The FTC Act and the Guides: What Are They? (Pt. 1)

Enforced by the Federal Trade Commission, the Federal Trade Commission (FTC) Act (15 U.S.C. §§ 41-58) was originally designed “to promote competition and to protect the public from unfair and deceptive acts and practices in the marketing of goods and services” (Oswald 241). Richard Cleland, the assistant director of the division of advertising practices at the FTC, spoke out about updates made to the Guides Concerning the Use of Endorsements and Testimonials in Advertising in response to current marketing techniques and the increased use of the internet as a marketing and advertising tool, in general: “We were looking and seeing the significance of social media marketing in the 21st century and we thought it was time to explain the principles of transparency and truth in advertising and apply them to social media marketing” (Arango). Prior to these updates, the Guides were last updated in 1980, a significant time before the internet started to gain widespread popularity with the general public and even longer before the emergence of blogging and social media.

The disclosure of relationships between bloggers and companies was a prominent issue when updating the Guides. As of December 1, 2009, bloggers who review, rate, or provide testimonials on products must fully disclose “any connection with advertisers, including, in most cases, the receipt of free products and whether or not they were paid in any way by advertisers, as occurs frequently” (Arango). Under the Guides, an endorsement by a blogger is considered to be “posting[s] by a blogger who is paid to speak about an advertiser’s product,” regardless of who the blogger is compensated by. Even when monetary compensation is not received, postings by a blogger can still be considered endorsements. If a blogger frequently receives product samples to review from companies because “he or she is known to have wide readership within a particular demographic group that is the manufacturers’ target market,” the blogger’s postings about the products and services can be considered endorsements. When a blogger is not paid to speak about an advertiser’s product or service and “purchases a product with his or her own money and praises it on a personal blog or on an electronic message board,” an endorsement is not made and the Guides do not apply (“Notice of adoption of revised Guides” 9-10). To illustrate how an endorsement made by a regular person though the use of new media can be identified, new examples have been added to the Guides in Section 255.

Taken from my research assignment, Blogging and the Law. If you missed any of the previous sections, please click on the links on the sidebar to view them, and stay tuned to read the rest!