As outlined by the FTC Endorsement Guides, advertisers are required to have “reasonable programs” in place to train and monitor members of their network. The scope of the program may depend upon the risk that deceptive practices by network participants could cause consumer harm.
Some Elements Every Program Should Include
Given an advertiser’s responsibility for substantiating objective claims, network members should be informed of what they can and cannot say about products/services. For example, a list of health claims that can be made, along with instructions not to go beyond express/implied claims.
Network members should also be instructed on their responsibilities for disclosing their connections to advertisers.
Advertisers should periodically search for what network members are saying, and follow up if questionable practices are found.
The FTC acknowledges that it is unrealistic to expect advertisers to be aware of every single statement made by network members. Importantly, however, it is up to advertiser’s to make a reasonable effort to know what network participants are saying.
A reasonable training, monitoring and compliance program should be designed and implemented.
Social Media Advertising
Social media advertisements must be clearly labeled as advertising. Clear and conspicuous disclosures of any material connection that might affect the weight or credibility of endorsements (e.g., reviews) are also required. A material connection can include, without limitation, family, friends, free products and/or payment).
More than ever, advertisers that use third-parties for advertising and marketing should implement and enforce written policies that reasonably ensure compliance with FTC legal regulations. In fact, the implementation of such policies may negate potential liability for the actions of third-parties, while the failure to do so can have the opposite effect.
Hinch Newman LLP possesses the experience to guide digital marketers through FTC legal regulatory requirements in order to minimize potential liability exposure.
Richard B. Newman is an FTC CID attorney at Hinch Newman LLP. Follow FTC defense lawyer on National Law Review.
Attorney advertising. Informational purposes only. Not legal advice.