The U.S. Federal Trade Commission (FTC) on October 13 published a Notice of Penalty Offenses advising more than 700 companies that they could incur significant civil penalties if they use endorsements in ways that run counter to the FTC’s guidance. The FTC, in its own words, “blanket[ed] industry” with these notices to send a “clear message” that companies cannot use “fake reviews and other forms of deceptive endorsements” to “cheat consumers and undercut honest businesses.”
With the rise of social media, the FTC is concerned that consumers cannot differentiate between authentic content and advertising. The types of endorsements called out in the notice include misrepresenting that an endorser is an actual, current, or recent user of the product; using an endorsement without good reason to believe that the endorser continues to have the presented view; using an endorsement to make deceptive performance claims; or failing to disclose a material connection with the endorser.
The FTC sent the notice to an “array of large companies.” The