[Federal Register Volume 73, Number 230 (Friday, November 28, 2008)]
[Proposed Rules]
[Pages 72374-72395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-28294]
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FEDERAL TRADE COMMISSION
16 CFR Part 255
Guides Concerning the Use of Endorsements and Testimonials in
Advertising
AGENCY: Federal Trade Commission.
ACTION: Notice of proposed changes to Guides. Request for public
comments.
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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is
seeking public comment on proposed revisions to its Guides Concerning
the Use of Endorsements and Testimonials in Advertising (``the
Guides'').
DATES: Written comments must be received by January 30, 2009.
ADDRESSES: Interested parties are invited to submit written comments
electronically or in paper form.
[[Page 72375]]
Comments should refer to ``Endorsement Guides Review, Project No.
P034520'' to facilitate the organization of comments. Please note that
comments will be placed on the public record of this proceeding--
including on the publicly accessible FTC website, at (http://www.ftc.gov/os/publiccomments.shtm)--and therefore should not include
any sensitive or confidential information. In particular, comments
should not include any sensitive personal information, such as an
individual's Social Security Number; date of birth; driver's license
number or other state identification number, or foreign country
equivalent; passport number; financial account number; or credit or
debit card number. Comments also should not include any sensitive
health information, such as medical records or other individually
identifiable health information. In addition, comments should not
include any ``[t]rade secrets and commercial or financial information
obtained from a person and privileged or confidential. . . .,'' as
provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and
Commission Rule 4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing
material for which confidential treatment is requested must be filed in
paper form, must be clearly labeled ``Confidential,'' and must comply
with FTC Rule 4.9(c).\1\
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\1\ FTC Rule 4.2(d), 16 CFR 4.2(d). The comment must be
accompanied by an explicit request for confidential treatment,
including the factual and legal basis for the request, and must
identify the specific portions of the comment to be withheld from
the public record. The request will be granted or denied by the
Commission's General Counsel, consistent with applicable law and the
public interest. See FTC Rule 4.9(c), 16 CFR 4.9(c).
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Because paper mail addressed to the FTC is subject to delay due to
heightened security screening, please consider submitting your comments
in electronic form. Comments filed in electronic form should be
submitted by using the following weblink: (https://secure.commentworks.com/ftc-endorsements) (and following the
instructions on the web-based form). To ensure that the Commission
considers an electronic comment, you must file it on the web-based form
at the weblink (https://secure.commentworks.com/ftc-endorsements). If
this Notice appears at (https://www.regulations.gov/search/index.jsp),
you may also file an electronic comment through that website. The
Commission will consider all comments that regulations.gov forwards to
it. You may also visit the FTC website at http://www.ftc.gov to read
the Notice and the news release describing it.
A comment filed in paper form should include the ``Endorsement
Guides Review, Project No. P034520'' reference both in the text and on
the envelope, and should be mailed or delivered to the following
address: Federal Trade Commission, Office of the Secretary, Room H-135
(Annex S), 600 Pennsylvania Avenue, NW, Washington, DC 20580. The FTC
is requesting that any comment filed in paper form be sent by courier
or overnight service, if possible, because U.S. postal mail in the
Washington area and at the Commission is subject to delay due to
heightened security precautions.
The Federal Trade Commission Act (``FTC Act'') and other laws the
Commission administers permit the collection of public comments to
consider and use in this proceeding as appropriate. The Commission will
consider all timely and responsive public comments that it receives,
whether filed in paper or electronic form. Comments received will be
available to the public on the FTC website, to the extent practicable,
at (http://www.ftc.gov/os/publiccomments.shtm). As a matter of
discretion, the Commission makes every effort to remove home contact
information for individuals from the public comments it receives before
placing those comments on the FTC website. More information, including
routine uses permitted by the Privacy Act, may be found in the FTC's
privacy policy, at (http://www.ftc.gov/ftc/privacy.shtm).
FOR FURTHER INFORMATION CONTACT: Shira Modell, Attorney, Division of
Advertising Practices, Bureau of Consumer Protection, Federal Trade
Commission, Washington, D.C., 20580; (202) 326-3116.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. OVERVIEW OF THE CURRENT GUIDES
II. HISTORY OF THE GUIDES
III. DISCUSSION OF COMMENTS RECEIVED IN RESPONSE TO REGULATORY REVIEW
NOTICE
IV. SECTION-BY-SECTION DESCRIPTION OF PROPOSED AMENDMENTS
V. PROPOSED REVISED ENDORSEMENT AND TESTIMONIAL GUIDES
VI. INVITATION TO COMMENT
I. OVERVIEW OF THE CURRENT GUIDES
The Guides, 16 C.F.R. Part 255, are designed to assist businesses
and others in conforming their endorsement and testimonial advertising
practices to the requirements of Section 5 of the FTC Act. Although the
Guides interpret laws administered by the Commission, and thus are
advisory in nature, proceedings to enforce the requirements of law as
explained in the Guides can be brought under the FTC Act. In any such
proceeding, the Commission would have the burden of proving that a
particular use of an endorsement or testimonial was deceptive.
The Guides define both endorsements and testimonials broadly to
mean any advertising message that consumers are likely to believe
reflects the opinions, beliefs, findings, or experience of a party
other than the sponsoring advertiser. 16 C.F.R. Sec. Sec. 255.0(a) and
(b). The Guides state that endorsements must reflect the honest
opinions, findings, beliefs, or experience of the endorser. 16 C.F.R.
Sec. 255.1(a). Furthermore, endorsements may not contain any
representations that would be deceptive, or could not be substantiated,
if made directly by the advertiser. Id.
The Guides advise that an advertisement employing a consumer
endorsement on a central or key attribute of a product will be
interpreted as representing that the endorser's experience is
representative of what consumers will generally achieve. 16 C.F.R.
Sec. 255.2(a). If an advertiser does not have adequate substantiation
that the endorser's experience is representative, the advertisement
should clearly and conspicuously disclose either what the generally
expected performance would be in the depicted circumstances or the
limited applicability of the endorser's experience to what consumers
may generally expect to achieve. Id.
The Guides define an expert endorser as someone who, as a result of
experience, study, or training, possesses knowledge of a particular
subject that is superior to that generally acquired by ordinary
individuals. 16 C.F.R. Sec. 255.0(d). An expert endorser's
qualifications must, in fact, give him or her the expertise that he or
she is represented as possessing with respect to the endorsement. 16
C.F.R. Sec. 255.3(a). Moreover, an expert endorsement must be
supported by an actual exercise of expertise and the expert's
evaluation of the product must have been at least as extensive as
someone with the same degree of expertise would normally
[[Page 72376]]
need to conduct in order to support the conclusions presented. 16
C.F.R. Sec. 255.3(b).
Among other things, the Guides also state that:
(1) Advertisements presenting endorsements by what are represented
to be ``actual consumers'' should utilize actual consumers, or clearly
and conspicuously disclose that the persons are not actual consumers.
16 C.F.R. Sec. 255.2(b).
(2) An organization's endorsement must be reached by a process
sufficient to ensure that the endorsement fairly reflects the
collective judgment of the organization. 16 C.F.R. Sec. 255.4.
(3) When there is a connection between the endorser and the seller
of the advertised product that might materially affect the weight or
credibility of the endorsement (i.e., the connection is not reasonably
expected by the audience), such connection must be fully disclosed. 16
C.F.R. Sec. 255.5.
II. HISTORY OF THE GUIDES
In December 1972, the Commission published for public comment
proposed Guides Concerning the Use of Endorsements and Testimonials in
Advertising, 37 Fed. Reg. 25548 (1972). Extensive comment was received
from interested parties. On May 21, 1975, the Commission promulgated
three sections of the 1972 proposal as final guidelines (16 C.F.R.
Sec. Sec. 255.0, 255.3, and 255.4) and republished three others, in
modified form, for additional public comment. 40 Fed. Reg. 22127
(1975); 40 Fed. Reg. 22146 (1975). Public comment was received on the
three re-proposed guidelines, as well as on one of the final
guidelines. On January 18, 1980, the Commission promulgated three new
sections as final guidelines (16 C.F.R. Sec. Sec. 255.1, 255.2, and
255.5) and modified one example to one of the final guidelines adopted
in May 1975 (16 C.F.R. Sec. 255.0 Example 4). 45 Fed. Reg. 3870
(1980).
In January 2007, as part of its ongoing regulatory review process,
the Commission published a Federal Register notice seeking comment on
the overall costs, benefits, and regulatory and economic impact of its
Guides Concerning the Use of Endorsements and Testimonials in
Advertising. 72 Fed. Reg. 2214 (Jan. 18, 2007). The Commission
simultaneously put on the public record and requested comment on two
reports on consumer research regarding the messages conveyed by
consumer endorsements, as well as several other endorsement-related
issues, including the use of so-called ``disclaimers of typicality''
accompanying testimonials that do not represent experiences consumers
will generally achieve with the advertised product.\2\ The first
report, ``The Effect of Consumer Testimonials and Disclosures of Ad
Communication for a Dietary Supplement'' (``the Endorsement Booklet
Study''), was designed to examine whether consumer endorsements
communicate product efficacy and typicality, and whether any of several
prominent disclosures qualify or limit the claims conveyed by the ads.
The second report, ``Effects of Consumer Testimonials in Weight Loss,
Dietary Supplement and Business Opportunity Advertisements'' (``the
Second Endorsement Study''), was designed to explore the communication
of product efficacy and typicality by advertisements containing
testimonials of individuals who claimed to have achieved specific (that
is, numerically quantified) results with the advertised product or
system. Those reports are discussed in Part IV, below.
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\2\ The reports are available on the Commission's website,
www.ftc.gov/opa/2007/01/fyi0707.shtm, or from the Commission's
Public Reference Office, Room 130, 600 Pennsylvania Avenue, N.W.,
Washington, D.C. 20580.
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The Commission received 22 comments in response to its regulatory
review notice.\3\ Having considered those comments, as well as the
staff's consumer research, and its own extensive consumer protection
experience, the Commission now proposes various amendments to the
Guides and invites comments on these proposed changes.
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\3\ Brittany Adams (``Adams''); American Association of
Advertising Agencies/American Advertising Federation (``AAAA/AAF'');
American Herbal Products Association (``AHPA''); Association of
National Advertisers (``ANA''); Attorneys General of 33 States and
Territories and Hawaii Office of Consumer Protection (``Attorneys
General''); Stephen Calkins (``Calkins''); Center for Obesity
Research and Education (``CORE''); Council of Better Business
Bureaus, Inc. (``CBBB''); Electronic Retailing Association/Council
for Responsible Nutrition (``ERA/CRN''); FreedomWorks; Jenny Craig,
Inc. (``Jenny Craig''); Kelly Drye Collier Shannon (``Kelley
Drye''); National Association of Consumer Agency Administrators
(``NACAA''); Natural Products Association (``NPA''); NutriSystem,
Inc. (``NutriSystem''); James Petkun (``Petkun''); Product Partners,
LLC (``Product Partners''); Richard Pu (``Pu''); Jay Satz, Ph.D.
(Vice President of Program and Product Development, NutriSystem,
Inc.) (``Satz''); Senator Arlen Specter (``Specter''); Washington
Legal Foundation (``WLF''); and Word of Mouth Marketing Association
(``WOMMA''). With the exception of certain confidential materials
submitted by NutriSystem, the comments are available online at
(http://www.ftc.gov/os/comments/endorsementguides/index.shtm.)
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III. DISCUSSION OF COMMENTS RECEIVED IN RESPONSE TO REGULATORY REVIEW
NOTICE
A number of the comments specifically praised the current Guides
for striking an appropriate balance between protecting consumers and
allowing advertisers to communicate creatively and effectively to
potential customers.\4\ Several others also noted that the Guides are
beneficial and should be retained;\5\ one commenter stated that Guides
were needed even more today than when they were originally issued.\6\
One comment suggested that the current Guides are more restrictive than
necessary to protect consumers.\7\
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\4\ ANA, at 2, 6; AAAA/AAF, at 2; Specter, at 1; ERA/CRN, at 5-
6.
\5\ Petkun, at 1; NACAA, at 1; Attorneys General, at 1; Jenny
Craig, at 1; AHPA, at 3-5.
\6\ CBBB, at 2.
\7\ Kelley Drye, at 2.
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Most of the comments submitted in response to the January 2007
Federal Register notice, however, responded to specific questions the
Commission posed concerning the provisions of the current Guides that
address (1) the use of consumer endorsements reflecting experiences
exceeding those that consumers can generally expect to achieve with the
advertised product, or (2) the disclosure of material connections
between advertisers and endorsers. Those comments are discussed in Part
IV, below, in the context of the specific Guide provisions to which
they relate.
In addition, a few comments addressed other issues. For example,
several noted that advertisers have started using some new technologies
to reach consumers in recent years.\8\ Two suggested that the
Commission consider whether the Guides should be revised to deal with
new types of advertising (e.g., to include examples using email or the
Internet).\9\ Another noted that unlike the case with traditional
media, the marketer is not in complete control of the message when
certain of these new technologies are used; for example, in word-of-
mouth marketing, the marketer may initially share information with one
consumer, but subsequent exchanges between that consumer and others are
outside the marketer's control.\10\ This commenter pointed out that the
current Guides have one standard for both traditional advertising and
non-traditional (unmeasured) marketing, despite ``the vastly different
levels of control that can be exercised by marketers using embedded
advertising
[[Page 72377]]
versus word of mouth and non-traditional (unmeasured) media.''\11\
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\8\ Petkun, at 1-2; AHPA, at 6; WOMMA, at 4. See also Jenny
Craig, at 1 (suggesting that the Commission focus its review of the
Guides on how to contemporize them in light of new technologies and
marketing practices).
\9\ AHPA, at 6-7; Jenny Craig, at 1.
\10\ WOMMA, at 5.
\11\ Id. at 9.
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The Commission agrees that it would be useful to illustrate the
application of the Guides' long-established principles to new media.
Although these fields are still evolving, the Commission is proposing
to include in the Guides several new examples that address the issues
of advertiser and endorser liability and disclosure of material
connections in various high-tech contexts.\12\
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\12\ One comment said that the Guides should provide for a
private cause of action and recovery of attorneys' fees, so that the
private bar would have an incentive to bring legal actions on behalf
of consumers injured by noncompliant advertisers. Pu, at 1. As noted
above, the Guides merely provide insight into how the Commission
interprets existing laws, and do not, in and of themselves, create
substantive law.
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IV. SECTION-BY-SECTION DISCUSSION OF PROPOSED REVISIONS TO GUIDES,
COMMENTS RECEIVED IN RESPONSE TO JANUARY 2007 FEDERAL REGISTER NOTICE,
AND REQUESTS FOR ADDITIONAL COMMENT
The Commission has concluded that the Guides should be retained,
but that a number of revisions are appropriate. Many of the proposed
changes are simply clarifications or additional examples of the
principles embodied in the existing Guides. Others enunciate basic
principles that are not expressly set forth in the current Guides, but
have been established in Commission enforcement actions. Several
represent substantive changes from the current Guides, based upon
increased knowledge of how consumers view endorsements and taking into
consideration the comments submitted in response to the January 2007
Regulatory Review notice.
The Commission seeks comments on these proposed revisions, which
are discussed below by Section.\13\
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\13\ The Commission also intends to make a number of non-
substantive changes to improve syntax or to update examples to
reflect changes that have occurred over the past twenty-five years.
For instance, in Example 2 to Section 255.1, the ``executive
secretary'' is being changed to an ``administrative assistant'' and
the product in question is being updated from an ``electric
typewriter'' to a ``computer keyboard.'' Such changes are not
discussed below.
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A. Section 255.0--Definitions
The Guides currently begin with a definitions section, which the
Commission proposes to expand to include an introductory subsection
explaining the purpose of the Guides. This new Section 255.0(a) would
note that the Guides are administrative interpretations of laws
enforced by the Commission and provide the basis for voluntary
compliance with the law by advertisers and endorsers.\14\ It would also
indicate that, although the Guides set forth the general principles
that the Commission will apply in examining endorsements, the question
of whether a particular endorsement or testimonial is deceptive will
depend on the specific factual circumstances of the advertisement at
issue. Other Commission guides begin with similar statements.\15\
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\14\ Subsection (a), (c), and (d) of the current Guides would be
redesignated as subsections (c), (d) and (e), respectively.
\15\ See, e.g., Guides for Private Vocational and Distance
Education Schools, 16 C.F.R. Sec. 254.0(b); Guides for the Use of
Environmental Marketing Claims, 16 C.F.R. Sec. 260.1.
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Current Section 255.0(b) defines an endorsement as any advertising
message that consumers are likely to believe reflects the opinions,
beliefs, findings, or experience of a party other than the sponsoring
advertiser. The Commission proposes revising that section to clarify
that in determining whether statements in an ad constitute an
endorsement, it does not matter whether the statements made by an
endorser are identical to or different than those made by the
sponsoring advertiser. Similarly, the Commission proposes a minor
modification of Example 4 (deleting from the penultimate sentence the
reference to the views of the sponsoring advertiser) to make it clear
that the only relevant criterion in determining whether a statement is
an endorsement is whether consumers believe it reflects the endorser's
views.
Example 1 to Section 255.0 currently provides one example of an
endorsement and also illustrates the principle that an endorsement may
not be presented out of context or reworded so as to distort the
endorser's opinion. The Commission proposes to add a cross-reference to
Section 255.1(b), which states this principle explicitly.
The Commission proposes adding a new Example 6 to Section 255.0, to
illustrate that the determination of whether a speaker's statement is
an endorsement depends solely on whether consumers believe that it
represents the endorser's own view. Specifically, the new example
clarifies that whether the person making the statement is speaking from
a script, or giving the endorsement in his or her words, is irrelevant
to the determination.
The Commission also proposes adding a new Example 7 to Section
255.0, to illustrate that well-known persons can appear in advertising
without being deemed endorsers.
B. Section 255.1--General Considerations
Section 255.1 sets forth principles that apply to endorsements
generally (e.g., endorsements must reflect the honest opinions or
experience of the endorser, and may not convey any representation that
would be deceptive if made directly by the advertiser). The Commission
proposes one significant revision to this section of the Guides, the
addition of a new Section 255.1(d) explicitly recognizing two
principles that the Commission's law enforcement activities have
already made clear. The first is that advertisers are subject to
liability for false or unsubstantiated statements made through
endorsements, or for failing to disclose material connections between
themselves and their endorsers. The second is that endorsers may also
be subject to liability for their statements. The Commission has
brought law enforcement actions against both expert endorsers and well-
known personalities (i.e., celebrities) who have acted as endorsers.
E.g., FTC v. National Urological Group, Inc., No. 04-CV-3294-CAP, 2008
U.S. Dist. LEXIS 44145, at *24-25 (N.D. Ga. June 4, 2008) (order
granting FTC's motion for summary judgment finds expert liable for
deceptive endorsement); Snore Formula, Inc., 136 F.T.C. 214 (2003)
(consent order); James L. McElhaney, M.D, 116 F.T.C. 1137 (1993)
(consent order); Leroy Gordon Cooper, Jr., 94 F.T.C. 674 (1979)
(consent order); and Cooga Mooga, Inc., 92 F.T.C. 310 (1978) (consent
order). Two new examples illustrate situations in which the Commission
could impose liability on expert and celebrity endorsers; both of these
examples note that the advertiser is also liable for misrepresentations
made through the endorsement. A third new example illustrates the
potential liability of advertisers who use bloggers to promote their
products and of the bloggers themselves.
The Commission also proposes two minor revisions to Section
255.1(a). First, to make it clear that the Guides cover the
communication of both express and implied representations, the phrase
``may not convey any express or implied representation'' is being added
to the second sentence of that provision (which currently states that
endorsements may not contain any representations that would be
deceptive if made directly by the advertiser). Second, an additional
cross-reference is being added at the end of revised Section 255.1(a).
Currently, the only cross-reference is to an example in Section 255.3,
in which an endorsement by an expert testing organization is used
[[Page 72378]]
to illustrate the principle that ``a valid endorsement may constitute
all or part of an advertiser's substantiation.'' As revised, the cross-
references would refer to Sections 255.2(a) and (b) regarding the
substantiation of claims conveyed by consumer endorsements, discussed
below, as well as to Section 255.3.
C. Section 255.2--Consumer Endorsements
Section 255.2 of the Guides provides guidance specific to the use
of consumer endorsements, commonly referred to as testimonials. The
Commission proposes to add a new Section 255.2(a) to articulate several
fundamental principles that are not expressly set forth in the current
Guides, to modify the existing Section 255.2(a), and to delete the
existing Section 255.2(c).
1. New Section 255.2(a)
The Commission's proposed new Section 255.2(a) would state that an
advertisement employing endorsements by one or more consumers about the
performance of an advertised product or service will be interpreted as
a representation that the product or service is effective for the
purpose represented in the endorsement. Consumer endorsements convey
not only that the advertised product or service worked for the
consumers depicted in the advertisement, but also that it will work for
others. This is the natural implication of an advertiser's use of a
consumer endorsement, and this view is supported by the consumer
research conducted for the Commission. Specifically, in the Endorsement
Booklet Study, between 50.0% and 75.0% of the respondents who were
exposed to a promotional booklet with testimonials touting the
advertised supplement's use for breathing problems, low energy, and
pain said that the booklet claimed or implied that the product was
effective for reducing breathing problems, increasing energy levels,
and relieving chronic or persistent pain. (See Table 2b of the
Endorsement Booklet Study.)
New Section 255.2(a) also states that an advertiser who uses
consumer endorsements must possess and rely upon adequate
substantiation to support efficacy claims made through endorsements,
just as the advertiser would be required to do if it had made the
representation directly.\16\ It also notes that consumer endorsements
themselves do not constitute competent and reliable scientific
evidence; anecdotal evidence about the individual experience of
consumers is not sufficient to substantiate claims requiring scientific
evidence.\17\ Even if those experiences are genuine, they may be
attributable to a placebo effect or other factors unrelated to the
advertised product or service.\18\
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\16\ New Section 255.2(a) thus elaborates on the general
principle in current Section 255.1, which states that endorsements
may not contain representations that would be deceptive if made
directly by the advertiser.
An advertiser must have a ``reasonable basis'' for efficacy
claims. The Commission articulated its policy with respect to
advertising substantiation in the FTC Policy Statement Regarding
Advertising Substantiation, 48 Fed. Reg. 10,471 (1984), reprinted in
Thompson Medical Co., 104 F.T.C. 648, 839 (1984), aff'd, 791 F.2d
189 (D.C. Cir. 1986), cert. denied, 479 U.S. 1086 (1987). The
Commission's determination of what constitutes a reasonable basis
for objective product claims is determined by weighing a number of
factors, including: (1) the type and specificity of the claim; (2)
the type of product; (3) the consequences of a false claim; (4) the
benefits of a truthful claim; (5) the ease and cost of developing
substantiation for the claim; and (6) the level of substantiation
experts in the field believe is reasonable. Thompson Medical, 104
F.T.C. at 839-40; Pfizer, Inc., 81 F.T.C. 23, 64 (1972).
\17\ FTC v. QT, Inc., No. 07-1662, 2008 U.S. App. LEXIS 33, at
*6-7 (7th Cir. Jan. 3, 2008) (testimonials ``are not a form of
proof''); Removatron Int'l Corp., 111 F.T.C. 206, 302 (1988), aff'd,
Removatron Int'l Corp. v. FTC, 884 F.2d 1489 (1st Cir. 1989).
\18\ See FTC v. Pantron I Corp., 33 F.3d 1088 (9th Cir. 1994),
cert. denied, 514 U.S. 1083 (1995) (consumer satisfaction surveys
and studies demonstrating the placebo effect are insufficient to
meet ``competent and reliable scientific evidence'' standard); QT,
2008 U.S. App. LEXIS 33, at *6-7 (``A person who experiences a
reduction in pain after donning the bracelet may have enjoyed the
same reduction without it.'').
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2. Renumbered Section 255.2(b)
Current Section 255.2(a), which would be renumbered Section
255.2(b), presently provides that an advertisement employing an
endorsement reflecting the experience of an individual or a group of
consumers on a central or key attribute of the product or service will
be interpreted as representing that the endorser's experience is
representative of what consumers will generally achieve with the
advertised product in actual, albeit variable, conditions of use. The
newly available empirical evidence (as well as the Commission's
findings in several litigated cases\19\ ) supports the Guides' position
that consumers interpret advertisements containing endorsements as
representing that the results achieved by the endorsers are generally
representative of what new users can expect. In the Endorsement Booklet
Study, between 41.2% and 70.5% of respondents indicated that the
dietary supplement in question would reduce breathing problems,
increase energy levels, and relieve pain in at least half of the people
who try it. (See Table 3b of the Endorsement Booklet Study.)
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\19\ Brake Guard Prods., Inc., 125 F.T.C. 138, 244 (1998)
(testimonials used in advertising for aftermarket braking device
claimed that reduced stopping distances and wheel lockup ``were
typically experienced by consumers''); Cliffdale Assocs., Inc., 103
F.T.C. 110, 173 (1984) (testimonials touting fuel economy benefits
achieved from automotive engine attachment conveyed that these
experiences were typical); Porter & Dietsch, Inc., 90 F.T.C. 770,
872-73 (1977) (testimonials from consumers who had lost substantial
amounts of weight conveyed the message that extraordinarily large
weight losses were typical or ordinary), modified sub nom., Porter
Dietsch, Inc. v. FTC, 605 F.2d 294 (7th Cir. 1979) (sustaining
Commission's findings that representations made in advertising were
false, but modifying portions of remedial order).
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In the Second Endorsement Study, ads featuring individuals who
claimed certain specifically quantified benefits from having used the
advertised weight loss program, cholesterol lowering supplement, or
business opportunity (e.g., ``I am earning an extra $2,200 a month'')
conveyed to between 31.23% and 57.81% of respondents that at least half
of new users would achieve results similar to the endorsers featured in
the advertisements. (See Tables 2a and 5a of the Second Endorsement
Study).\20\ For example, 32.69% of consumers exposed to an ad in which
endorsers claimed to have lost between 48 and 72 pounds thought the ad
conveyed that at least half of new users would lose at least 48 pounds.
(See Table 2a of the Second Endorsement Study.)
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\20\ As discussed below, several commenters criticized various
aspects of the two staff research reports that the Commission placed
on the public record in January 2007. One asserted that the data
contained in those reports did not account for ``yeasaying,'' the
tendency of some consumers to answer questions affirmatively,
regardless of what an ad actually said. In fact, both surveys did
have test conditions that accounted for yeasaying and prior beliefs,
and the results of those conditions were included in the staff's
reports. However, in the interest of greater clarity, the Commission
is placing on the public record in connection with the Second
Endorsement Study new Tables 1a, 2a, 4a, and 5a, which expressly
account for the responses obtained for these conditions by adjusting
the data obtained from the other test cells.
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Nevertheless, the Commission believes that certain advertisements
employing testimonials may not convey that the endorser's experience is
representative of what consumers will generally achieve with the
advertised product or service. For example, if an advertisement for a
casino features a $100,000 slot machine winner, consumers likely
understand from the nature of gambling that the winner's experience is
not generally representative of those who use the casino's slot
machines. The Commission therefore proposes to qualify the currently
unequivocal language of renumbered Section 255.2(b) to state that ``an
advertisement employing an endorsement reflecting the experience of an
individual or a group of
[[Page 72379]]
consumers on a central or key attribute of the product or service will
likely be interpreted as representing that the endorser's experience is
representative of what consumers will generally achieve with the
advertised product in actual, albeit variable, conditions of use''
(emphasis added).
As currently written, renumbered Section 255.2(b) also provides
that in the event an advertiser does not have adequate substantiation
that the experience described by the endorser is representative of what
consumers will generally achieve, the advertiser can either: (1)
clearly and conspicuously disclose what the generally expected
performance would be in the depicted circumstances, or (2) disclose the
limited applicability of the endorser's experience to what consumers
may generally expect to achieve, i.e., that the depicted results are
not representative. The Commission has long been concerned about
potential deception arising from the use of the second category of
disclosures, which are often referred to as ``disclaimers of
typicality.''
In its 1975 Federal Register notice promulgating several sections
of the Guides in final form and republishing several others (including
this section) for comment, the Commission stated that consumers view
endorsements about product performance as conveying a typicality claim
under the depicted circumstances and that if the represented
performance was not typical, the ad should clearly and conspicuously
disclose what the typical or ordinary performance would be in the
depicted circumstances. 40 Fed. Reg. 22146, 22147 (May 21, 1975). Five
years later, when it adopted current Section 255.2(a), the Commission
stated that it strongly favored consumer endorsements depicting typical
experiences but recognized that endorsements depicting non-typical
experiences might not be deceptive if they were accompanied by adequate
disclosures. 45 Fed. Reg. 3870, 3871 (Jan. 18, 1980). The Commission
went on to say that ``[g]enerally, a disclaimer alone probably will not
be considered sufficient to dispel the representation that the
experience is typical, but . . . the Commission is not prepared to hold
that in every instance a bare disclaimer would be inadequate . . . .''
Id. Accordingly, although reliance on a disclaimer would not be a per
se violation of Section 5 of the FTC Act, the net effect of an
endorsement with a disclaimer would be ``studied to determine if the ad
has the capacity to deceive.'' Id. However, notwithstanding its concern
about advertisers attempting to use disclosures to disclaim typicality
messages conveyed by consumer endorsements, the Commission ultimately
decided to provide a safe harbor for such disclaimers.
Since that time, the Commission has brought a number of enforcement
actions against marketers for deceptive advertising containing consumer
endorsements. Many of these endorsements have been accompanied by
statements that purport to inform consumers that the experiences of the
featured endorsers are not representative of what consumers can expect.
The disclosures are often buried in fine print footnotes or flashed as
video superscripts too quickly for consumers to read them. Not only are
the disclosures far from clear and conspicuous, but usually they merely
say ``results not typical'' or ``results may vary'' or similar
statements that do little to inform consumers how rare or extreme the
featured results are.
The results of the staff's Endorsement Booklet Study and the Second
Endorsement Study further confirm that the concerns expressed by the
Commission in 1980 about advertisers attempting to use disclosures to
disclaim typicality messages conveyed by consumer endorsements were
well-founded. In the Endorsement Booklet Study, despite the presence of
strongly worded, highly prominent disclaimers of typicality, between
44.1% and 70.5% of respondents indicated that the dietary supplement in
question would reduce breathing problems, increase energy levels, and
relieve pain in at least half of the people who try it. (See Table 3b
of the Endorsement Booklet Study).
In the Second Endorsement Study, consumer testimonials communicated
to a substantial number of respondents that the results claimed by the
testimonialists were generally representative of the results that other
consumers could expect. Even with the disclosures ``Results not
typical'' and ``These testimonials are based on the experiences of a
few people. You are not likely to have similar results,'' between
22.58% and 50.75% of respondents thought that at least half of new
users would achieve results similar to those experienced by the
endorsers featured in the advertisements. (See Tables 2 and 5 of the
Second Endorsement Study.)\21\
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\21\ The 22.58% figure is the percentage of respondents who,
after seeing testimonialists tout 48-72 pound losses in an ad with
the ``Experiences of a few'' disclaimer, said that at least half of
new users would lose at least 48 pounds. (See Table 2.) The 50.75%
figure is the percentage who, after seeing testimonialists say their
cholesterol dropped 30-90 points, said that at least half of new
users of the dietary supplement would experience drops of at least
30 points, despite a ``Results not typical'' disclaimer. (See Table
5.) Subtracting from these figures the results of their respective
``no numbers'' conditions (3.13% and 0%)--in which consumers saw ads
featuring multiple testimonials that touted the product but did not
provide any numerical statement of the results achieved by the
testimonialists--yields adjusted figures of 19.45% and 50.75%. As
noted below, these ``no numbers'' conditions capture the effects of
both yeasaying and prior beliefs.
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By contrast, the disclosure of actual expected results
significantly reduced the communication that the experiences depicted
are generally representative. (See Table 2 of the Second Endorsement
Study.) This was particularly true when there was a large difference
between the amounts claimed by the testimonialists and the disclosed
actual expected results. Of the consumers exposed to an ad in which
endorsers claimed to have lost between 48 and 72 pounds--but which
clearly disclosed that the average user loses 10 pounds--only 3.23%
thought the ad conveyed that at least half of new users would lose at
least 48 pounds. This figure is almost identical to the 3.13% who--
after seeing an ad with no numbers--thought that the average user would
lose at least 48 pounds.
In light of these studies and its own history of law enforcement
challenges to misleading testimonials, the Commission asked in January
2007 for comment on: (1) the potential effects on advertisers and
consumers if the Guides called for clear and conspicuous disclosure of
generally expected results whenever the testimonial is not generally
representative of what consumers can generally achieve with the
advertised product--i.e., if disclosing the limited applicability of
the depicted results no longer provided a ``safe harbor'' for the use
of testimonials relating non-typical experiences; and (2) what
information, other than what is required to substantiate an efficacy or
performance claim, would be required for an advertiser to determine
generally expected results, and how difficult it would be for
advertisers to make this determination. Most of the comments the
Commission received focused specifically on these issues.
a. Comments supporting revision of the Guides' provisions concerning
the disclaimer of typicality
Several comments stated that advertisers should not be able to use
nonrepresentative testimonials and merely accompany them with
disclaimers stating that those results were not typical.\22\ One said
that the
[[Page 72380]]
current Guides invite weight-loss testimonials that advertisers know to
be false and deceptive, simply by pairing the claim with a ``results
not typical'' disclaimer.\23\
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\22\ Calkins, at 1; CBBB, at 2-3; Adams, at 1.
\23\ Calkins, at 1.
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Two other commenters stated that the Guides should require that
endorsements reflect typical consumer experience.\24\ One of them
opined that even requiring that atypical testimonials include
disclosure of typical results would not eliminate deception.\25\ The
other stated that if the Guides do continue to permit the use of
nonrepresentative testimonials, the disclaimer of typicality should
appear through the entire testimonial and be accompanied by disclosure
of typical results.\26\ Another commenter stated that consumer
testimonials should be accompanied by a clear and conspicuous
disclosure describing the typical results obtained, or at least that
the Guides should ensure that the ``results not typical'' disclosure
actually changes the net impression of the advertisement.\27\
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\24\ NACAA, at 2; Attorneys General, at 3.
\25\ Attorneys General, at 3.
\26\ NACAA, at 2.
\27\ CBBB, at 3 (noting that the BBBs receive thousands of
complaints against companies that rely heavily on the use of
nonrepresentative consumer testimonials, and that, in the BBB's
experience, consumers frequently believe they will achieve similar
results despite the presence of ``results not typical''
disclaimers).
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b. Comments opposing revision of the Guide provisions concerning the
disclaimer of typicality
Other commenters stated that the Guides should continue to allow
nonrepresentative testimonials to be accompanied by disclaimers of
typicality, and should not require disclosure of generally expected
results. Virtually all of the comments urging the Commission to retain
Section 255.2(a) of the Guides in its current form made one or more of
the following arguments:
i. ``Aspirational'' testimonials serve an important purpose, and both
advertisers and consumers would be adversely affected if disclosure of
generally expected results were required.
(a) ``Aspirational'' testimonials motivate consumers without
misleading them.
Several of the commenters asserted that in the weight-loss field,
``aspirational'' or ``inspirational'' testimonials that truthfully
relate the experiences of consumers who have successfully lost weight
using the advertised product or program are important advertising
tools.\28\ Even though those testimonials might not reflect what
consumers typically experience with that particular product or program,
they remind customers of their own fitness goals and motivate them to
try to achieve similar results by starting responsible weight loss
programs.\29\
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\28\ Product Partners, at 2-3, 5; Jenny Craig, at 2; CORE, at 3;
NutriSystem, at 26.
\29\ Product Partners, at 2, 5; Jenny Craig, at 2; CORE, at 3.
---------------------------------------------------------------------------
According to two commenters who stressed the importance of
``aspirational'' testimonials in weight-loss advertising, consumers
understand that the weight loss achieved by the testimonialist does not
necessarily reflect the experience they will have using the product or
program.\30\ As one put it, the ``variables that affect the rate and
extent to which a person can lose weight are so varied and well-known
to the viewer . . . that it is difficult to believe that consumers are
not capable of understanding that their result may be different from
those that are shown in advertising depending on multiple factors, but
that success nonetheless, is absolutely achievable.''\31\ Thus, a 150-
pound person who sees a testimonial from a woman who lost 100 pounds
knows she will not lose 100 pounds but that she could lose 20-30
pounds; conversely, a 400 pound person who sees the same ad ``could
equally see that there is hope for them to lose over 200 pounds.''\32\
---------------------------------------------------------------------------
\30\ Product Partners, at 3; Jenny Craig, at 2. However, neither
Product Partners nor Jenny Craig provided quantitative evidence
supporting their view that consumers are not misled by
``aspirational'' testimonials.
\31\ Product Partners, at 3.
\32\ Id. at 3.
---------------------------------------------------------------------------
The Commission agrees that ``aspirational'' testimonials are
commonly used in the marketing of weight-loss products and programs,
and that they may induce consumers to purchase or enroll in these
products or programs.\33\ However, the fact that a testimonial is
truthful or is being used to promote a product or program that
advocates responsible lifestyle changes (i.e., reduced caloric intake
and increased caloric expenditure) does not necessarily prevent it from
conveying a misleading message to consumers. If consumers are deciding
to purchase a product or enroll in a program based on advertising that
conveys to them that they are likely to achieve results similar to the
testimonialists, and the advertiser lacks substantiation for that
representation, then those consumers are being misled.
---------------------------------------------------------------------------
\33\ For a discussion of consumer testimonials and disclaimers
in the context of weight-loss advertising, see Weight-Loss
Advertising: An Analysis of Current Trends, A Federal Trade
Commission Staff Report (Sept. 2002) (available at www.ftc.gov/bcp/reports/weightloss.pdf). The staff's report highlights the troubling
use of consumer testimonials claiming extreme weight loss in weight-
loss advertising, a particular concern given the apparent prevalence
of weight-loss fraud.
In October 2007, the Commission issued a report on consumer
fraud in the United States. The survey found that more consumers
were victims of fraudulent weight-loss products than of any of the
other specific frauds covered by the survey. For purposes of the
study, weight-loss products included nonprescription drugs, dietary
supplements, skin patches, creams, wraps, or earrings that were
promoted as making it easy for consumers to lose a substantial
amount of weight or allowing them to lose weight without diet or
exercise. Federal Trade Commission, Consumer Fraud in the United
States: The Second FTC Survey at 15, S-1 (Oct. 2007 staff report)
(available at www.ftc.gov/opa/2007/10/fraud.pdf).
---------------------------------------------------------------------------
Moreover, as the Commission has stated, ``An interpretation [of an
advertisement] may be reasonable even though it is not shared by a
majority of consumers in the relevant class, or by particularly
sophisticated consumers. A material practice that misleads a
significant minority of reasonable consumers is deceptive.''\34\ As
with all advertising, the fundamental question to be answered is
whether, taken in its entirety,\35\ an advertisement that uses
testimonials is likely to convey to reasonable consumers a message that
is false or for which the advertiser does not have substantiation. The
substantiation requirements for advertisements that convey performance
claims are the same, whether the claim is made with or without the use
of testimonials. Advertisers cannot use testimonials to convey claims
they could not make through other means.
---------------------------------------------------------------------------
\34\ FTC Policy Statement on Deception, appended to Cliffdale
Associates, Inc., 103 F.T.C. 110, 174, 177 n.20 (1984) (citation
omitted) (hereafter ``Deception Policy Statement'').
\35\ ``[I]n advertising the Commission will examine `the entire
mosaic, rather than each tile separately.''' Id. at 179 (quoting FTC
v. Sterling Drug, 317 F.2d 669, 674 (2d Cir. 1963)).
---------------------------------------------------------------------------
(b) Requiring disclosure of the results consumers generally achieve
with the advertised product or program would impose a substantial
burden on advertisers.
Several commenters stated that determining generally representative
results would be very difficult for certain advertisers. According to
some commenters, in the weight-loss field, for example, determining
generally representative results would necessitate computations across
a diverse customer base (men, women, young, old, obese, and non-obese),
a difficult and costly endeavor that would require ongoing monitoring
of customers' progress and
[[Page 72381]]
frequent updating of calculations.\36\ One commenter stated that it was
impossible for an advertiser whose weight-loss program promoted both
exercise and diet to know what is typical.\37\ Another stated that when
the effectiveness of the products depends on variables associated with
individual use, typicality either cannot be shown or shown only with
great difficulty so that advertisers in these businesses would not be
able to use testimonials, even though advertisers in other fields would
be able to continue doing so.\38\
---------------------------------------------------------------------------
\36\ NutriSystem, at 26-27; CORE, at 3 (noting that there is no
``average'' consumer); Satz at 2, 11; Kelley Drye, at 17 (practical
result of such a requirement would be de facto prohibition on use of
testimonials).
\37\ Product Partners, at 5.
\38\ ERA/CRN, at 10 and 12 (marketers of dietary supplements
would face substantial hurdles in substantiating typicality of
health or safety claims made by consumer testimonials).
---------------------------------------------------------------------------
One commenter suggested that a disclosure requirement would
incorrectly assume that all types of claims can be measured by
generally expected results, even though preference claims or personal
experience claims for certain products--such as video games, movies,
and restaurants--are not susceptible to such measurements.\39\ If the
Guides called for non-representative testimonials to be accompanied by
disclosure of generally expected results, these advertisers would have
to have studies showing the likeability of their products before they
could use endorsements; as a result, many would stop using
testimonials.\40\ This commenter also opined that such a change would
mean that advertisements using testimonials would be subject to
stricter substantiation requirements than advertisements making the
same claim without the use of testimonials.\41\
---------------------------------------------------------------------------
\39\ AAAA/AAF, at 11.
\40\ Id. at 11-12 (also noting that new requirements might cause
other advertisers to stop using testimonials, too). See also ANA, at
10 (advertisers would not be able to use testimonials to make claims
about products that rely on subjective variables, because they would
not be able to adequately determine typical experience); AHPA, at
10-11 (some advertisers might cease using endorsements if unable or
unwilling to afford the cost of measuring generally expected
performance).
\41\ AAF/AAAA, at 12.
---------------------------------------------------------------------------
Several commenters also suggested that requiring disclosure of
generally expected results could create competitive disadvantages for
certain businesses, thereby upsetting the level playing field that
exists under the current Guides for, among others, new businesses
attempting to compete with established enterprises.\42\ Others stated
that the burden of any new disclosure requirements would, ironically,
fall on marketers of responsible weight loss programs (those complying
with government recommendations of decreased caloric intake and
increased physical activity) because they would expend resources to
comply with the requirements, while marketers of pills and supplements
with no scientific support would ignore those requirements or
manipulate their data to produce fictitious averages.\43\
---------------------------------------------------------------------------
\42\ ERA/CRN, at 9-12 (new advertisers would be placed on
unequal footing with established competitors because they would have
to establish baseline results before they would be able to determine
typicality; also, advertisers who have evidence of a product's
efficacy but not of typicality would not be able to use
testimonials, even though a competitor who has typicality
substantiation could). See also AHPA, at 10-11 (requiring disclosure
of generally expected results would increase costs for advertisers
who do not already have substantiation for claims made in
endorsements; as a result, it might reduce use of endorsements if
advertisers are unwilling or unable to pay the cost of measuring
generally expected results).
\43\ NutriSystem, at 27-28; Freedomworks, at 2-3 (``one-size-
fits-all disclaimer'' would create significant burdens for
legitimate advertisers who would abide by the Guides, while
unscrupulous operators would disregard them); Satz, at 10
(advertisers who are already making unsubstantiated weight-loss
claims will not comply with Guide provisions calling for disclosure
of additional information).
---------------------------------------------------------------------------
At the outset, the Commission notes that such a change in the
Guides would not mean that advertising using testimonials would be
subject to stricter legal standards than other advertising--to the
contrary, it would merely eliminate a safe harbor that has allowed
advertisers to avoid the general requirement that they be able to
substantiate all material claims conveyed by their advertising to
reasonable consumers.
The Commission does recognize that a revision of renumbered Section
255.2(b) calling for non-typical testimonials to be accompanied by
disclosure of the results consumers generally achieve with the
advertised product would increase costs for those advertisers who have
not previously tracked consumers' experiences with their products, and
could present an impediment to the use of such testimonials by certain
advertisers. The commenters, however, may be overestimating those
costs. In the vast majority of cases--particularly those for legitimate
products and programs whose efficacy has already been demonstrated by
competent and reliable scientific evidence--that information is likely
to be present.
The Commission also believes that, for most products, it is
possible to devise a methodologically sound means of determining the
generally expected results.\44\ Moreover, other alternatives may be
available. For example, an advertiser may use testimonials from a
defined subset of users for which it can determine the typical
results.\45\ Or, given the Commission's proposal to revise the Guides
so that they no longer provide unequivocally that testimonials will
convey typicality claims, the advertiser could write its ad in such a
way that consumers would not take away the message that they can expect
to achieve the same results as the testimonialist.\46\
---------------------------------------------------------------------------
\44\ As noted below, the Commission is specifically seeking
comment on whether there are product categories for which such a
change in the Guides would prevent advertisers from using
endorsements in advertising even though the advertiser believes that
the endorsers' experiences are or likely are generally
representative of what consumers can expect to achieve with the
product.
\45\ For example, an advertisement depicting the atypical
results of women who used a program for a year could clearly and
conspicuously disclose the average results of women who remained in
the program for a year.
\46\ The Commission is proposing to include such an example in
the revised Guides. See Section 255.2, Example 4, below.
---------------------------------------------------------------------------
Moreover, the Commission does not assume that the use of
testimonials necessarily gives rise to typicality messages, and thus to
a need for disclosures, regardless of the nature of the product.
Advertisements that use testimonials to promote products for which
consumers' reactions are inherently subjective and their endorsements
thus merely statements of personal opinion (e.g., restaurants or games)
are less likely to convey typicality messages than ads using
testimonials to make objective, quantifiable claims (e.g., pounds lost,
money saved).\47\ Indeed, Section 255.2(a) of the Guides speaks of
``what consumers will generally achieve with the advertised product in
actual, albeit variable, conditions of use.''\48\ The concept of using
a product to achieve certain results implies a factual scenario very
different from testimonials expressing opinions about a particular book
or movie. Accordingly, unless an advertisement made a claim such as
``preferred 2-1 over the best-selling video game,'' the advertiser
would not
[[Page 72382]]
need a likeability study before using endorsements in which consumers
stated how much they enjoyed the game.\49\
---------------------------------------------------------------------------
\47\ See Deception Policy Statement, 103 F.T.C. at 181
(``Certain practices . . . are unlikely to deceive consumers acting
reasonably. Thus, the Commission generally will not bring
advertising cases based on subjective claims (taste, feel,
appearance, smell) or on correctly stated opinion claims if
consumers understand the source and limitations of the opinion.'')
(footnote omitted).
\48\ When the Commission first proposed Section 255.2 in 1975,
it noted that Section 255.2(a) ``recites the general principle that
endorsements reflecting the experience of an individual consumer
will be interpreted as representing the typical performance of the
product under like circumstances.'' 40 Fed. Reg. at 22147 (emphasis
added).
\49\ If there were a financial or other relationship between the
advertiser and the endorser that would affect the credibility of the
endorsement, that relationship would have to be disclosed under
Section 255.5 of the Guides.
---------------------------------------------------------------------------
Although requiring disclosure of generally expected results might
impede the ability of newly established companies to use testimonials,
such an outcome would not necessarily be inappropriate. Businesses are
entitled to compete based on truthful, nonmisleading advertising
claims, but they are not entitled to use techniques that mislead
consumers. If a company does not have adequate substantiation for an ad
that said ``you will lose 20 pounds in 10 weeks using our product,'' it
cannot have a testimonialist convey the same message in an
advertisement that merely includes a small disclaimer that says
``results not typical.'' Until such time as it has an adequate data to
determine what results consumers can expect from its product, a company
might have to tout other aspects of its program (e.g., that it provides
easy-to-follow menus with inexpensive, low-calorie, pre-made food).
Moreover, it is likely that in most instances, the evidence
substantiating the efficacy claim will provide sufficiently meaningful
information to establish the parameters of the generally expected
results. The Commission is also mindful that marketers of unproven,
``miracle in a bottle'' weight-loss products might either ignore
revised Guides or fabricate exaggerated data for use in disclosures
accompanying their testimonials, thereby putting marketers of
legitimate weight-loss programs at a competitive disadvantage.
Advertising by these marketers would likely attract the Commission's
attention, however, prompting enforcement actions to enjoin these
practices. Moreover, as a matter of policy, this argument could not
justify allowing a safe harbor for claims the Commission had determined
were deceptive. If consumers are being misled by the widespread use of
inadequately qualified, non-typical testimonials, the fact that some
scofflaws will continue trying to defraud consumers does not outweigh
the considerations in favor of revising the Guides.
(c) Even if advertisers could determine the results consumers
generally achieve with the advertised product or program, disclosing
those results would confuse consumers.
Several commenters asserted that even if advertisers of weight-loss
programs attempted to comply with a new requirement to disclose
generally expected results, disclosure of the resulting ``average''
weight loss results would not only be confusing to consumers--because
of the amount of information advertisers would have to provide in order
to enable them to interpret those averages--but could also discourage
them from even starting a weight-loss program that might be the first
step to a healthier lifestyle.\50\
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\50\ CORE, at 3-4 (averages are inherently misleading; consumers
may be discouraged from doing anything about their weight); Satz, at
10-11 (averages would be misleading and discouraging); Product
Partners, at 4 (a consumer who needed to lose 75 pounds might not
bother starting a weight-loss program if ads for that program
disclosed that the average consumer lost only 30 pounds). See also
NutriSystem, at 26-27 (averages would not be useful because
consumers' needs and objectives are so disparate); CORE, at 3
(companies would have to interpret so much data to accurately
interpret averages that FTC's efforts to make claims easy to
understand would be undermined); Jenny Craig, at 2 (consumers will
be deluged with confusing data of limited utility).
---------------------------------------------------------------------------
The commenters did not submit any empirical evidence supporting
their contentions that disclosure of generally expected results would
be confusing to consumers, and would even deter them from starting a
new weight loss program. Absent such evidence, the Commission doubts
that disclosure of average weight-loss results--whether presented
separately by gender or simply as a single figure\51\--would be less
confusing to consumers than the information they currently receive:
data from statistical outliers with no indication as to what most
consumers achieve.\52\ It may also be that insofar as the current
Guides provide no incentive for a company to track and analyze
consumers' success (or lack thereof) with its product or program, they
actually decrease the amount of useful information that could be made
available to consumers.
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\51\ For example, a disclosure might state ``the average man
loses 2 pounds per week on our program; the average woman loses 1
pound per week'' or ``the average person loses between 1 and 2
pounds per week.''
\52\ The Commission notes in this regard that consumers did not
appear to be confused by disclosure of average weight loss results
in the Second Endorsement Study.
---------------------------------------------------------------------------
Turning to the commenters' contention that such a change in the
Guides would discourage consumers from even attempting to lose weight,
the Commission notes two points. First, no commenters submitted
empirical evidence that ``aspirational'' testimonials actually benefit
consumers. Indeed, it seems just as likely that consumers induced into
buying a weight-loss product or enrolling in a program based on what
are, in effect, statistical outliers, may be more easily frustrated by
their lack of comparable success--and give up sooner--than consumers
who have realistic expectations based on accurate information. Second,
although the commenters simply assume that advertising using non-
typical testimonials would not be ``aspirational'' if the ads disclosed
the generally expected results, there is no apparent reason why
consumers might not think they can do better than the average. For
example, an advertisement that features highly successful
testimonialists but discloses the results consumers generally achieve
could provide positive motivation to consumers by conveying to them
that they can expect to lose about 30 pounds on that program over six
months, but that if they are conscientious and stay on the program
longer than the average consumer, they might even lose 75 pounds--like
the testimonialist.
ii. Rather than change the Guides, the FTC should continue bringing law
enforcement actions to stop deceptive advertising using testimonials.
Alternatively, the FTC should exempt advertisers of proven weight-loss
products and programs from having to disclose generally expected
results when they use nonrepresentative testimonials.
A number of commenters stated that the Commission has successfully
used post-market law enforcement actions to address deceptive
advertising, and should continue to do so, rather than revise the
Guides to impose disclosure requirements that affect all advertisers
and may chill dissemination of helpful information.\53\ One
specifically noted that in the last five years, the FTC has created an
enforcement climate (including its identification of ``Red Flag''
claims and issuance in January 2007 of four cases challenging allegedly
deceptive weight-loss claims) that should provide a powerful deterrent
against deceptive weight-loss advertising.\54\ Another urged the
[[Page 72383]]
Commission to continue using its Red Flags guide and other means to
pursue deceptive weight-loss advertising, rather than change the
Guides.\55\ One noted that the Commission has filed comments with the
FDA stressing both the value of commercial speech that gives consumers
access to useful information and the advantages of the Commission's
post-market law enforcement approach over the use of pre-market
regulation of commercial speech.\56\
Several of these commenters also asserted that there are important
differences between weight-loss products and programs that are based on
recognized principles of reduced calorie consumption and increased
energy expenditure, on the one hand, and unsubstantiated ``miracle in a
bottle'' products that are not based on science, on the other, and that
if the Commission does decide to revise Section 255.2(a)
(notwithstanding their arguments to the contrary), it should
distinguish between the two.\57\ According to these commenters, weight-
loss programs based on reduced caloric intake and increased energy
expenditure present no risk to consumers, nor does advertising for
these programs that contains truthful testimonials.\58\ Accordingly,
these commenters urge, if the Commission does revise the Guides to
require disclosure of typical results, it should exempt efficacious
meal replacement programs that conform to government recommendations
for responsible weight loss.\59\
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\53\ Product Partners, at 2; Jenny Craig, at 2-3; ERA/CRN, at 6-
7; AAF/AAAA, at 5-8 (noting also enforcement of the principles
embodied in the Guides by the States and by private litigants, as
well as industry self-regulatory programs, and suggesting that
revision of the Guides would require self-regulatory entities to
revise their own standards); ANA, at 7 (noting enforcement actions
by FTC and other authorities challenging deceptive testimonials);
CORE, at 4-5; Satz, at 8-10. See also Specter, at 2; Freedomworks,
at 1-3; NutriSystem at 15, 29 (urging Commission not to subject
marketers of weight-loss products and programs to additional
disclosure requirements).
\54\ NutriSystem, at 17-19. The staff's 2003 ``Red Flags'' guide
identified seven common weight-loss claims made for products
available over-the-counter (including nonprescription drugs, dietary
supplements, creams, wraps, devices, and patches) that were
scientifically infeasible at that time, and that remain
scientifically infeasible. The guide is an educational brochure
intended to assist the media in identifying deceptive weight-loss
claims prior to publication.
\55\ Jenny Craig, at 2.
\56\ NutriSystem, at 8-9, 11-16 and Exhibit A.
\57\ Satz, at 2-3 (the real problem is deceptive testimonials by
purveyors of fad diet pills and supplements); CORE at 2;
NutriSystem, at 30-31.
\58\ CORE, at 4; NutriSystem, at 28-31; Satz, at 9.
\59\ Satz, at 3; NutriSystem, at 30-31 (FTC should exempt
advertisers who do not make ``Red Flag'' claims from disclosure
requirements); Specter, at 2 (if Guides are revised, FTC should
avoid placing burdensome restrictions on useful products); Satz, at
12.
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Contrary to the views expressed by several commenters, revising the
Guides to state that non-typical testimonials should be accompanied by
clear and conspicuous disclosure of generally expected results would
not represent a departure from the agency's traditional use of post-
market law enforcement actions. As noted above, the Guides merely set
forth the general principles that the Commission will apply in
examining endorsements within the confines of its traditional Section 5
authority; they do not provide an independent source of legal
authority. Thus, even if the Commission were to revise the Guides with
respect to the use of non-typical testimonials 255.2(a), it would
continue to enforce Section 5 by means of post-market law enforcement
actions, with the question in each case being whether a particular
advertisement conveyed a false or unsubstantiated message to consumers
in violation of Section 5. Nor is there any reason to expect that the
Red Flags guides would not continue to be used in evaluating cases for
investigation and enforcement action.
Finally, it would not be appropriate to exempt the marketers of
certain kinds of weight- loss products and programs from Section
255.2(a) of the Guides. As noted above, the purpose of the Guides is to
assist businesses in conforming their advertising to the requirements
of Section 5 of the FTC Act. Consumers can be deceived by an
advertisement even for a ``legitimate'' weight-loss program, if the ad
conveys that the testimonialist's experience is representative of what
consumers can generally expect, and the advertiser cannot substantiate
that claim.
iii. The Commission's consumer survey evidence does not provide a
reliable basis for such a change in the Guides.
A number of commenters asserted that the staff's two consumer
research reports do not provide a reliable basis for the potential
revision about which the Commission inquired. Some comments simply
raised concerns about specific elements of the design or analysis of
the studies; one provided a report summarizing the proceedings of two
focus groups it had sponsored; and another included two reports by a
marketing professor raising a number of issues concerning the studies.
Specifically, some of the commenters suggested that the design of
the studies (e.g., testing only four print ads, three of which were for
dietary supplements or weight-loss programs) and the demographic
breakdown of the consumers who participated (80% of the respondents in
the first study were over age 60) was such that their results cannot be
extrapolated to other media or products.\60\ Others questioned the
statistical power of the studies, and asked the Commission to submit
them to outside experts for review to determine whether they have
utility in the Commission's review of the Guides;\61\ suggested that
the studies did not discern what the language contained in the ads
actually conveyed to consumers, but only what consumers remembered
after having previously read the ads;\62\ or suggested that the claims
used in both surveys were the kind that the Commission has warned
consumers to be suspicious about--i.e., touting ``secret ingredients''
and promising ``amazing results''--rather than more moderated and
scientifically supported testimonials, and that somewhat older
respondents in the Endorsement Booklet Study might not have access to
information on the Internet that can help consumers in choosing
healthcare products.\63\
---------------------------------------------------------------------------
\60\ ANA, at 8; AAAA/AAF, at 12-15.
\61\ AHPA, at 7-10.
\62\ WLF, at 1, 7.
\63\ NPA, at 2-3.
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The Commission acknowledges that the staff's research did not
attempt to determine what messages consumers take away from
testimonials and disclaimers in all media and for all products. The
Commission is not aware of any reason to expect that the results would
be different with other media or products, however; nor did the
commenters provide any empirical evidence supporting that
proposition.\64\ Furthermore, with respect to the statistical power of
the Endorsement Booklet Study, it is correct that the treatment cells
used in that study were smaller than those used in the Second
Endorsement Study. However, the communication of typicality was so high
in all of the cells in the Endorsement Booklet Study that it is
reasonable to conclude that the disclaimers were having no practical
effect. Similarly, although the respondents in the Endorsement Booklet
Study were somewhat older than the average population (because of the
intended audience for the advertising at issue in the law enforcement
investigation that prompted this research), the results are consistent
with those seen in the Second Endorsement study and thus support those
conclusions.
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\64\ Indeed, insofar as consumers are able to control how long
they view a print ad--unlike, for example, a television commercial--
there is some reason to believe they would be more likely to notice
and read ``results not typical'' disclaimers in print ads than in
other media.
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According to the commenter that sponsored its own focus groups, the
FTC's studies do not adequately illustrate the complexity of consumer
perception and understanding of testimonials.\65\ In contrast, this
commenter stated, the focus groups showed that consumers understand
that testimonials relate individual experiences of satisfied customers
[[Page 72384]]
(often, ``best case'' results), are inherently skeptical of
testimonial-based advertising, and do not expect that they would get
the same results as the testimonialists.\66\ This commenter further
said that the focus group discussions showed that, given consumers'
understanding of the limited applicability of testimonials, nothing
more than a ``results not typical'' disclaimer is needed.\67\
---------------------------------------------------------------------------
\65\ Kelley Drye, at 2, 15-16.
\66\ Id. at 7-10. A majority of the focus group members also
expressed the belief that consumer testimonialists generally receive
some compensation for their endorsement, even though the Guides
presume otherwise (i.e., the Guides require disclosure of
compensation when it is paid). Id. at 13-14.
\67\ Id. at 10-13.
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The Commission notes that the process by which consumers view (and
discuss) advertising in a focus group is very different from how they
ordinarily experience it.\68\ Focus groups are very dependent on group
dynamics, and one or two participants can dominate the discussion and
even influence other participants.\69\ Accordingly, the Commission
believes that general impressions gained from focus group discussions
are not as informative as a well-designed copy test involving hundreds
of consumers.
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\68\ Here, the focus group participants reviewed the ad they
were given, wrote their reactions, thoughts, and questions down on a
pad, and then engaged in a lengthy, guided discussion with the focus
group moderator. StrategyOne, Testimonial Advertising Focus Group
Research, at 16-17 (attached to Kelley Drye comment).
\69\ See Thompson Medical Co., Inc., 104 F.T.C. 648, 835 n.82
(1984), aff'd, 791 F.2d 189 (D.C. Cir. 1986), cert. denied, 479 U.S.
1086 (1987) (``Because focus group studies are conducted with very
few respondents obtained through nonprobability samples, and because
the interviews are conducted in an unstructured group format, it is
difficult to draw generalizable conclusions from them. Indeed it is
not unusual to obtain conflicting results from focus groups.''). See
also A.B. Blankenship & George Edward Breen, State of the Art
Marketing Research 227 (1993) (``[F]ocus group findings and ideas
are not projectable. It would be a mistake to assume that what two
or three focus groups say is true of all similar people in the
market. The focus group can guide and `focus' further research, but
that is all it can do.'').
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Finally, the issues raised by marketing professor Thomas Maronick,
Ph.D., on behalf of ERA/CRN\70\ included: (1) whether the questions
used to qualify respondents for participation in the study (``screener
questions'') sensitized them to the issues in the study, thereby
potentially affecting their responses; (2) whether the age distribution
of the respondents in the Second Endorsement Study suggests that the
marketing firm did not follow instructions; (3) whether the
instructions given to respondents when they were shown the ads used in
the test caused them to read the ads more carefully than they
ordinarily would have, thereby increasing the probability of seeing the
performance claims; (4) that the statistics reported in the studies
were not offset for ``yeasaying'' (i.e., the tendency for some
consumers to answer affirmatively to a question even when the ad
contained no information related to the question); and (5) that if the
consumers who answered ``about half'' to a question probing the
communication of typicality were counted as not regarding the
testimonial claims as typical, there would not be a statistically
significant difference between the proportion of consumers who took a
typicality claim and those who did not for the business opportunity and
dietary supplement advertisements.\71\ Based on these reports, this
commenter asserted, the studies cannot be relied on to measure what
messages consumers take from the ads tested or the effectiveness of
disclosures.\72\
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\70\ ERA/CRN, at 14-15 and Appendices 2 and 3 (submitting
reports of Thomas J. Maronick, Ph.D.). See also Product Partners, at
5 (agreeing with Dr. Maronick's reports).
\71\ ERA/CRN, at Attachments 2 and 3.
\72\ Id. at 14.
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With respect to Dr. Maronick's first concern, the Commission notes
that screening is a universal and necessary part of copy test research,
because it is important to test consumers who might potentially buy
such a product or service. Although it might have been desirable to
have included in the Second Endorsement Study ``clutter'' questions
asking consumers about product categories other than those that were
the subject of the advertisements used in the research, there is no
reason to believe that the short advance warning of the general product
category led to biased interpretations of testimonial claims.
Second, the fact that respondents' ages were not evenly distributed
across the spectrum in the Second Endorsement Study actually shows that
the individuals conducting the screening were following instructions:
they had been instructed to obtain specific percentages of respondents
in the 18-44 years and 45+ groups for each of the product categories in
the study.\73\
---------------------------------------------------------------------------
\73\ See Second Endorsement Study, at 4 (separate age and gender
quotas established for each of the three products).
---------------------------------------------------------------------------
Third, consumer surveys vary in terms of how many times respondents
are allowed to view the ad in question, and what the interviewers say
to them when they show them the ads. Sometimes, consumers are shown an
ad only once and instructed to look at it as they would in a magazine
or newspaper. Consumers often see advertisements more than once,
however, in the real world. In the Second Endorsement Study, consumers
were told to read the advertisement ``carefully,'' and then, after only
being asked the name of the product being advertised, were shown the ad
a second time, told to look at it carefully, and then asked additional
questions after the ad had been removed from view. To the extent these
procedures might have caused respondents to study the ad more carefully
than they ordinarily would, and thus increased the probability of
taking away messages of efficacy and typicality, they should also have
increased the probability that respondents would see the tested
disclaimers. Accordingly, the procedure used in this study actually
confirms the data showing that most of the disclaimers did not have an
appreciable impact on consumer take-away.
Fourth, with respect to ``yeasaying,'' Dr. Maronick counted as
``yeasayers'' both consumers who replied that the ad said something
when it did not, and respondents who said the ad did not say something
when it in fact did. In fact, the latter category does not constitute
bias, but merely reflects that some respondents did not see a component
of the ad and accurately reported that fact.\74\
---------------------------------------------------------------------------
\74\ Dr. Maronick noted that some respondents in the Endorsement
Booklet Study reported that they had not seen any disclaimers in the
ads they had viewed, even though those ads had, in fact, contained
disclaimers. ERA/CRN, at Appendix 2, p. 10. The Commission believes
that whether or not these respondents subsequently reported having
seen a disclosure is not relevant to the overall conclusions about
the ads' communication of efficacy and typicality. The respondents
viewed the ads in realistic conditions: they were given a booklet
containing the ads and allowed to take whatever amount of time they
needed to read it before being asked any questions about the
messages communicated by the booklet. That they did not report
seeing disclaimers does not mean they did not actually see them;
they simply may not have recognized them as such. More important,
Dr. Maronick's focus on these consumers overlooks the fact that
despite the presence of highly prominent disclaimers, a sizeable
percentage of respondents in the Endorsement Booklet Study took away
messages of efficacy and typicality, and that the results of the
Endorsement Booklet Study are consistent with those of the larger
Second Endorsement Study.
---------------------------------------------------------------------------
In addition, even though the data coming from questions that asked
for numerical--as opposed to ``yes'' and ``no'' answers--should not
have been subject to yeasaying, both studies included treatment cells
that would capture the effects of both yeasaying and prior beliefs. In
the Endorsement Booklet Study report, Tables 2b and 3b presented data
that were adjusted using responses provided by a group that saw a
letter touting the product but not mentioning any specific health
conditions or diseases; these analyses
[[Page 72385]]
showed that the effects of testimonials on efficacy and typicality
assessments were strong even after accounting for yeasaying and prior
beliefs. The Second Endorsement Study included ads featuring multiple
testimonials that touted the product but did not provide any numerical
statement of the results that had been achieved by the testimonialist.
Tables 1, 2, 4, and 5 in the Second Endorsement Study show that the
communication of efficacy and typicality in these ``no numbers'' test
conditions was generally quite modest.\75\ However, as noted above, the
Commission is putting on the public record new Tables 1a, 2a, 4a, and
5a that present the results adjusted for the responses obtained in
these ``no numbers'' conditions.
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\75\ In the case of the cholesterol and business opportunity ads
that did not include numbers, the percentage of subjects who
responded saying at least 30 points or $1,200, was 1.54% and 4.69%,
respectively, for Communication (Table 4) and 0% and 3.13%,
respectively for typicality (Table 5). The percentages were somewhat
higher for the weight-loss ad, ranging from 7.81% for typicality
(Table 2) to 12.5% for communication (Table 1) at the 24 pound
level.
---------------------------------------------------------------------------
Finally, although Dr. Maronick calculates what the results would be
for communication of typicality in the Second Endorsement Study if
respondents who answered ``about half'' when asked how many new users
could expect to achieve the results achieved by the testimonialists
were tallied with those who said ``some,'' ``very few,'' or ``none,''
rather than with those who said ``all'' or ``most,'' he does not offer
any reason why that approach would be more appropriate than the
approach taken by the study authors. Indeed, in lay terms, ``about
half'' is consistent with the concept of generally expected results,
and thus respondents giving that answer were properly grouped in the
Second Endorsement Study. However, even adopting Dr. Maronick's
approach, there can be no question that a substantial percentage of the
respondents in all three conditions took away the message that new
users could generally expect to achieve results similar to those
achieved by the testimonialists.\76\
---------------------------------------------------------------------------
\76\ See above note 34 and accompanying text (a practice is
deceptive if a ``significant minority'' of reasonable consumers are
misled) (quoting Deception Policy Statement).
---------------------------------------------------------------------------
After reviewing the staff's consumer research reports (including
the new tables), as well as all of the issues raised by the commenters,
the Commission believes that the results of the staff's studies do
provide useful empirical evidence concerning the messages that
testimonials convey to consumers and the effects of various types of
disclaimers on the communication of efficacy and typicality claims.\77\
---------------------------------------------------------------------------
\77\ See Kraft, Inc., 114 F.T.C. 40, 126 n.13 (1991), aff'd, 970
F.2d 311 (7th Cir. 1992) (agreeing that the design of the
questionnaire used in the staff's consumer survey ``was not without
its flaws, and that alternative or additional means could have been
used'' to minimize yeasaying bias, but that, on balance, the results
were of some probative value); Telebrands Corp., 140 F.T.C. 278, 324
n.45 (2005) (``While the copy test may be flawed for its failure to
excise from the control ad all of the elements that communicated the
challenged claims, copy tests do not have to be flawless to be
reasonably reliable and probative.'') (citing Novartis Corp., 127
F.T.C. 580, 699 n.24 (1999), aff'd, 223 F.3d 783 (D.C. Cir. 2000);
Stouffer Foods Corp., 118 F.T.C. 746, 807 (1994); Bristol-Myers Co.,
85 F.T.C. 688, 744 (1975)).
---------------------------------------------------------------------------
iv. Disallowing the use of non-typical testimonials accompanied by
disclaimers of typicality would raise Constitutional issues.
Eight comments raised First Amendment concerns.\78\ These comments
argued that the revision about which the Commission inquired in its
Federal Register Notice would not pass constitutional scrutiny, or at
least, would raise grave First Amendment concerns.
---------------------------------------------------------------------------
\78\ WLF, NutriSystem, ERA/CRN, and ANA raised substantive
constitutional objections, with NutriSystem attaching to its comment
a legal opinion addressing the issue. Three comments cited general
First Amendment concerns and urged the Commission to use caution in
any revisions to the Guides. FreedomWorks, at 1-3; Specter, at 1-2;
AHPA, at 6. One comment noted the constitutional concerns raised by
another comment, and joined in that comment. Product Partners, at 3
(citing concerns raised by the joint ERA/CRN comment).
---------------------------------------------------------------------------
The comments generally did not dispute that the Commission could
appropriately restrict deceptive testimonials consistent with the First
Amendment.\79\ But they argued in favor of case-by-case analysis rather
than broader across-the-board restrictions, and contended that
consumers are adequately protected from potential deception by the
current practices of: (1) requiring that the testimonialist's
experience be truthful and substantiated, and (2) adding a simple
disclaimer that the stated results are not typical.\80\
---------------------------------------------------------------------------
\79\ The standard for analyzing First Amendment issues involving
commercial speech such as advertising was set forth in Central
Hudson Gas & Elec. Corp v. Public Service Comm'n of New York, 447
U.S. 557, 566 (1980). Under that standard, the first question is
whether the speech at issue concerns unlawful activity or is
misleading. If so, the speech is not entitled to constitutional
protection and may be freely regulated. If the speech at issue
concerns lawful activity or is not misleading, the government
restriction is analyzed under the following test: (1) the government
must assert a substantial interest in support of the restriction;
(2) the government must demonstrate that the restriction directly
advances the asserted government interest; and (3) the restriction
must not be more extensive than necessary to serve that interest.
Id.
The Supreme Court specifically noted in Central Hudson that the
very nature of commercial speech permits government regulation, even
though the First Amendment otherwise generally prohibits content-
based regulation:
First, commercial speakers have extensive knowledge of both the
market and their products. Thus, they are well situated to evaluate
the accuracy of their messages and the lawfulness of the underlying
activity. . . . In addition, commercial speech, the offspring of
economic self-interest, is a hardy breed of expression that is not
``particularly susceptible to being crushed by overbroad
regulation.''
Id. at 564 n.6 (citation omitted).
\80\ See, e.g., NutriSystem, at Exhibit A, p. 15; ERA/CRN, at 8;
ANA, at 10.
---------------------------------------------------------------------------
Some comments stated that government restrictions on commercial
speech must not be more restrictive than necessary, and that requiring
disclosure of generally expected results would go beyond the means
necessary to achieve the FTC's interest in preventing deception.\81\
Others asserted that a revision of the Guides calling for disclosure of
typical results when testimonials reporting atypical experience are
used would not advance a substantial government interest.\82\ Some
argued that such a change in the Guides would prohibit not just false
or misleading messages but would also chill truthful speech because
some advertisers might be deterred from using truthful testimonials if
they could be found liable for violating Section 5 of the FTC Act.\83\
---------------------------------------------------------------------------
\81\ ERA/CRN at 8-9 (Commission already has all the tools it
needs to prevent misleading testimonials; less restrictive
alternative would be for the Commission to clarify what it means by
``clear and conspicuous disclosures''); ANA, at 10 (change would
burden advertisers who disseminate truthful and non-misleading
testimonials, as well as those who transmit misleading information);
NutriSystem, at Exhibit A, pp. 16-17, 20 (change inquired about in
the Federal Register notice would be an overly broad and unduly
burdensome pre-market restriction on commercial speech when applied
to advertising for the meal replacement sector of the weight loss
industry). See also Specter, at 1-2 (noting concerns expressed by
others that disallowance of the disclaimer of typicality could
``result in an overly broad suppression of speech because narrower
regulations that achieve the FTC's goals are available'');
Freedomworks, at 2 (FTC's proposed ``standardized, mandatory
disclaimer statement'' is broader than necessary to prevent
deception). But see WLF, at 7 (although the means chosen to regulate
commercial speech must be narrowly tailored, it need not be the
least severe means available to achieve the regulatory objective).
\82\ ANA, at 10 (comprehensive regulation of endorsements that
already exists means modification of Guides would not directly and
materially advance a substantial government interest); ERA/CRN, at 8
(no legitimate government interest in requiring substantiation of
typicality when the testimonial is truthful, because no risk that
consumers will be deceived).
\83\ ERA/CRN, at 7-8 (footnote omitted); ANA, at 10-11.
---------------------------------------------------------------------------
The Commission agrees that non-deceptive commercial speech is
entitled to First Amendment protection, as set forth in Central Hudson.
A revision of the Guides calling for disclosure of generally expected
results would
[[Page 72386]]
comport with that standard, however, if such disclosure is necessary to
eliminate a deceptive message of typicality conveyed by the
advertiser's use of atypical consumer endorsements.\84\
---------------------------------------------------------------------------
\84\ See WLF, at 9 & n.3 (FTC can insist on use of the most
effective, reasonable disclaimers, including disclosure of average
participant in weight loss program, if such a statistic can be
readily computed).
---------------------------------------------------------------------------
As noted above, the Commission is proposing to revise renumbered
Section 255.2(b) to provide that endorsements about product performance
are likely to convey an implied claim that the stated results are
typical under the depicted circumstances, thereby revisiting its 1980
conclusion that such endorsements necessarily convey such a claim. The
Commission's extensive law enforcement experience with consumer
testimonials since 1980,\85\ its expertise in ad interpretation, and
the staff's two consumer research studies would provide an ample basis
for concluding that consumers are likely to interpret unqualified
endorsements about product performance as representations of the
results typically achieved. See generally FTC v. Colgate Palmolive, 380
U.S. 374, 391-92 (1964); Kraft, Inc. v. FTC, 970 F.2d 311, 319-20 (7th
Cir. 1992); Thompson Medical Co., Inc. v. F.T.C., 791 F.2d 189, 197
(D.C. Cir. 1986). Moreover, a representation of typicality is deceptive
if the results related by the endorser are not what consumers can
generally expect from use of the product or service, and deceptive
speech is not protected by the First Amendment.\86\ Indeed, the Supreme
Court has repeatedly stated that the government can restrict, or even
ban, such speech. Zauderer v. Office of Disciplinary Counsel, 471 U.S.
626 (1985).\87\ Thus, the Commission may appropriately restrict the use
of consumer endorsements that convey the false or unsubstantiated
message that the results experienced by the testimonialists are typical
of those consumers can generally expect.
---------------------------------------------------------------------------
\85\ That experience includes several administrative
litigations. See note 19, above.
\86\ Indeed, with one exception, the commenters do not argue
that consumers are unlikely to take a misleading impression from
endorsements stating atypical results. Instead, the focus appears to
be the choice of remedy needed to cure the misleading impression.
\87\ In Zauderer, the Supreme Court upheld a disciplinary ruling
against an attorney who had disseminated an advertisement informing
potential clients that certain cases were handled on a contingent-
fee basis, and that ``[i]f there is no recovery, no legal fees are
owed by our clients,'' but failing to disclose that those clients
would, nonetheless, be liable for litigation ``costs.'' The Court
noted that the State of Ohio had ``not attempted to prevent
attorneys from conveying information to the public; it has only
required them to provide somewhat more information than they
otherwise might be inclined to present.'' 471 U.S. at 650. The Court
then held that an advertiser's rights were adequately protected as
long as disclosure requirements were ``reasonably related'' to the
State's interest in preventing deception. Id. at 651 & n.14.
---------------------------------------------------------------------------
In such circumstances, providing a safe harbor for testimonials
that are accompanied by a clear and conspicuous disclosure of the
results generally achieved by consumers does not offend the First
Amendment.\88\ Likewise, failure to embrace a blanket safe harbor for
the use of disclaimers such as ``results not typical'' in the context
of Commission guidance where the available evidence suggests that such
disclaimers are ineffective would not raise any significant First
Amendment issues, particularly when the Guides recognize that not every
testimonial will convey a typicality claim, and, as discussed below,
also do not rule out the possibility that a strong disclaimer of
typicality could be effective in the context of a particular
advertisement.
---------------------------------------------------------------------------
\88\ See 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 498
(1996) (``the State may require commercial messages to `appear in
such a form, or include such additional information, warnings, and
disclaimers, as are necessary to prevent its being deceptive''')
(quoting Virginia Bd. of Pharmacy v. Virginia Citizens Consumers
Council, Inc., 425 U.S. 748, 772 n.24 (1976)).
---------------------------------------------------------------------------
Even if analyzed under the more rigorous three-part test set forth
in Central Hudson for restrictions on speech involving lawful activity
that is not misleading, a revision to the Guides providing a safe
harbor only for disclosure of ``generally expected results'' when
advertisers cannot substantiate that consumers can generally expect the
result achieved by the testimonialist would pass First Amendment
scrutiny.\89\ First, the Commission's interest in requiring this
disclosure is to prevent deception. The Court repeatedly has held that
preventing fraud and deception is a substantial state interest.
Edenfeld v. Fane, 507 U.S. 761, 769 (1993) (``there is no question that
[the government's] interest in ensuring the accuracy of commercial
information is substantial''); Pearson v. Shalala, 164 F.3d 650, 655-56
(D.C. Cir. 1999).
---------------------------------------------------------------------------
\89\ It should be reiterated in this regard that the Guides are
not an independent source of legal authority for the Commission; any
law enforcement action would be based on a case-specific
investigation. See Letter from Landis S. Plummer, Acting Secretary,
to Jonathan W. Emord, Esq., at p. 2 (Apr. 1, 2004) (noting that
Commission does not pre-review advertising, but might commence
investigation after an advertisement has been disseminated to
determine whether specific claims may be false or unsubstantiated)
(available at www.ftc.gov/os/2004/04/040420healthrulemaking.pdf).
Even if the FTC eliminated the safe harbor for disclosing the non-
typicality of the endorser's experience, it would have the burden in
any subsequent law enforcement action of proving that the ad in
question was deceptive.
---------------------------------------------------------------------------
Second, disclosure of generally expected results would directly and
materially advance the government's interest in preventing deception,
by providing consumers additional factual information about the
advertised product or service, and allowing them to assess the
information accurately.\90\ Again, the Commission's established
expertise in the area of deceptive consumer endorsements and the
staff's two consumer research studies provide an adequate basis for the
Commission's decision that inadequately qualified testimonials that
convey, incorrectly, that the results experienced by the testimonialist
are typical, are likely to mislead reasonable consumers, and that more
detailed disclosure reduces the potential for deception. See Florida
Bar v. Went for It, Inc., 515 U.S. 618, 629 (1995); Zauderer, 471 U.S.
at 652-53 (citing FTC v. Colgate Palmolive, 380 U.S. 374 (1964)). It
bears repeating in this context that under Commission law, an
advertisement can be capable of several reasonable interpretations, and
if any one of them is misleading, the advertisement is deceptive in
violation of Section 5. See Deception Policy Statement, 103 F.T.C. at
178.
---------------------------------------------------------------------------
\90\ See Pearson v Shalala, 164 F.3d at 656-57 (finding that
FDA's prohibition of certain health claims ``would appear to advance
directly its interest in protecting against consumer fraud'' but
ultimately invalidating regulations because the government failed to
show the ban on health claims met Central Hudson's ``reasonable
fit'' requirement).
---------------------------------------------------------------------------
And third, disclosure of ``generally expected results'' would not
be more extensive than reasonably necessary to serve the government's
interest in preventing deception.\91\ The commenters do not contest
that the Commission can require clear and conspicuous disclaimers to
eliminate a deceptive impression of typicality. A disclaimer beyond
``results not typical'' can be justified by the studies that the
Commission put on the public record in January 2007, which show that
the simple disclosure is not adequate, while disclosure of average
results greatly reduces the potential for deception. Moreover, the
Guides would be calling for more speech, not less: they would not ban
the use of atypical endorsements or even the use of ``results not
typical'' disclaimers, but instead would advise advertisers who choose
to use testimonials that convey a typicality message to include
additional
[[Page 72387]]
information to prevent a misleading impression. Therefore, there is a
reasonable fit.\92\
---------------------------------------------------------------------------
\91\ The First Amendment does not require that the fit be the
``least restrictive means'' possible. Rather, the fit must be
reasonable. Board of Trustees of S.U.N.Y. v. Fox, 492 U.S. 469, 480
(1989). See also WLF, at 7.
\92\ Some commenters suggest that a more detailed disclosure
remedy would be overinclusive because not all consumers might be
misled. Even if true, the restriction would still be sufficiently
and reasonably tailored. See Florida Bar, 515 U.S. at 555 (rejecting
argument that restriction against in-person solicitation was
overinclusive insofar as it banned information even to citizens
whose injuries were relatively minor or might keep consumers from
learning about their legal rights at a time when others might be
contacting them).
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c. Proposed revisions to the Guides' provisions concerning disclaimers
of typicality
Based upon the staff's empirical research and its law enforcement
experience, the Commission believes that disclaimers regarding the
limited applicability of an endorser's experience to what consumers may
generally expect to achieve are unlikely to be effective, and therefore
that the Guides' current safe harbor for such disclaimers should be
eliminated. Accordingly, and having considered the comments submitted
in response to the January 2007 Federal Register notice, the Commission
now proposes to revise the renumbered Section 255.2(b) not only to
provide that testimonials reflecting consumer experience on a key
attribute of the product will likely be interpreted as representing
that the endorser's experience is representative of what consumers will
generally achieve with the advertised product in actual, albeit
variable, conditions of use, but also to provide that when testimonials
do so convey, and the advertiser does not possess adequate
substantiation for this representation, the advertiser should clearly
and conspicuously disclose the generally expected performance in the
depicted circumstances.
The Commission specifically seeks comment on whether there are
product categories for which this requirement would prevent advertisers
from using endorsements even though the advertiser believes that the
endorsers' experiences are or likely are generally representative. For
any such product categories, the Commission seeks information
concerning the costs and benefits to the advertiser, to competition,
and to consumers of the inability to use such endorsements in
advertisements, together with any supporting empirical data.
Finally, as noted above, notwithstanding the results of the staff's
consumer research, the Commission cannot rule out the possibility that
a strong disclaimer of typicality could be effective in the context of
a particular advertisement. Therefore, the Commission also proposes
adding a footnote to this subsection acknowledging this possibility.
The footnote also notes that an advertiser employing a strong
disclaimer will avoid the risk of FTC law enforcement action if it has
valid empirical testing demonstrating that the net impression of its
advertisement is non-deceptive. The Commission seeks comment on these
proposed revisions.
3. Current Section 255.2(c)
The Commission proposes to eliminate Section 255.2(c) in the
current Guides, which prohibits efficacy claims in consumer
endorsements for drugs or devices unless the advertiser has adequate
scientific substantiation for the claims and the claims are not
inconsistent with any determination by the Food and Drug Administration
concerning the drug or device. The Commission believes this section to
be unnecessary. Revised Sections 255.2(a) and 255.2(b) effectively
prohibit consumer endorsements for drugs or devices unless the
advertiser has adequate scientific substantiation for any efficacy
claims conveyed by the ads.
4. New Examples for Renumbered Section 255.2
The Commission is also proposing to add five new examples to
Section 255.2. The first, new Example 1, involving consumer
endorsements for a baldness treatment, illustrates that testimonials
can convey an efficacy claim, even though the advertisement in which
they appear makes no other representations about the product.\93\ The
example also shows that the advertiser must have substantiation for
that efficacy claim--in the case of a baldness cure, competent and
reliable scientific evidence--and that the ad will likely communicate
that the endorsers' experiences are representative of what new users of
the product can generally expect. New Example 1 also illustrates that
an advertiser is unlikely to avoid liability under Section 5 simply by
attempting to disclaim the typicality representations made through
consumer endorsements. Specifically, new Example 1 provides that if the
advertiser does not have adequate substantiation that new users
typically will experience results similar to the spectacular results
experienced by the testimonialists, the advertisement will be
deceptive.
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\93\ The Commission is proposing to delete the existing Example
1 in Section 255.2 because it is inconsistent with the Commission's
proposed revisions to the Guides. The current Examples 2 and 3 would
be renumbered as Examples 5 and 6 in the revised Guides. The
Commission is also proposing a minor edit to the last sentence of
renumbered Example 5: the phrase ``probably represents a promise to
consumers that this is the typical result'' would be changed to
``represents that this is the typical result. . .'' The Commission
believes that the use of poll results conveys a virtually express
typicality claim.
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This example illustrates a long-standing principle that pro forma
statements or disclaimers may not cure otherwise deceptive
messages.\94\ The Commission's consumer research also supports this
proposition. In the Endorsement Booklet Study, ads with prominent,
strong disclosures still communicated efficacy claims to substantial
percentages of consumers. Specifically, even with the disclosure used
in Example 1--``Notice: These testimonials do not prove our product
works. You should not expect to have similar results.''--between 53.0%
and 64.7% of the respondents took away the claim that the advertised
supplement was effective for reducing breathing problems, increasing
energy levels, and relieving chronic or persistent pain. (See Table 2b
of the Endorsement Booklet Study.)
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\94\ Deception Policy Statement, 103 F.T.C. at 180.
---------------------------------------------------------------------------
In new Example 2, endorsements are provided by three individuals
who describe their monthly savings from using the advertised heat pump.
The ad is interpreted as conveying that such savings represent what
consumers who buy the company's heat pump can generally expect to
experience, and, in this example, the advertiser does not have
substantiation for this representation because fewer than 20% of
purchasers will save even the smallest amount mentioned in the ad. As
discussed above, the Commission's consumer research shows that
consumers interpret testimonials to convey that about half of new
consumers could expect the claimed results. Nonetheless, the Commission
is not presently prepared to incorporate a specific numerical standard
for ``generally representative'' that would apply to all endorsements
for all products. Instead, new Example 2 clearly indicates that fewer
than 20% is not generally representative.\95\
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\95\ Existing Example 1 appears to interpret ``generally
representative'' as ``a significant proportion,'' a phrase that is
ambiguous and arguably could be a small percentage of consumers.
---------------------------------------------------------------------------
New Example 2 also clearly indicates that disclaimers such as
``Results not typical'' or ``These testimonials are based on the
experiences of a few people and you are not likely to have similar
results'' will be insufficient to prevent the ad from being deceptive.
The example states that the ad is less likely to be deceptive if it
clearly and conspicuously discloses the generally
[[Page 72388]]
expected savings and the advertiser has adequate substantiation for
that claim. Finally, new Example 2 illustrates several of the multiple
ways such a disclosure could be phrased.
New Example 3 illustrates that use of the recommended disclosure
does not obviate the need to have substantiation for the efficacy
claims conveyed by the ad. In this example, an ad for a cholesterol-
lowering product features an individual who claims to have reduced his
serum cholesterol level by 120 points, without any lifestyle changes. A
well-conducted clinical study shows that the product reduces the
cholesterol levels of individuals with elevated cholesterol by 15% and
the advertisement clearly and conspicuously discloses this fact. The
example makes clear that the advertiser must have adequate
substantiation that the product is capable of causing the specific
results claimed by the endorser--a 120-point reduction in serum
cholesterol without any lifestyle changes. Without that substantiation,
the ad will be deceptive even with the disclosure of the generally
expected results.
In new Example 4, the endorsement itself so clearly describes the
limited and truly exceptional circumstances under which the endorser
achieved the results claimed (six months of eating nothing but raw
vegetables, six hours of vigorous exercise every day, and use of the
advertised product enabled a 250-pound woman to lose 110 pounds), that
the ad is unlikely to convey that consumers who use the advertised
product under ordinary and typical circumstances should generally
expect to achieve the results achieved by the endorser. Nonetheless,
the advertiser must have substantiation for any performance claims
conveyed by the endorsement (e.g., that the advertised product causes
substantial weight loss). Finally, the example illustrates that a vague
reference to the extreme circumstances under which the depicted results
were achieved (``together with diet and exercise'') will likely be
insufficient to avoid communicating that the depicted results are
representative.
New Example 7 illustrates another situation in which consumer
endorsements will not trigger an obligation for the advertiser to
determine whether the testimonialist's experience is typical of what
other consumers can expect. Consumers should realize that the positive
reviews given by three individuals exiting a movie theater are
inherently subjective, and that they may not have the same reaction.
D. Section 255.3--Expert Endorsements
Section 255.3 provides guidance with respect to expert
endorsements. The Commission is proposing the addition of two new
examples to this section, the modification of two examples in the
current Guides, and the deletion of another.\96\
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\96\ Examples 2 to 4 in the current Guides would be renumbered
as Examples 3 to 5. Example 5 in the current Guides would be deleted
because the Commission believes it is anachronistic. Consumers today
would be unlikely to view the association as an expert in the field
of nutrition and would likely assume that the endorsement was based
on compensation, rather than on an evaluation of the product's
nutritive value.
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New Example 2 provides additional illustration of the principle
that an expert endorser must possess the level of expertise that the ad
implies he or she has. This illustration notes that if an endorser of a
hearing aid is simply referred to as ``Doctor'' during the course of an
advertisement, the likely implication--given the nature of the product
being advertised--is that the endorser is a medical doctor with
substantial experience in the area of hearing. If the endorser is not a
medical doctor with substantial experience in audiology (in this
example the endorser has a doctorate in exercise physiology), the
endorsement is likely deceptive. The example notes that a non-medical
``doctor'' or a physician without substantial experience in the area of
hearing can endorse the product, but if the endorser is referred to as
``doctor,'' the advertisement must make clear the nature and limits of
the endorser's expertise.
Example 2 in the current Guides addresses an endorsement by an
institution whose name implies that the entity is a bona fide
independent testing organization with appropriate expertise. The
current example (renumbered Example 3) assumes that such is the case.
The Commission proposes to add a sentence to clarify that if the
endorser is not such a bona fide independent testing organization
(e.g., if it was established and operated by the advertiser), the
endorsement would be deceptive.
Example 3 in the current Guides discusses a hospital's endorsement
of a non-prescription drug. In this example (which would be renumbered
Example 4), the hospital has selected that particular product over its
competitors because the manufacturer sells individually packaged doses
to institutional users, although not to the general public. The
Commission proposes to supplement the reasons currently given as to why
this example is deceptive, to include the fact that the basis for the
hospital's decision is not disclosed to consumers.
Example 4 in the current Guides suggests that if the president of a
home cleaning company says that he or she uses a particular brand of
cleanser in his or her business, this conveys that the individual
believes that the advertised cleanser is at least as effective as other
cleansers. The Commission has rewritten this example (renumbered as
Example 5) to clarify why the endorser is considered an expert, and to
indicate more clearly that the expert is comparing the cleanser to the
product's leading competitors that the expert has tried and that the
basis of this comparison is the cleanser's performance.
New Example 6 is intended to provide an example of an instance when
an expert's endorsement is not supported by an adequate exercise of
expertise. The example posits the situation where a medical doctor
states that a drug will safely allow consumers to lower their
cholesterol by 50 points after having reviewed only letters from
satisfied consumers or the results of a rodent test. The example is
premised on the assumption that these are not the types of evidence
that others with the same degree of expertise would consider adequate
to support conclusions about the product's safety and efficacy.
E. Section 255.4--Endorsements by Organizations
Section 255.4 provides guidance specific to the use of endorsements
by organizations. The Commission is not proposing any substantive
revisions to this section.
F. Section 255.5--Disclosure of Material Connections
Section 255.5 of the current Guides states that advertisers must
disclose connections between themselves and their endorsers that might
materially affect the weight or credibility of the endorsement (i.e.,
the connection is not reasonably expected by the audience). It also
indicates that consumers will ordinarily expect that endorsers who are
well-known personalities (i.e., celebrities) or experts will be
compensated for their endorsements; therefore, unless the advertiser
represents that a celebrity or expert endorser has given an endorsement
without compensation, the advertiser need not disclose the payment of
compensation to that endorser. The Guides make no distinction between
an endorser who receives a flat fee for the endorsement and one who
earns a royalty for each product sold after the
[[Page 72389]]
ad containing the endorsement is disseminated.
The Commission believes that the requirement that advertisers
disclose material connections with their endorsers is appropriate and
should be retained. The Commission proposes to delete the second
sentence of current Section 255.5, however, because it believes: (1)
that consumers' expectations about celebrities and about experts may
not be completely congruent; and (2) that even with respect to
celebrities, knowledge of the individual's connections with the
product's marketer may be material to consumers for endorsements made
in certain nontraditional contexts. In other words, the assumptions
behind the across-the-board statement in the second sentence of current
Section 255.5 no longer appear warranted.
With respect to celebrities, the Commission does not believe that
it is relevant to consumers how or how much these individuals are
compensated for their services in the context of conventional
advertising. Accordingly, Example 2 is being revised to clarify that a
royalty payment paid to an actor for each product sold need not be
disclosed.
Unlike the case with celebrities, however, there could be
situations in which the nature or amount of an expert's compensation
might be relevant to consumers. Stated differently, although consumers
likely expect that an expert will be paid for the time he or she spends
conducting the analysis necessary to render an expert opinion, there
could be certain compensation arrangements the knowledge of which would
affect consumer purchase decisions.
Several Commission cases have specifically challenged an
advertiser's failure to disclose an expert endorser's financial
interest in promoting the sale of the advertised product,\97\ and in
new Example 4, these kinds of relationships are deemed likely to
materially affect the weight that consumers give to a physician's
endorsement of an anti-snoring product. The Commission specifically
seeks comment on this example: if consumers know that an expert has a
significant financial interest in sales of the product (such as an
ownership interest in the company or compensation based on product
sales), is this information likely to affect their assessments of the
expert's credibility? Are there also other financial compensation
arrangements (e.g., lump sum payments over a certain threshold) that
would also be relevant to consumers' assessment of the expert's
credibility?
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\97\ See, e.g., Med Gen, Inc., 134 F.T.C. 1 (2002) (consent
agreement) (failing to disclose that an expert was an investor in
the advertiser and may have a financial interest in promoting the
sale of the advertised product); Body Wise Int'l, Inc., 120 F.T.C.
704 (1995) (consent agreement) (failing to disclose that expert
endorsers are Body Wise distributors and may have a financial
interest in promoting the sale of the advertised product); Numex
Corp., 116 F.T.C. 1078 (1993) (consent agreement) (failing to
disclose that expert endorsers indirectly owned stock in the
advertiser, that they were to receive payments for each unit of the
advertised product sold, and that one was an officer and director of
the advertiser while the other was an officer).
---------------------------------------------------------------------------
The Commission further notes that even with respect to celebrities,
distinctions would appear to arise between endorsements made in
conventional advertising and those made in nontraditional contexts. In
the latter context, as discussed below, disclosure may be necessary.
In its January 2007 Regulatory Review notice, the Commission
referred to a 2003 petition from the consumer advocacy organization
Commercial Alert, which suggested an exception to the principle that
consumers will ordinarily expect that endorsers who are well- known
personalities are compensated for their endorsements: when celebrities
are paid for touting the performance of brand-name drugs on talk shows
and other television programs, but do not mention on the air their
financial ties to the drug's manufacturer. 72 Fed. Reg. at 2217. The
Commission asked for any extrinsic evidence regarding consumer
expectations about celebrity endorsements made during interviews, and
specifically solicited written public comment on whether knowledge that
a celebrity endorsing a product during such an interview is being paid
for doing so would affect the weight or credibility consumers give to
the celebrity's endorsement.
Two comments specifically addressed these issues, although neither
submitted any extrinsic evidence about consumers' expectations. One
noted that when a celebrity speaks favorably about his or her own use
of a product in an interview, rather than in a conventional ad, it
seems even more sincere; consequently, if the celebrity's compensation
is not disclosed, his or her opinion may be taken as even more
legitimate.\98\
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\98\ Adams, at 2.
---------------------------------------------------------------------------
Another commenter suggested that absent evidence that celebrities
were frequently endorsing products in contexts other than conventional
advertising, the FTC should not address this practice in the
Guides.\99\ This commenter noted that celebrities often appear publicly
wearing brand name clothing and suggested that it would be extremely
difficult to distinguish those situations when consumers would expect
them to be compensated from those when they would not. Furthermore, the
commenter said, celebrities retain their right under the First
Amendment to speak on public issues, and many of their public
statements would likely be noncommercial speech.
---------------------------------------------------------------------------
\99\ WLF, at 10.
---------------------------------------------------------------------------
A third comment suggested that the real problem with celebrity
endorsements is the failure of advertisers to disclose the compensation
celebrities receive when they endorse prescription drugs.\100\
According to this commenter, because the Food and Drug Administration
assumes that consumers understand celebrities are compensated for drug
endorsements, the FTC does not challenge these endorsements even though
prescription drugs--in the view of this commenter--pose more risks to
consumer health than do dietary supplements.\101\
---------------------------------------------------------------------------
\100\ NPA, at 4.
\101\ Id. at 4-5.
---------------------------------------------------------------------------
The Commission believes that when celebrities are paid
spokespersons, their endorsements are commercial messages, regardless
of whether they are disseminated in a traditional advertising context--
i.e., a television commercial or print ad--or elsewhere. In the context
of an interview, there is no reason for consumers to suspect that the
endorsement is anything more than a spontaneous mention by a celebrity
who has no apparent connection with the product's marketer.
The Commission is proposing a new Example 3 to address this
issue.\102\ This example makes it clear that consumers would not expect
a celebrity endorsing a product during a routine interview to be paid
for doing so, and that knowledge of such a financial interest would
likely affect the weight or credibility consumers give to the
celebrity's endorsement. In order to avoid the possibility of
deception, the celebrity's financial connection to the advertiser
should be disclosed.
---------------------------------------------------------------------------
\102\ Example 3 in the current Guides would be renumbered as
Example 5.
---------------------------------------------------------------------------
New Example 3 then goes on to distinguish this situation from one
in which the celebrity appears during the interview wearing clothes
bearing the insignia of a company with which she has an endorsement
contract, but does not mention the company or discuss the clothes. No
disclosure is required because she is not making any representation
about the clothes. The
[[Page 72390]]
Commission requests comment on both parts of new Example 3.
The Commission is also proposing the addition of several other new
examples to Section 255.5. New Example 6 addresses the situation where
``extras'' who want to work in commercials are recruited to use a
product in order to give endorsements in exchange for compensation and
exposure. Viewers would not expect that ``consumer endorsers'' are
actors who were asked to use the product so that they could appear in
the commercial or that they were compensated. The example states that
an advertisement that fails to disclose these facts is deceptive.
New Examples 7, 8, and 9 apply the general principle that material
connections between the endorser and the advertiser should be disclosed
to several new forms of marketing--blogs, discussion boards, and
``street teams.'' The Commission specifically seeks comment on these
examples, with particular focus on the expectations held by consumers
as to the relationships that exist between advertisers and endorsers in
these new marketing contexts.
The Commission notes in this regard that WOMMA, a trade association
whose members are engaged in word-of-mouth and other new types of
marketing, stated in its comment that the relationship between
endorsers and advertisers should not be concealed, and that the
principles of transparency that form the basis of its code of ethics
require, among other things, that endorsers not misrepresent their
opinions or their identities (for example, by creating artificial
entities to endorse products).\103\ The Commission has long believed
that industry self-regulatory codes play an important role in consumer
protection, and that the development of ethical standards emphasizing
transparency for marketers who engage in new forms of marketing is an
important step to this end.
---------------------------------------------------------------------------
\103\ WOMMA, at 10.
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Finally, the Attorneys General suggested in their comment that the
Commission add a new provision to the Guides providing that when an
advertisement relies on a study that was sponsored by the advertiser
itself, the advertisement should clearly disclose this
information.\104\ The Attorneys General note that although the Guides
require the disclosure of material connections between endorsers and
advertisers, current Example 1 under Section 255.5 specifies that an
advertiser's payment of expenses to the entity that conducted a touted
study need not be disclosed in the advertisement. The Attorneys General
believe that the advertiser's funding of the study would, in fact, be a
material factor for consumers to consider in deciding how much weight
or credibility to give the endorsement.\105\
---------------------------------------------------------------------------
\104\ Attorneys General, at 3.
\105\ Id.
---------------------------------------------------------------------------
The Commission is not proposing to change Example 1 substantively
at this time, but it is proposing certain modifications to provide
additional factual background and to explain why disclosure of the
funding for that test would not be required. The Commission seeks
comment on these modifications, and on the suggestion made by the
Attorneys General that there is a discrepancy between Section 255.5 of
the Guides and current Example 1. The Commission also particularly
seeks extrinsic evidence of consumer understanding concerning this
issue.
V. PROPOSED REVISED ENDORSEMENT AND TESTIMONIAL GUIDES
FTC Guides Concerning Use of Endorsements and Testimonials in
Advertising
Sec. 255.0 Purpose and definitions.
255.1 General considerations.
255.2 Consumer endorsements.
255.3 Expert endorsements.
255.4 Endorsements by organizations.
255.5 Disclosure of material connections.
Authority: 38 Stat. 717, as amended; 15 U.S.C. 41 - 58.
Sec. 255.0 Purpose and definitions.
(a) The Guides in this part represent administrative
interpretations of laws enforced by the Federal Trade Commission for
the guidance of the public in conducting its affairs in conformity with
legal requirements. Specifically, the Guides address the application of
Section 5 of the FTC Act (15 U.S.C. Sec. 45) to the use of
endorsements and testimonials in advertising. The Guides provide the
basis for voluntary compliance with the law by advertisers and
endorsers. Practices inconsistent with these Guides may result in
corrective action by the Commission under Section 5 if, after
investigation, the Commission has reason to believe that the practices
fall within the scope of conduct declared unlawful by the statute.
The Guides set forth the general principles that the Commission
will use in evaluating endorsements and testimonials, together with
examples illustrating the application of those principles. The Guides
do not purport to cover every possible use of endorsements in
advertising. Whether a particular endorsement or testimonial is
deceptive will depend on the specific factual circumstances of the
advertisement at issue.
(b) For purposes of this part, an endorsement means any advertising
message (including verbal statements, demonstrations, or depictions of
the name, signature, likeness or other identifying personal
characteristics of an individual or the name or seal of an
organization) that consumers are likely to believe reflects the
opinions, beliefs, findings, or experiences of a party other than the
sponsoring advertiser, even if the views expressed by that party are
identical to those of the sponsoring advertiser. The party whose
opinions, beliefs, findings, or experience the message appears to
reflect will be called the endorser and may be an individual, group, or
institution.
(c) The Commission intends to treat endorsements and testimonials
identically in the context of its enforcement of the Federal Trade
Commission Act and for purposes of this part. The term endorsements is
therefore generally used hereinafter to cover both terms and
situations.
(d) For purposes of this part, the term product includes any
product, service, company or industry.
(e) For purposes of this part, an expert is an individual, group,
or institution possessing, as a result of experience, study, or
training, knowledge of a particular subject, which knowledge is
superior to what ordinary individuals generally acquire.
Example 1: A film critic's review of a movie is excerpted in an
advertisement. When so used, the review meets the definition of an
endorsement because it is viewed by readers as a statement of the
critic's own opinions and not those of the film producer, distributor,
or exhibitor. Any alteration in or quotation from the text of the
review that does not fairly reflect its substance would be a violation
of the standards set by this part because it would distort the
endorser's opinion. [See Sec. 255.1(b).]
Example 2: A TV commercial depicts two women in a supermarket
buying a laundry detergent. The women are not identified outside the
context of the advertisement. One comments to the other how clean her
brand makes her family's clothes, and the other then comments that she
will try it because she has not been fully satisfied with her own
brand. This obvious fictional dramatization of a real life situation
would not be an endorsement.
Example 3: In an advertisement for a pain remedy, an announcer who
is not familiar to consumers except as a
[[Page 72391]]
spokesman for the advertising drug company praises the drug's ability
to deliver fast and lasting pain relief. He purports to speak, not on
the basis of his own opinions, but rather in the place of and on behalf
of the drug company. The announcer's statements would not be considered
an endorsement.
Example 4: A manufacturer of automobile tires hires a well-known
professional automobile racing driver to deliver its advertising
message in television commercials. In these commercials, the driver
speaks of the smooth ride, strength, and long life of the tires. Even
though the message is not expressly declared to be the personal opinion
of the driver, it may nevertheless constitute an endorsement of the
tires. Many consumers will recognize this individual as being primarily
a racing driver and not merely a spokesperson or announcer for the
advertiser. Accordingly, they may well believe the driver would not
speak for an automotive product unless he actually believed in what he
was saying and had personal knowledge sufficient to form that belief.
Hence, they would think that the advertising message reflects the
driver's personal views. This attribution of the underlying views to
the driver brings the advertisement within the definition of an
endorsement for purposes of this part.
Example 5: A television advertisement for a particular brand of
golf balls shows a prominent and well-recognized professional golfer
practicing numerous drives off the tee. This would be an endorsement by
the golfer even though she makes no verbal statement in the
advertisement.
Example 6: An infomercial for a home fitness system is hosted by a
well-known entertainer. During the infomercial, the entertainer
demonstrates the machine and states that it is the most effective and
easy-to-use home exercise machine that she has ever tried. Even if she
is reading from a script, this statement would be an endorsement,
because consumers are likely to believe it reflects the entertainer's
views.
Example 7: A television advertisement for a housewares store
features a well-known female comedian and a well-known male baseball
player engaging in light-hearted banter about products each one intends
to purchase for the other. The comedian says that she will buy him a
Brand X, portable, high-definition television so he can finally see the
strike zone. He says that he will get her a Brand Y juicer so she can
make juice with all the fruit and vegetables thrown at her during her
performances. The comedian and baseball player are not likely to be
deemed endorsers because consumers will likely realize that the
individuals are not expressing their own views.
Sec. 255.1 General considerations.
(a) Endorsements must reflect the honest opinions, findings,
beliefs, or experience of the endorser. Furthermore, an endorsement may
not convey any express or implied representation that would be
deceptive if made directly by the advertiser. [See Sec. Sec. 255.2(a)
and (b) regarding substantiation of representations conveyed by
consumer endorsements. See also Example 3 to Guide 3 (Sec. 255.3)
illustrating how a valid endorsement by an expert endorser may
constitute all or part of an advertiser's substantiation, depending on
the claim.]
(b) The endorsement message need not be phrased in the exact words
of the endorser, unless the advertisement affirmatively so represents.
However, the endorsement may not be presented out of context or
reworded so as to distort in any way the endorser's opinion or
experience with the product. An advertiser may use an endorsement of an
expert or celebrity only so long as it has good reason to believe that
the endorser continues to subscribe to the views presented. An
advertiser may satisfy this obligation by securing the endorser's views
at reasonable intervals where reasonableness will be determined by such
factors as new information on the performance or effectiveness of the
product, a material alteration in the product, changes in the
performance of competitors' products, and the advertiser's contract
commitments.
(c) When the advertisement represents that the endorser uses the
endorsed product, the endorser must have been a bona fide user of it at
the time the endorsement was given. Additionally, the advertiser may
continue to run the advertisement only so long as it has good reason to
believe that the endorser remains a bona fide user of the product. [See
Sec. 255.1(b) regarding the ``good reason to believe'' requirement.]
(d) Advertisers are subject to liability for false or
unsubstantiated statements made through endorsements, or for failing to
disclose material connections between themselves and their endorsers
[see Sec. 255.5]. Endorsers also may be liable for statements made in
the course of their endorsements.
Example 1: A building contractor states in an advertisement that he
uses the advertiser's exterior house paint because of its remarkable
quick drying properties and durability. This endorsement must comply
with the pertinent requirements of Section 255.3 (Expert Endorsements).
Subsequently, the advertiser reformulates its paint to enable it to
cover exterior surfaces with only one coat. Prior to continued use of
the contractor's endorsement, the advertiser must contact the
contractor in order to determine whether the contractor would continue
to specify the paint and to subscribe to the views presented
previously.
Example 2: A television advertisement portrays a woman seated at a
desk on which rest five unmarked computer keyboards. An announcer says,
``We asked X, an administrative assistant for over ten years, to try
these five unmarked keyboards and tell us which one she liked best.''
The advertisement portrays X typing on each keyboard and then picking
the advertiser's brand. The announcer asks her why, and X gives her
reasons. This endorsement would probably not represent that X actually
uses the advertiser's keyboard at work. In addition, the endorsement
also may be required to meet the standards of Section 255.3 (Expert
Endorsements).
Example 3: An ad for an acne treatment features a dermatologist who
claims that the product is ``clinically proven'' to work. Before giving
the endorsement, she received a write-up of the clinical study in
question, which indicates flaws in the design and conduct of the study
that are so serious that they preclude any conclusions about the
efficacy of the product. The dermatologist is subject to liability for
the false statements she made in the advertisement. The advertiser is
also liable for misrepresentations made through the endorsement.
Example 4: A well-known celebrity appears in an infomercial for an
oven roasting bag that purportedly cooks every chicken perfectly in
thirty minutes. During the shooting of the infomercial, the celebrity
watches five attempts to cook chickens using the bag. In each attempt,
the chicken is undercooked after thirty minutes and requires sixty
minutes of cooking time. In the commercial, the celebrity places an
uncooked chicken in the oven roasting bag and places the bag in one
oven. He then takes a chicken roasting bag from a second oven, removes
from the bag what appears to be a perfectly cooked chicken, tastes the
chicken, and says that if you want perfect chicken every time, in just
thirty minutes, this is the product you need. A significant percentage
of consumers are likely to believe the celebrity's statements represent
his own views even though he is reading from a script. The celebrity is
subject to liability for his statement
[[Page 72392]]
about the product. The advertiser is also liable for misrepresentations
made through the endorsement.
Example 5: A skin care products advertiser participates in a blog
advertising service. The service matches up advertisers with bloggers
who will promote the advertiser's products on their personal blogs. The
advertiser requests that a blogger try a new body lotion and write a
review of the product on her blog. Although the advertiser does not
make any specific claims about the lotion's ability to cure skin
conditions and the blogger does not ask the advertiser whether there is
substantiation for the claim, in her review the blogger writes that the
lotion cures eczema and recommends the product to her blog readers who
suffer from this condition. The advertiser is subject to liability for
false or unsubstantiated statements made through the blogger's
endorsement. The blogger also is subject to liability for
representations made in the course of her endorsement. The blogger is
also liable if she fails to disclose clearly and conspicuously that she
is being paid for her services. [See Sec. 255.5.]
In order to limit its potential liability, the advertiser should
ensure that the advertising service provides guidance and training to
its bloggers concerning the need to ensure that statements they make
are truthful and substantiated. The advertiser should also monitor
bloggers who are being paid to promote its products and take steps
necessary to halt the continued publication of deceptive
representations when they are discovered.
Sec. 255.2 Consumer endorsements.
(a) An advertisement employing endorsements by one or more
consumers about the performance of an advertised product or service
will be interpreted as representing that the product or service is
effective for the purpose depicted in the advertisement. Therefore, the
advertiser must possess and rely upon adequate substantiation,
including, when appropriate, competent and reliable scientific
evidence, to support such claims made through endorsements in the same
manner the advertiser would be required to do if it had made the
representation directly, i.e., without using endorsements. Consumer
endorsements themselves are not competent and reliable scientific
evidence.
(b) An advertisement containing an endorsement relating the
experience of one or more consumers on a central or key attribute of
the product or service also will likely be interpreted as representing
that the endorser's experience is representative of what consumers will
generally achieve with the advertised product in actual, albeit
variable, conditions of use. Therefore, an advertiser should possess
and rely upon adequate substantiation for this representation. If the
advertiser does not have substantiation that the endorser's experience
is representative of what consumers will generally achieve, the
advertisement should clearly and conspicuously disclose the generally
expected performance in the depicted circumstances, and the advertiser
must possess and rely on adequate substantiation for that
representation.\106\
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\106\ The Commission tested the communication of advertisements
containing testimonials that clearly and prominently disclosed
either ``Results not typical'' or the stronger ``These testimonials
are based on the experiences of a few people and you are not likely
to have similar results.'' Neither disclosure adequately reduced the
communication that the experiences depicted are generally
representative. Based upon this research, the Commission believes
that similar disclaimers regarding the limited applicability of an
endorser's experience to what consumers may generally expect to
achieve are unlikely to be effective.
Nonetheless, the Commission cannot rule out the possibility that
a strong disclaimer of typicality could be effective in the context
of a particular advertisement. Although the Commission would have
the burden of proof in a law enforcement action, the Commission
notes that an advertiser possessing reliable empirical testing
demonstrating that the net impression of its advertisement with such
a disclaimer is non-deceptive will avoid the risk of the initiation
of such an action in the first instance.
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(c) Advertisements presenting endorsements by what are represented,
directly or by implication, to be ``actual consumers'' should utilize
actual consumers in both the audio and video, or clearly and
conspicuously disclose that the persons in such advertisements are not
actual consumers of the advertised product.
Example 1: A brochure for a baldness treatment consists entirely of
testimonials from satisfied customers who say that after using the
product, they had amazing hair growth and their hair is as thick and
strong as it was when they were teenagers. The advertiser must have
competent and reliable scientific evidence that its product is
effective in producing new hair growth.
The ad will also likely communicate that the endorsers' experiences
are representative of what new users of the product can generally
expect. Therefore, even if the advertiser includes a disclaimer such
as, ``Notice: These testimonials do not prove our product works. You
should not expect to have similar results,'' the ad is likely to be
deceptive unless the advertiser has adequate substantiation that new
users typically will experience results similar to those experienced by
the testimonialists.
Example 2: An advertisement disseminated by a company that sells
heat pumps presents endorsements from three individuals who state that
after installing the company's heat pump in their homes, their monthly
utility bills went down by $100, $125, and $150, respectively. The ad
will likely be interpreted as conveying that such savings are
representative of what consumers who buy the company's heat pump can
generally expect. The advertiser does not have substantiation for that
representation because, in fact, less than 20% of purchasers will save
$100 or more. A disclosure such as, ``Results not typical'' or, ``These
testimonials are based on the experiences of a few people and you are
not likely to have similar results'' is insufficient to prevent this ad
from being deceptive because consumers will still interpret the ad as
conveying that the specified savings are representative of what
consumers can generally expect. The ad is less likely to be deceptive
if it clearly and conspicuously discloses the generally expected
savings and the advertiser has adequate substantiation that homeowners
can achieve those results. There are multiple ways that such a
disclosure could be phrased, e.g., ``the average homeowner saves $35
per month,'' ``the typical family saves $50 per month during cold
months and $20 per month in warm months,'' or ``most families save 10%
on their utility bills.''
Example 3: An advertisement for a cholesterol-lowering product
features an individual who claims that his serum cholesterol went down
by 120 points and does not mention having made any lifestyle changes. A
well-conducted clinical study shows that the product reduces the
cholesterol levels of individuals with elevated cholesterol by an
average of 15% and the advertisement clearly and conspicuously
discloses this fact. Despite the presence of this disclosure, the
advertisement would be deceptive if the advertiser does not have
adequate substantiation that the product can produce the specific
results claimed by the endorser (i.e., a 120-point drop in serum
cholesterol without any lifestyle changes).
Example 4: An advertisement for a weight-loss product features a
formerly obese woman. She says in the ad, ``Every day, I drank 2
WeightAway shakes, only ate raw vegetables, and exercised vigorously
for six hours at the gym. By the end of six months, I had gone from 250
pounds to 140 pounds.'' The advertisement accurately describes the
woman's experience, and such a
[[Page 72393]]
result is within the range that would be generally experienced by an
extremely overweight individual who consumed WeightAway shakes, only
ate raw vegetables, and exercised as the endorser did. Because the
endorser clearly describes the limited and truly exceptional
circumstances under which she achieved her results, the ad does not
convey that consumers who weigh substantially less or use WeightAway
under less extreme circumstances should generally expect to lose
something in the vicinity of 110 pounds in six months. The advertiser
must have substantiation, however, for any performance claims conveyed
by the endorsement (e.g., that WeightAway is an effective weight loss
product).
If, in the alternative, the advertisement simply says that the
endorser lost 110 pounds in six months using WeightAway together with
diet and exercise, the advertisement would likely convey that her
results were representative of what consumers can generally expect to
lose with WeightAway.
Example 5: An advertisement presents the results of a poll of
consumers who have used the advertiser's cake mixes as well as their
own recipes. The results purport to show that the majority believed
that their families could not tell the difference between the
advertised mix and their own cakes baked from scratch. Many of the
consumers are actually pictured in the advertisement along with
relevant, quoted portions of their statements endorsing the product.
This use of the results of a poll or survey of consumers represents
that this is the typical result that ordinary consumers can expect from
the advertiser's cake mix.
Example 6: An advertisement purports to portray a ``hidden camera''
situation in a crowded cafeteria at breakfast time. A spokesperson for
the advertiser asks a series of actual patrons of the cafeteria for
their spontaneous, honest opinions of the advertiser's recently
introduced breakfast cereal. Even though the words ``hidden camera''
are not displayed on the screen, and even though none of the actual
patrons is specifically identified during the advertisement, the net
impression conveyed to consumers may well be that these are actual
customers, and not actors. If actors have been employed, this fact
should be clearly and conspicuously disclosed.
Example 7: An advertisement for a recently released motion picture
shows three individuals coming out of a theater, each of whom gives a
positive statement about the movie. These individuals are actual
consumers expressing their personal views about the movie. The
advertiser does not need to have substantiation that their views are
representative of the opinions that most consumers will have about the
movie because this advertisement is not likely to convey a typicality
message.
If the motion picture studio had approached these individuals
outside the theater and offered them free tickets if they would talk
about the movie on camera afterwards, that arrangement should be
clearly and conspicuously disclosed. [See Sec. 255.5.]
Sec. 255.3 Expert endorsements.
(a) Whenever an advertisement represents, directly or by
implication, that the endorser is an expert with respect to the
endorsement message, then the endorser's qualifications must in fact
give the endorser the expertise that he or she is represented as
possessing with respect to the endorsement.
(b) Although the expert may, in endorsing a product, take into
account factors not within his or her expertise (e.g., matters of taste
or price), the endorsement must be supported by an actual exercise of
that expertise in evaluating product features or characteristics with
respect to which he or she is expert and which are relevant to an
ordinary consumer's use of or experience with the product and are
available to the ordinary consumer. This evaluation must have included
an examination or testing of the product at least as extensive as
someone with the same degree of expertise would normally need to
conduct in order to support the conclusions presented in the
endorsement. To the extent that the advertisement implies that the
endorsement was based upon a comparison, such comparison must have been
included in the expert's evaluation; and as a result of such
comparison, the expert must have concluded that, with respect to those
features on which he or she is expert and which are relevant and
available to an ordinary consumer, the endorsed product is at least
equal overall to the competitors' products. Moreover, where the net
impression created by the endorsement is that the advertised product is
superior to other products with respect to any such feature or
features, then the expert must in fact have found such superiority.
[See Sec. 255.1(d) regarding the liability of endorsers.]
Example 1: An endorsement of a particular automobile by one
described as an ``engineer'' implies that the endorser's professional
training and experience are such that he is well acquainted with the
design and performance of automobiles. If the endorser's field is, for
example, chemical engineering, the endorsement would be deceptive.
Example 2: An endorser of a hearing aid is simply referred to as
``Doctor'' during the course of an advertisement. The ad likely implies
that the endorser is a medical doctor with substantial experience in
the area of hearing. If the endorser is not a medical doctor with
substantial experience in audiology, the endorsement would likely be
deceptive. A non-medical ``doctor'' (e.g., an individual with a Ph.D.
in exercise physiology) or a physician without substantial experience
in the area of hearing can endorse the product, but if the endorser is
referred to as ``doctor,'' the advertisement must make clear the nature
and limits of the endorser's expertise.
Example 3: A manufacturer of automobile parts advertises that its
products are approved by the ``American Institute of Science.'' From
its name, consumers would infer that the ``American Institute of
Science'' is a bona fide independent testing organization with
expertise in judging automobile parts and that, as such, it would not
approve any automobile part without first testing its efficacy by means
of valid scientific methods. If the American Institute of Science is
not such a bona fide independent testing organization (e.g., if it was
established and operated by an automotive parts manufacturer), the
endorsement would be deceptive. Even if the American Institute of
Science is an independent bona fide expert testing organization, the
endorsement may nevertheless be deceptive unless the Institute has
conducted valid scientific tests of the advertised products and the
test results support the endorsement message.
Example 4: A manufacturer of a non-prescription drug product
represents that its product has been selected over competing products
by a large metropolitan hospital. The hospital has selected the product
because the manufacturer, unlike its competitors, has packaged each
dose of the product separately. This package form is not generally
available to the public. Under the circumstances, the endorsement would
be deceptive because the basis for the hospital's choice--convenience
of packaging-- is neither relevant nor available to consumers, and the
basis for the hospital's decision is not disclosed to consumers.
Example 5: A woman who is identified as the president of a
commercial ``home cleaning service''
[[Page 72394]]
states in a television advertisement that the service uses a particular
brand of cleanser, instead of leading competitors it has tried, because
of this brand's performance. Because cleaning services extensively use
cleansers in the course of their business, the ad likely conveys that
the president has knowledge superior to that of ordinary consumers.
Accordingly, the president's statement will be deemed to be an expert
endorsement. The service must, of course, actually use the endorsed
cleanser. In addition, because the advertisement implies that the
cleaning service has experience with a reasonable number of leading
competitors to the advertised cleanser, the service must, in fact, have
such experience, and, on the basis of its expertise, it must have
determined that the cleaning ability of the endorsed cleanser is at
least equal (or superior, if such is the net impression conveyed by the
advertisement) to that of leading competitors' products with which the
service has had experience and which remain reasonably available to it.
Because in this example the cleaning service's president makes no
mention that the endorsed cleanser was ``chosen,'' ``selected,'' or
otherwise evaluated in side-by-side comparisons against its
competitors, it is sufficient if the service has relied solely upon its
accumulated experience in evaluating cleansers without having performed
side-by-side or scientific comparisons.
Example 6: A medical doctor states in an advertisement for a drug
that the product will safely allow consumers to lower their cholesterol
by 50 points. If the materials the doctor reviewed were merely letters
from satisfied consumers or the results of a rodent study, the
endorsement would be deceptive assuming that those materials are not
what others with the same degree of expertise would consider adequate
to support this conclusion about the product's safety and efficacy.
Sec. 255.4 Endorsements by organizations.
Endorsements by organizations, especially expert ones, are viewed
as representing the judgment of a group whose collective experience
exceeds that of any individual member, and whose judgments are
generally free of the sort of subjective factors that vary from
individual to individual. Therefore, an organization's endorsement must
be reached by a process sufficient to ensure that the endorsement
fairly reflects the collective judgment of the organization. Moreover,
if an organization is represented as being expert, then, in conjunction
with a proper exercise of its expertise in evaluating the product under
Sec. 255.3 (expert endorsements), it must utilize an expert or experts
recognized as such by the organization or standards previously adopted
by the organization and suitable for judging the relevant merits of
such products. [See Sec. 255.1(d) regarding the liability of
endorsers.]
Example: A mattress seller advertises that its product is endorsed
by a chiropractic association. Because the association would be
regarded as expert with respect to judging mattresses, its endorsement
must be supported by an evaluation by an expert or experts recognized
as such by the organization, or by compliance with standards previously
adopted by the organization and aimed at measuring the performance of
mattresses in general and not designed with the unique features of the
advertised mattress in mind. (See also Sec. 255.3, Example 5.)
Sec. 255.5 Disclosure of material connections.
When there exists a connection between the endorser and the seller
of the advertised product that might materially affect the weight or
credibility of the endorsement (i.e., the connection is not reasonably
expected by the audience), such connection must be fully disclosed. For
example, when the endorser is neither represented in the advertisement
as an expert nor is known to a significant portion of the viewing
public, then the advertiser should clearly and conspicuously disclose
either the payment or promise of compensation prior to and in exchange
for the endorsement or the fact that the endorser knew or had reasons
to know or to believe that if the endorsement favors the advertised
product some benefit, such as an appearance on TV, would be extended to
the endorser. Additional guidance concerning endorsements by
celebrities and experts is provided by the examples below.
Example 1: A drug company commissions research on its product by an
outside organization. The drug company determines the overall subject
of the research (e.g., to test the efficacy of a newly developed
product) and pays a substantial share of the expenses of the research
project, but the research organization determines the protocol for the
study and is responsible for conducting it. A subsequent advertisement
by the drug company mentions the research results as the ``findings''
of that research organization. Where, as here, the design and conduct
of the research project are controlled by the outside research
organization, the weight consumers place on the reported results would
not likely be materially affected by knowing that the advertiser had
funded the project. Therefore, the advertiser's payment of expenses to
the research organization need not be disclosed in this advertisement.
Example 2: A film star endorses a particular food product. The
endorsement regards only points of taste and individual preference.
This endorsement must, of course, comply with Sec. 255.1; but
regardless of whether the star's compensation for the commercial is a
$1 million cash payment or a royalty for each product sold by the
advertiser during the next year, no disclosure is required because such
payments likely are ordinarily expected by viewers.
Example 3: During an appearance by a well-known professional tennis
player on a television talk show, the host comments that the past few
months have been the best of her career and during this time she has
risen to her highest level ever in the rankings. She responds by
attributing the improvement in her game to the fact that she is seeing
the ball better than she used to, ever since having laser vision
correction surgery at a clinic that she identifies by name. She
continues talking about the ease of the procedure, the kindness of the
clinic's doctors, her speedy recovery, and how she can now engage in a
variety of activities without glasses, including driving at night. The
athlete does not disclose that, even though she does not appear in
commercials for the clinic, she has a contractual relationship with it,
and her contract pays her for speaking publicly about her surgery when
she can do so. Consumers would not expect that a celebrity discussing a
medical procedure in a television interview to be paid for doing so,
and knowledge of such payments would likely affect the weight or
credibility consumers give to the celebrity's endorsement. Without a
clear and conspicuous disclosure that the athlete has been engaged as a
spokesperson for the clinic, this endorsement is likely to be
deceptive. Furthermore, if consumers are likely to take away from her
story that her experience was typical of those who undergo the same
procedure at the clinic, the advertiser must have substantiation for
that claim.
Assume that during that same appearance, the tennis player is
wearing clothes bearing the insignia of an athletic wear company with
whom she also has an endorsement contract. Although this contract
requires that she wear the company's clothes not only on the court but
also in public appearances,
[[Page 72395]]
when possible, she does not mention them or the company during her
appearance on the show. No disclosure is required because no
representation is being made about the clothes in this context.
Example 4: An ad for an anti-snoring product features a physician
who says that he has seen dozens of products come on the market over
the years and, in his opinion, this is the best ever. Consumers would
expect the physician to be reasonably compensated for his appearance in
the ad. Consumers are unlikely, however, to expect that the physician
receives a percentage of gross product sales or that he owns part of
the company, and either of these facts would likely materially affect
the credibility that consumers attach to the endorsement. Accordingly,
the advertisement should clearly and conspicuously disclose such a
connection between the company and the physician.
Example 5: An actual patron of a restaurant, who is neither known
to the public nor presented as an expert, is shown seated at the
counter. He is asked for his ``spontaneous'' opinion of a new food
product served in the restaurant. Assume, first, that the advertiser
had posted a sign on the door of the restaurant informing all who
entered that day that patrons would be interviewed by the advertiser as
part of its TV promotion of its new soy protein ``steak.'' This
notification would materially affect the weight or credibility of the
patron's endorsement, and, therefore, viewers of the advertisement
should be clearly and conspicuously informed of the circumstances under
which the endorsement was obtained.
Assume, in the alternative, that the advertiser had not posted a
sign on the door of the restaurant, but had informed all interviewed
customers of the ``hidden camera'' only after interviews were completed
and the customers had no reason to know or believe that their response
was being recorded for use in an advertisement. Even if patrons were
also told that they would be paid for allowing the use of their
opinions in advertising, these facts need not be disclosed.
Example 6: An infomercial producer wants to include consumer
endorsements for an automotive additive product featured in her
commercial, but because the product has not yet been sold, there are no
consumer users. The producer's staff reviews the profiles of
individuals interested in working as ``extras'' in commercials and
identifies several who are interested in automobiles. The extras are
asked to use the product for several weeks and then report back to the
producer. They are told that if they are selected to endorse the
product in the producer's infomercial, they will receive a small
payment. Viewers would not expect that these ``consumer endorsers'' are
actors who were asked to use the product so that they could appear in
the commercial or that they were compensated. Because the advertisement
fails to disclose these facts, it is deceptive.
Example 7: A college student who has earned a reputation as a video
game expert maintains a personal weblog or ``blog'' where he posts
entries about his gaming experiences. Readers of his blog frequently
seek his opinions about video game hardware and software. As it has
done in the past, the manufacturer of a newly released video game
system sends the student a free copy of the system and asks him to
write about it on his blog. He tests the new gaming system and writes a
favorable review. The readers of his blog are unlikely to expect that
he has received the video game system free of charge in exchange for
his review of the product, and given the value of the video game
system, this fact would likely materially affect the credibility they
attach to his endorsement. Accordingly, the blogger should clearly and
conspicuously disclose that he received the gaming system free of
charge.
Example 8: An online message board designated for discussions of
new music download technology is frequented by MP3 player enthusiasts.
They exchange information about new products, utilities, and the
functionality of numerous playback devices. Unbeknownst to the message
board community, an employee of a leading playback device manufacturer
has been posting messages on the discussion board promoting the
manufacturer's product. Knowledge of this poster's employment likely
would affect the weight or credibility of her endorsement. Therefore,
the poster should clearly and conspicuously disclose her relationship
to the manufacturer to members and readers of the message board.
Example 9: A young man signs up to be part of a ``street team''
program in which points are awarded each time a team member talks to
his or her friends about a particular advertiser's products. Team
members can then exchange their points for prizes, such as concert
tickets or electronics. These incentives would materially affect the
weight or credibility of the team member's endorsements. They should be
clearly and conspicuously disclosed, and the advertiser should take
steps to ensure that these disclosures are being provided.
VI. INVITATION TO COMMENT
The Commission invites interested members of the public to submit
written data, views, facts, and arguments addressing the issues raised
by this Notice, including the proposed changes to the Guides. Such
comments must be received by January 30, 2009, and must be filed in
accordance with the instructions in the ADDRESSES section of this
document.
List of Subjects in 16 C.F.R. Sec. 255
Advertising, Trade practices.
Authority: 15 U.S.C. 41-58.
By direction of the Commission.
Donald S. Clark
Secretary
[FR Doc. E8-28294 Filed 11-26-08: 8:45 am]
[BILLING CODE: 6750-01-S]