Eleven Urban Myths about the FTC Guidelines for Endorsements & Testimonials

There’s still a great deal of misinformation about the Federal Trade Commission (FTC) Guidelines for Endorsements and Testimonials (FTC Guides or Guidelines) wafting around on the Internet, and from time to time, it makes its way into mainstream media stories.

We’re trying to chip away at it. Blog With Integrity did the two free Disclosure webinars last year. My colleagues and I leave comments with accurate information when we find posts and articles with errors. Just about every blogging conference since the beginning of the year has had a session about the Guides, and we’re doing the Bridging Brands and Bloggers webinar for PR, marketing and advertising professionals next Tuesday.

But the misinformation persists. So, it seems like the time is now for a little debunking of the urban myths about the FTC Guidelines.

MYTH: There’s an $11,000 fine for violations of the Guidelines.

FACT: The Guidelines explain how the FTC would apply Section 5* of the FTC Act to endorsements and testimonials. They are not rules or regulations, and there are no fines. Any penalties would be assessed by the courts as the result of a legal enforcement process during which the FTC would have to make its case for deceptive advertising.

* Section 5 broadly prohibits “unfair or deceptive acts or practices in commerce.”

MYTH: The FTC dictates how you should disclose.

FACT: There’s no checklist of  “approved” ways to disclose. The Guidelines simply require  “clear and conspicuous” disclosure of material relationships between sellers and endorsers when those relationships would not otherwise be clear to the consumer. The FTC  Guidelines do include examples to illustrate the conditions under which disclosure would be required. However, there are no specific prescriptions as to how the disclosure should be done.

If you are interested in best practices for disclosure, take a look at the slides from the general session I did at BlissDom in February.

MYTH: The Guidelines were revised because bloggers are unethical.

FACT: They were revised because it had been 30 years since they were first published. It was time for an update.  Initially because it had become clear that the way disclosure was being handled in traditional media for certain types of products  (like weight loss) wasn’t working as it should. In the process, it became clear that changes in the the media landscape, and specifically, the rise of social media, needed to be addressed.

MYTH: Mom blogs have been singled out for special scrutiny.

FACT: Absolutely not. This was confirmed by Mary Engle, the FTC’s Associate Director for Advertising Practices, during the Blog With Integrity webinar on November 10, 2009.

The FTC Guidelines apply to endorsements and testimonials in all types of marketing including viral,  WOM, blogs, TV, radio and print.

MYTH: Bloggers are being held to a higher standard than journalists.

FACT: The issue at hand isn’t standards or even ethics. The Guidelines are all about making sure that the consumer has enough information to evaluate the endorsement or testimonial. If she would not reasonably expect a material relationship to exist or would not understand it without the disclosure, the endorser should disclose. If the context is clear, disclosure is not required.

In the case of the mainstream media, consumers generally understand that the reporter didn’t buy the item or choose his own topic, and can evaluate the report accordingly. We make different assumptions about people “just like us,” thus disclosure is necessary. A blog or website that operates just like a magazine would be treated like a mainstream magazine because the consumer, or reader, would have the proper expectation. More on this topic in this post.

MYTH: Celebrities are not subject to the guides.

FACT: There are specific examples about celebrity endorsements. The litmus test is the consumer’s expectation. If we would understand the relationship — for example a celebrity athlete wearing logo gear — no disclosure is necessary. We assume a compensated relationship. If the consumer wouldn’t understand the paid relationship, disclosure is required. More on this topic in this post.

MYTH: The FTC said that X was (or was not) a violation.

FACT: The FTC does not speak about specific cases. This could compromise ongoing investigations. More importantly, if it were you, or your company, would you want the FTC passing comment before a full investigation had been completed? I wouldn’t.

MYTH: The FTC is gunning for bloggers.

FACT: The FTC has stated on more than one occasion that its enforcement attention is focused on advertisers and companies, not on individual bloggers.

MYTH: The FTC guidelines violate the 1st amendment.

FACT: The FTC guidelines apply to commercial speech. Compensated, material relationships. They do not apply to opinions where there is no material relationship. If you are paid for your opinion — even if you can say whatever you want — it’s commercial speech. Commercial speech is paid speech. Not free speech.

Free speech is still free. And protected.

MYTH: All you need is a disclosure policy.

FACT: A disclosure (or editorial) policy is a best practice. You still must disclose within the post or tweet if you have a material relationship with a seller.

MYTH: The FTC guidelines will destroy the blogosphere.

FACT: So far, not so much.

Disclaimer:  I am not a lawyer and do not play one on the Internet. This post is my opinion based upon analysis of public records, including the FTC Guidelines.

This post also appears on BlogHer.