FTC Tightens Rules on Influencers, Endorsements, and Consumer Reviews

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In 2023, the Federal Trade Commission (FTC) introduced significant changes to regulations surrounding influencers, endorsements, and consumer reviews, signaling a more aggressive stance on transparency and authenticity in digital marketing. Two key developments emerged: updates to the FTC’s Endorsement Guides and a proposed rule aimed at cracking down on deceptive consumer reviews.

The updated Endorsement Guides expanded the FTC’s guidelines on several fronts, clarifying what qualifies as an “endorser” or “endorsement” and outlining clearer rules on who can be held liable for noncompliance. In particular, the FTC emphasized that disclosures of material connections between brands and influencers must be conspicuous and easy for the average consumer to understand. These disclosures must also be “unavoidable,” especially when made on social media or other digital platforms. To enforce these updates, the FTC issued warning letters to influencers and industry associations in sectors such as beverages and sugar, alleging failures to disclose paid partnerships or receipt of free products.

With the rise of influencer marketing, these changes underscore the importance of transparency, especially in advertorials. Brands are advised to review and update their influencer, endorsement, and training programs to ensure full compliance with the new rules.

In addition to updates on endorsements, the FTC proposed a new Rule on the Use of Consumer Reviews and Testimonials, designed to bolster the agency’s enforcement capabilities. If finalized, the rule would allow the FTC to impose civil penalties on brands for generating fake reviews, purchasing positive reviews, or suppressing negative feedback. This move highlights the increasing scrutiny on the authenticity of consumer feedback in digital marketplaces. The comment period for the proposed rule ended in September 2023, with a final ruling expected in 2024.

As these regulations evolve, brands are urged to conduct compliance checkups on their customer review programs and closely monitor for the final FTC rule. Noncompliance could result in steep penalties, making it critical for companies to stay ahead of the new standards governing influencer endorsements and online reviews, including advertorial guidelines.

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