The Federal Trade Commission (FTC) has announced that it has finalized an updated version of its Endorsement Guides, which now provide deeper guidance around influencer marketing and online reviews.
It’s the first time that the FTC has updated its guidelines since 2009 and the latest version draws on public and industry feedback it sought in May 2022 to better align its recommendations to the current advertising landscape.
The updates include an expanded definition of “endorsement.” According to the FTC, tagging a brand on social media could constitute an endorsement (although not always) and that a “fake” positive review is still considered an endorsement.
In addition, the new Guides say that influencers and intermediaries including advertising agencies, public relation firms, and reputation management companies, may be considered liable for creating or disseminating deceptive endorsements.
“The Guides, at their core, reflect the basic truth-in-advertising principle that endorsements must be honest and not misleading,” the FTC said on its website. “An endorsement must reflect the honest opinion of the endorser and can’t be used to make a claim the marketer of the product couldn’t legally make.”
Further, the new Guides provide recommendations around how companies handle consumer ratings and reviews. While companies may edit unlawful or obscene reviews, the criteria must be applied across both positive and negative reviews. In addition, companies are advised against handling reviews in ways that misrepresent the consumers’ opinions.
Companies could be engaging in misleading conduct if they delete or hide negative reviews, offer incentives for positive reviews, or falsely report negative reviews as fake, the FTC also warned.
The Guides were first proposed in 1972 when endorsements in advertising focused on TV, radio, and written publications. While the Guides don’t carry civil penalties, law experts say that they provide a lens into what practices the FTC may find misleading or unfair.