changed >>>> Are composite ratings (e.g. “five including by: since they were last revised? stars”) misleading when they are based on some incentivized >>>> What is the degree of compliance? >>>> Developing specific rules for reviews, and if so, would a technology platforms (such as >>>> What modifications, if any, should disclosure help? Instagram, YouTube and TikTok) be made to address technological, “that facilitate and either directly or >>>> Is there evidence to support or economic or environmental changes indirectly profit from influencer contradict the assertion that marketing”; FEBRUARY 2020

ADVERTISING, MARKETING & PROMOTIONS >> ALERT

>>>> Codifying elements of the >>>> Specifying the requirements that Endorsement Guides into formal companies must adhere to in their FOR MORE INFORMATION rules so that violators can be held contractual arrangements with Allison Fitzpatrick liable for civil penalties and influencers, including through Partner damages; and sample terms that companies can 212.468.4866 [email protected] include in contracts. Paavana L. Kumar Associate 212.468.4988 [email protected] or the D&G attorney with whom you have regular contact.

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