Consumer Reports writes to respond to the Federal Trade Commission’s (“FTC” or “Commission”) request for comment on its Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Endorsement Guides”).
In order for markets to function, buyers need reliable information. While consumers are aware that much of the information available online may be biased or simply inaccurate, they still rely heavily upon online reviews and endorsements. Unfortunately, the FTC’s approach to date to address prejudiced and fraudulent reviews has not been sufficient to meaningfully root out online misinformation, especially as new forms of advertising — like social media and influencer marketing — have outpaced the FTC’s guidance.
The FTC needs to substantially expand the scope of the Endorsement Guides to clarify that companies cannot provide inducements to consumers or reviewers to engage in any type of social media engagement — including likes, follows, reposts, hashtags — unless that incentive can be disclosed to people who can view the engagement. In many cases, meaningful disclosure will be impossible, so the practice itself should be forbidden. The FTC should also clearly state that the promotion of content through fake automated or semi-automated social media accounts is prohibited.
The FTC should also commit to stronger enforcement of the Endorsement Guides and to providing updating guidance on a more timely basis. Finally, the Commission should seek out new ways to promote and socialize its endorsement guidance, as there does not appear to be consistent understanding of what types of promotions are allowed and which are not. The FTC will need to take a novel, multi-faceted approach to catch up to the current state of online marketing.