[Federal Register Volume 87, Number 142 (Tuesday, July 26, 2022)]
[Proposed Rules]
[Pages 44288-44306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-12327]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

16 CFR Part 255


Guides Concerning the Use of Endorsements and Testimonials in 
Advertising

AGENCY: Federal Trade Commission.

ACTION: Proposed changes to guides; request for comments.

-----------------------------------------------------------------------

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: Comments must be received on or before September 26, 2022.

ADDRESSES: Interested parties may file a comment online or on paper by 
following the instructions in the Invitation to Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Endorsement Guides; 
P204500'' on your comment and file your comment online at https://www.regulations.gov. If you prefer to file your comment on paper, mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex B), 
Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Michael Ostheimer (202-326-2699), 
[email protected], Attorney, Division of Advertising Practices, Bureau 
of Consumer Protection, Federal Trade Commission, Room CC-10603, 600

[[Page 44289]]

Pennsylvania Avenue NW, Washington, DC 20580.

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 CFR 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 under the 
law.
    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 CFR 255.0(b) and (c). The 
Guides state that endorsements must reflect the honest opinions, 
findings, beliefs, or experience of the endorser. 16 CFR 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 state that an advertisement presenting 
consumer endorsements about the performance of an advertised product 
will be interpreted as representing that the product is effective for 
the purpose depicted in the advertisement. 16 CFR 255.2(a). They 
further 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 CFR 255.2(b). If an advertiser 
does not have adequate substantiation that the endorser's experience is 
representative, the advertisement should clearly and conspicuously 
disclose what the generally expected performance would be in the 
depicted circumstances. 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 CFR 255.0(e). 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 CFR 255.3(a). Moreover, 
an expert endorsement must be supported by an actual exercise of that 
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 need to conduct in order to support the conclusions presented. 
16 CFR 255.3(b).
    The Guides advise that 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 CFR 255.5.
    Among other things, the Guides also state that: (1) 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, 16 CFR 255.1(c); (2) 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; and endorsers also may be liable for 
statements made in the course of their endorsements, 16 CFR 255.1(d); 
(3) 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 
CFR 255.2(c); and (4) 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 CFR 255.4.

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 FR 25548 (Dec. 1, 1972). Interested parties submitted 
extensive comment. On May 21, 1975, the Commission promulgated, under 
the Federal Trade Commission Act (``FTC Act''), 15 U.S.C. 41-58, three 
sections of the 1972 proposal as final guidelines (16 CFR 255.0, 255.3 
and 255.4) and republished three others, in modified form, for 
additional public comment. 40 FR 22127 (May 21, 1975). The Commission 
received public comment 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 CFR 255.1, 255.2 
and 255.5) and modified an example to one of the final guidelines 
adopted in May 1975 (16 CFR 255.0 Example 4). 45 FR 3870 (Jan. 18, 
1980).
    As part of its periodic regulatory review, the Commission sought 
public comment on the Endorsement Guides in January 2007. 72 FR 2214 
(Jan. 18, 2007). In November 2008, the Commission discussed the 
comments it received in 2007, proposed certain revisions to the Guides, 
and requested comment on those proposed revisions. 73 FR 72374 (Nov. 
28, 2008). In October 2009, the Commission substantively amended the 
Guides, adding what are now 16 CFR 255.0(a), 255.1(d) and 255.2(a), 
significantly modifying the guidance in 16 CFR 255.0(b), and modifying 
or adding numerous examples. 74 FR 53124 (Oct. 15, 2009).
    In February 2020, again 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 the Guides as well as a number of specific questions focused 
on the material connections section of the Guides (16 CFR 255.5). 85 FR 
10104 (Feb. 21, 2020). In light of the disruption caused by the 
Coronavirus pandemic, the Commission extended the comment period for 
two months. 85 FR 19709 (Apr. 8, 2020).

III. Overview of Comments Received in Response to Regulatory Review 
Notice

    The Commission received 108 unique substantive comments in response 
to its regulatory review notice.\1\ Having

[[Page 44290]]

considered those comments and its own extensive consumer protection 
experience, the Commission now proposes various amendments to the 
Guides and invites comments on these proposed changes.
---------------------------------------------------------------------------

    \1\ Approximately seventy-five comments were submitted by 
individual consumers, most of whom were apparently university 
students fulfilling class assignments. The remaining commenters 
were: American Influencer Council, Inc. (``AIC''); American 
Financial Services Association (``AFSA''); Amazon.com, Inc. 
(``Amazon''); Association of National Advertisers (``ANA''); BBB 
National Programs (``BBB''); Shirley Boyd, Esq. (``Boyd''); Campaign 
for a Commercial Free-Childhood and Center for Digital Democracy 
(``CCFC''); Competition and Markets Authority (``CMA''); Consumer 
Reports; Council for Responsible Nutrition (``CRN''); Common Sense 
Media (``CSM''); Consumer World (``CW''); Digital Content Next 
(``DCN''); Esports Bar Association (``Esports Bar''); Entertainment 
Software Association (``ESA''); Prof. Chris Jay Hoofnagle 
(``Hoofnagle''); Interactive Advertising Bureau (``IAB''); Jim 
Dudukovich, Esq. (``Dudukovich''); IZEA Worldwide, Inc. (``IZEA''); 
Kleinfeld, Kaplan and Becker LLP (``KK&B''); LEGO Group (``LEGO''); 
Maastricht University (``Maastricht''); Association of Magazine 
Media (``MPA''); North American Insulation Manufacturers Association 
(``NAIMA''); internet and Television Association (``NCTA''); 
NetChoice; News Media Alliance (``NMA''); National Retail Federation 
(``NRF''); Performance-Driven Marketing Institute (``PDMI''); 
Pharmavite LLC (``Pharmavite''); Performance Marketing Association 
(``PMA''); Princeton University Center for Information Technology 
Policy and University of Chicago Department of Computer Science 
researchers (``Princeton''); SuperAwesome; and Truth in Advertising, 
Inc. (``TINA''). The comments are available online at https://beta.regulations.gov/document/FTC-2020-0017-0001/comment.
---------------------------------------------------------------------------

    Most commenters noted that the Guides are beneficial and should be 
retained,\2\ and none disagreed. Some comments praised the current 
Guides for striking an appropriate balance between protecting consumers 
and allowing advertisers to communicate creatively and effectively to 
potential customers.\3\
---------------------------------------------------------------------------

    \2\ See, e.g., Amazon at 3; ANA at 1-3; BBB at 2; CRN at 1; DCN 
at 1; Dudukovich at 3; Esports Bar at 2-3; ESA at 2; IAB at 1-2; 
IZEA at 1; LEGO at 1; MPA at 2; NAIMA at 1-2; NCTA at 1-2; NMA at 2; 
and Pharmavite at 1.
    \3\ See, e.g., Amazon at 3; ESA at 2; IAB at 2-3; MPA at 2; NCTA 
at 1-2; and PDMI at 2.
---------------------------------------------------------------------------

    Most comments responded to specific questions the Commission posed 
in the February 2020 Federal Register notice about certain provisions 
of the current Guides. Those comments are discussed in Part IV, below, 
in the context of the specific Guide provisions to which they relate.
    In addition, some comments addressed other issues. For example, 
some commenters said that the Commission should engage in more vigorous 
enforcement activities related to the Guides \4\ and greater 
educational efforts.\5\ Other commenters weighed in on whether the 
Commission should \6\ or should not \7\ engage in a rulemaking 
proceeding to convert some principles in the Guides into trade 
regulation rules.
---------------------------------------------------------------------------

    \4\ See, e.g., Boyd at 5-6, 16; Consumer Reports at 2; IZEA at 
1; NRF at 14; and TINA at 22-23.
    \5\ See, e.g., AIC at 4-5; Amazon at 3; Dudukovich at 6; and IAB 
at 3.
    \6\ See, e.g., Boyd at 5-7; Natalie Jacobwith at 3.
    \7\ See, e.g., MPA at 4, 7-8; and NRF at 14.
---------------------------------------------------------------------------

    Some comments urged the Commission to encourage social media 
platforms to improve or standardize the built-in tools that some of 
them offer to facilitate disclosures of material connections by 
platform users.\8\ The Commission supports development of effective, 
built-in disclosure tools but is concerned that some of the existing 
ones are too poorly contrasting, fleeting, or small, or may be placed 
in locations where they do not catch the user's attention. For example, 
a social media disclosure tool that superimposes a disclosure over a 
posted picture could be poorly contrasting, making the disclosure 
inadequate, especially if the picture is only displayed for a few 
seconds and contains competing text or other information. Similarly, a 
disclosure tool that superimposes a small disclosure in the bottom left 
corner of a video for only a few seconds is inconspicuous. Even a tool 
that employs a disclosure of sufficient size, duration, and contrast 
could be inadequate if it is displayed above, rather than below, a 
picture or video that catches the attention of users scrolling through 
their feeds. Platforms may be exposing endorsers to liability if users 
rely solely on a platform's inadequate tools for their disclosures. 
Platforms may also be exposing themselves to liability depending on the 
representations they make about these tools. Given that platforms play 
a major role in disseminating and monetizing endorsements, and actively 
encourage endorsers to promote and amplify their posts, the Commission 
believes they should carefully evaluate their tools and what they say 
about them to ensure they are not exposing themselves or their users to 
liability.
---------------------------------------------------------------------------

    \8\ See, e.g., AFSA at 2; AIC at 2-3; ANA at 5-6; Dudukovich at 
11-12; IAB at 4; NCTA at 9; NRF at 9; PMA at 2; and Princeton at 5; 
see also CMA at 3.
---------------------------------------------------------------------------

IV. Section-by-Section Discussion of Proposed Revisions to Guides, 
Comments Received in Response to February 2020 Federal Register Notice, 
and Requests for Additional Comment

    The Commission believes the Guides should be retained but 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 not expressly set 
forth in the current Guides but are 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 February 2020 Federal Register notice. Some of the new 
examples and updates to existing examples reflect the extent to which 
advertisers have turned increasingly to the use of social media and 
product reviews to market their products.
    The Commission seeks comments on these proposed revisions, which 
are discussed below by Section.\9\
---------------------------------------------------------------------------

    \9\ Non-substantive changes to improve readability or to update 
examples to reflect changes in marketing methods, technology, or 
society that have occurred since the Guides were last updated or 
since they were first written (e.g., replacing ``brochure'' with 
``web page'') are not discussed below.
---------------------------------------------------------------------------

A. Sec.  255.0--Purpose and Definitions

    The Guides currently begin with a purpose and definitions section.
    Current Sec.  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. As suggested in a comment, the Commission 
proposes revising that definition to clarify that ``marketing'' and 
``promotional'' messages can be endorsements.\10\ When a social media 
user tags a brand in a post, it generally communicates that the poster 
uses or likes the brand, so, the revised definition would also indicate 
that tags in social media posts can be endorsements. Section 255.0(b) 
also currently states that an ``endorser'' may be an individual, group, 
or institution. The Commission proposes a modification indicating that 
an endorser could instead simply appear to be an individual, group, or 
institution. Thus, the Guides would clearly apply to endorsements by 
fabricated endorsers.
---------------------------------------------------------------------------

    \10\ See Boyd at 7.
---------------------------------------------------------------------------

    The Commission proposes to add a footnote to Sec.  255.0(b). It 
would indicate the availability of detailed staff business guidance 
regarding endorsements that is updated periodically, while noting that 
such staff guidance is not approved by or binding upon the Commission. 
Numerous commenters asked the Commission to update the Guides more 
frequently, such as every three years.\11\ Some commenters asked that 
the Commission provide detailed guidance in the Guides about acceptable 
and unacceptable language and placement for disclosures of material 
connections and their use on particular platforms,\12\ while others 
asked the Commission to continue to allow marketers flexibility in the 
crafting and placement of necessary disclosures.\13\ Commenters also 
differed on whether to incorporate FTC staff business guidance into the 
Guides, with some saying it would be useful \14\ and others taking the 
position that the social media landscape is ever-changing and the 
Guides should focus on general principles.\15\ One commenter

[[Page 44291]]

suggested cross-referencing staff guidance in the Guides.\16\ The 
Commission believes that its current approach for endorsement-related 
guidance makes sense, with the Guides focused on general principles and 
examples, and the more informal and easily updated staff guidance 
focused on specific questions and issues that arise in this area. The 
new footnote would ensure that people reading the Guides are aware of 
this additional staff guidance.
---------------------------------------------------------------------------

    \11\ See, e.g., AIC at 1, 3; and Pharmavite at 2.
    \12\ See, e.g., CRN at 2-4; Pharmavite at 1-2; PMA at 2; and 
Anna Keltner at 3.
    \13\ See, e.g., ESA at 5-6; IAB at 2-3; and MPA at 6-7.
    \14\ See, e.g., Consumer Reports at 9; CRN at 2; Dudukovich at 
9; Pharmavite at 1-2; and TINA at 12.
    \15\ See, e.g., ANA at 3; BBB at 3; and NCTA at 2.
    \16\ See TINA at 12.
---------------------------------------------------------------------------

    Current Sec.  255.0(d) defines a ``product'' as any product, 
service, company or industry. At the suggestion of a commenter,\17\ the 
Commission proposes modifying the definition to clarify that a 
``product'' includes a ``brand.''
---------------------------------------------------------------------------

    \17\ See Boyd at 7.
---------------------------------------------------------------------------

    In response to comments requesting further guidance on what 
constitutes a clear and conspicuous disclosure, the Commission proposes 
adding a new definition of ``clear and conspicuous'' in a new Sec.  
255.0(f). It would define a ``clear and conspicuous'' disclosure as a 
disclosure that ``is difficult to miss (i.e., easily noticeable) and 
easily understandable by ordinary consumers.'' It would give specific 
guidance with respect to visual and audible disclosures, stress the 
importance of ``unavoidability'' when the communication involves social 
media or the internet, and say that the disclosure should not be 
contradicted or mitigated by, or inconsistent with, anything in the 
communication. While not mandating that a disclosure be both visual and 
audible under all circumstances, it would say that when the triggering 
claim is visual the disclosure should be at least visual; that when the 
triggering claim is audible, the disclosure should be at least audible; 
that when the triggering claim is both visual and audible, the 
disclosure should be both; and that a simultaneous audible and visual 
disclosure is more likely to be clear and conspicuous. Finally, the 
proposed definition notes that when an endorsement targets a specific 
audience, such as older adults, its effectiveness will be evaluated 
from the perspective of members of that group.
    Example 1 to Sec.  255.0 currently provides an example of an 
endorsement and illustrates the principle that an endorsement may not 
be presented out of context or reworded so as to distort the endorser's 
opinion. One commenter noted that it was unclear in the example who 
distorted the endorser's opinion.\18\ The Commission proposes to modify 
the example to clearly identify the responsible party.
---------------------------------------------------------------------------

    \18\ See Dudukovich at 17.
---------------------------------------------------------------------------

    Current Example 5 to Sec.  255.0 involves a television 
advertisement in which a professional golfer implicitly endorses a 
brand of golf balls by being shown practicing her swing using the 
balls, even though she says nothing in the ad. The Commission proposes 
expanding this example to illustrate that use of the same video footage 
in a social media post can be an endorsement as long as the endorsed 
brand is tagged or otherwise readily identifiable by viewers.
    Example 6 to Sec.  255.0 currently illustrates how a paid actor 
hosting a product infomercial and reading from a script can still be 
making an endorsement. The Commission proposes adding a scenario to 
this example to show how the same actor can talk about the product 
without making an endorsement and deleting Example 7, which had also 
focused on illustrating statements that were not endorsements.
    Example 8 to Sec.  255.0, which would be renumbered as Example 7, 
currently provides scenarios in which an individual consumer's social 
media posts would and would not be considered endorsements. Two 
commenters asked for further explanation of the Commission's 
reasoning.\19\ The Commission proposes to clarify the example. When a 
consumer buys the product with her own money under ordinary 
circumstances and chooses to post about it, the post is not an 
endorsement under the Guides because the consumer has no connection to 
the manufacturer beyond being an ordinary purchaser and her message 
cannot be attributed to the product's manufacturer. The revised example 
would note that the same would be true for a consumer review. 
Furthermore, if the consumer received a coupon for a free trial product 
from the manufacturer simply based upon her purchase history and if the 
manufacturer did not ask coupon recipients for reviews, then the 
consumer's unsolicited review would not be an endorsement because it 
cannot be attributed to the manufacturer. However, if the consumer 
received the free product as part of a marketing program that 
periodically provides free products from various manufacturers, where 
the consumer has the option of writing a review, the consumer's review 
would be an endorsement because of her connection to the manufacturer 
through the marketing program.
---------------------------------------------------------------------------

    \19\ See ANA at 8-9; and Dudukovich at 17-18.
---------------------------------------------------------------------------

    The Commission proposes adding six new examples to this section. 
New Example 8 would illustrate an endorsement made through video game 
play streamed on social media without an express product 
recommendation. New Example 9 illustrates disclosures that are easily 
missed and thus are not clear and conspicuous. New Examples 10 and 11 
illustrate how a disclosure may need to be evaluated from the 
perspective of an advertisement's target audience and that disclosures 
need to be clear and conspicuous on multiple common types of platforms 
or devices.
    New Example 12 derives in part from a commenter's suggestion that 
the Guides address an incentivized endorser denigrating a competitor's 
product.\20\ The example would state that a fake negative review or 
another paid or incentivized negative statement about a competitor's 
service does not meet the definition of an ``endorsement.'' It would 
note, however, that engaging in such disparagement can be a deceptive 
practice.
---------------------------------------------------------------------------

    \20\ See NAIMA at 5; see also Consumer Reports at 4.
---------------------------------------------------------------------------

    New Example 13 derives from a commenter's suggestion that the 
Guides state, as alleged in FTC v. Devumi, LLC,\21\ that it is illegal 
to sell, purchase, or use bots or other fake social media accounts to 
market goods and services.\22\ Because such indicators do not express 
an advertising message by their mere presence, the example would 
acknowledge that an endorser's use of fake indicators of social media 
influence is not itself an endorsement issue. The Commission would note 
in the example that it is a deceptive practice for users of social 
media to purchase or create indicators of social media influence and 
then use them to misrepresent their influence for a commercial purpose 
and that it is a deceptive practice to sell or distribute such 
indicators to such users.
---------------------------------------------------------------------------

    \21\ See Complaint at 5, FTC v. Devumi, LLC, No. 9:19-cv-81419-
RKA (S.D. Fla. Oct. 18, 2019), https://www.ftc.gov/system/files/documents/cases/devumi_complaint.pdf.
    \22\ See Consumer Reports at 9.
---------------------------------------------------------------------------

B. Sec.  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 they may not convey any representation 
that would be deceptive if made directly by the advertiser).
    Section 255.1(d) currently recognizes 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 Commission would indicate that an 
advertiser may be liable for an

[[Page 44292]]

endorser's deceptive statement even when the endorser is not liable. 
The Commission also proposes adding guidance to this subsection on what 
actions advertisers should take with respect to their endorsers. Such 
guidance previously only appeared in an example.
    Current Sec.  255.1(d) also recognizes that endorsers themselves 
may be subject to liability for their statements. Commenters asked for 
clarification of when endorsers would be liable.\23\ The Commission 
proposes moving the discussion of endorser liability to a new Sec.  
255.1(e) and indicating that endorsers may be liable for their 
statements such as when they make representations that they know or 
should know to be deceptive. The level of due diligence required by the 
endorsers will depend on their level of expertise and knowledge, among 
other factors. Current Examples 3 and 4 involve endorsers who knew or 
should have known that their statements were deceptive. Section 
255.1(e) would also say that a non-expert endorser may also be liable 
when the endorser makes misleading or unsubstantiated representations 
about performance or efficacy that are inconsistent with the endorser's 
personal experience or that were not made or approved by the advertiser 
and that go beyond the scope of the endorser's personal experience.\24\ 
Current Example 5 involves such an endorser and the Commission proposes 
updating it to better illustrate this principle. Finally, Sec.  
255.1(e) would also note that endorsers may also be liable for failing 
to disclose unexpected material connections between themselves and an 
advertiser, such as when they create and disseminate endorsements 
without such disclosures.
---------------------------------------------------------------------------

    \23\ See, e.g., Boyd at 13; and Dudukovich at 18.
    \24\ The Commission would add a cross-reference to Sec.  255.3 
with respect to the responsibilities of an expert endorser.
---------------------------------------------------------------------------

    A few commenters suggested that the Guides deal with the disclosure 
responsibility of intermediaries such as marketing and public relations 
firms.\25\ The Commission proposes adding a new Sec.  255.1(f) 
explaining the potential liability of intermediaries. Intermediaries, 
such as advertising agencies and public relations firms, may be liable 
for their roles in disseminating what they knew or should have known 
were deceptive endorsements.\26\ For example, advertising agencies that 
intentionally engage in deception or that ignore obvious shortcomings 
of claims they disseminate may be liable. They may also be liable for 
their roles with respect to endorsements that fail to disclose 
unexpected material connections, whether by disseminating 
advertisements without necessary disclosures of material connection or 
by hiring and directing the endorsers who fail to make necessary 
disclosures.\27\
---------------------------------------------------------------------------

    \25\ See, e.g., Boyd at 13; and Maastricht at 7-8.
    \26\ See Complaint at 6, 8, 12-12, 20, FTC v. Marketing 
Architects, Inc., No. 2:18-cv-00050 (D. Me. Feb. 6, 2018), https://www.ftc.gov/system/files/documents/cases/1623101marketingarchitectscomplaint.pdf (defendant advertising 
agency created and disseminated fictitious weight-loss 
testimonials).
    \27\ See Complaint at 2-5, In the Matter of Machinima, Inc., No. 
C-4569 (Sept. 2, 2015), https://www.ftc.gov/system/files/documents/cases/160317machinimacmpt.pdf. (respondent recruited, hired, and 
instructed influencers on behalf of an advertiser, but did not 
require the influencers to disclose compensation).
---------------------------------------------------------------------------

    The Commission proposes adding a new Sec.  255.1(g) stating a 
general principle that the use of an endorsement with the image or 
likeness of a person other than the actual endorser is deceptive if it 
misrepresents a material attribute of the endorser.
    The Commission proposes modifying current Example 1 to Sec.  255.1 
to note that an endorser does not need to go back and modify or delete 
past social media posts as long as the posts were not misleading when 
they were made and the dates of the posts are clear and conspicuous to 
viewers. However, the example would state that if the post was later 
reposted by the endorser or shared by the publisher, it would suggest 
to reasonable consumers that the endorser continued to hold the views 
expressed in the prior post.
    The Commission proposes deleting current Example 2 to Sec.  255.1 
because it is patently obvious that a person asked to try unmarked 
products and pick the best one is not communicating that she or he is a 
regular user of the selected product. The Commission proposes to 
replace that example with one that illustrates when an endorsement 
would likely communicate regular use and ownership.
    The Commission proposes editing current Example 3 to Sec.  255.1 to 
indicate that a paid endorser and the company paying the endorser are 
both potentially liable for the endorser's social media post that fails 
to disclose the endorser's relationship to the company. The Commission 
proposes altering the example and adding a new cross-reference in this 
example to the Guides' material connection provisions (Sec.  255.5) to 
make clear that those provisions apply to paid consultants and not just 
employees or those hired to be endorsers. The Commission also proposes 
adding alternative language to the example illustrating how the 
advertiser could be liable when the endorser is not liable.
    The Commission proposes adding new Examples 6 and 7 to illustrate 
the principle in new Sec.  255.1(g) involving the use of an image or 
likeness of a person other than the actual endorser to misrepresent a 
material attribute of the endorser. These examples involve endorsements 
for an acne product using an image of a person with much better skin 
than the actual endorser, a weight-loss product with an image of a 
person weighing much less than the actual endorser, and a learn-to-read 
program with a picture of a significantly younger child than the child 
of the endorser.

C. Sec.  255.2--Consumer Endorsements

    Section 255.2 of the Guides provides guidance specific to the use 
of consumer endorsements, commonly referred to as testimonials.
    Current Sec.  255.2(a) addresses the need for adequate 
substantiation for claims made through endorsements. The Commission 
proposes clarifying that this need for substantiation applies to both 
express and implied claims.
    Current Sec.  255.2(b) states that when the advertiser does not 
have substantiation that an endorser's experience is representative of 
what consumers will generally achieve, an ad should clearly and 
conspicuously disclose the generally expected performance in the 
depicted circumstances. The Commission proposes adding a clarifying 
statement that the disclosure of the generally expected performance 
should be presented in a manner that does not itself misrepresent what 
consumers can expect.
    The Commission proposes adding a new Sec.  255.2(d) that addresses 
consumer reviews and articulates a fundamental principle not expressly 
set forth in the existing Guides. It would state that in procuring, 
suppressing, boosting, organizing, or editing consumer reviews of their 
products, advertisers should not take actions that have the effect of 
distorting or otherwise misrepresenting what consumers think of their 
products. It would also note that this is true regardless of whether 
the reviews are considered ``endorsements'' under the Guides.
    The Commission proposes to expand current Example 2 of Sec.  255.2 
so as to illustrate how a disclosure of expected results can be 
misleading when those results are only true under limited circumstances 
not clearly stated in the ad.
    Because current Example 3 of Sec.  255.2 involves serum cholesterol 
lowering claims, the Commission proposes replacing ``adequate 
substantiation''

[[Page 44293]]

with ``competent and reliable scientific evidence,'' the type of 
substantiation that would be required for such claims.
    Current Example 4 of Sec.  255.2 provides two examples of 
acceptable weight-loss disclosures of generally expected results under 
different circumstances, one where a testimonialist reports her weight 
loss over a certain period and one where the testimonialist reports her 
weight loss without specifying a time period. The Commission proposes 
editing those disclosures to make them more informative for 
consumers.\28\ The Commission would also add examples of two 
alternative disclosures that would be inadequate, one involving a 
disclosure of weight loss per week and the other involving a broad 
range of possible weight loss.
---------------------------------------------------------------------------

    \28\ Example 4 provides an example of a performance claim 
requiring substantiation--a claim that WeightAway is an effective 
weight loss product. The Commission proposes revising that exemplar 
to include the claim that the endorser's weight loss was not just 
due to her dietary restrictions and exercise regimen.
---------------------------------------------------------------------------

    Another proposed addition to Example 4 discusses and illustrates 
how outliers can substantially affect the average results such that a 
disclosure of generally expected results based upon a mean computation 
would be misleading and how, when such is the case, the disclosure 
could instead be based upon median results.
    The Commission would also add language to Example 4 illustrating a 
marketer's liability for procuring fake reviews that appear for its 
product on a third-party review website. The marketer is not only 
liable for procuring reviews that are not from bona fide users, but is 
also liable for any unsubstantiated claims made in those fake 
reviews.\29\
---------------------------------------------------------------------------

    \29\ See Complaint at 5-9, FTC v. Cure Encapsulations, Inc., No. 
1:19-cv-00982 (E.D.N.Y. Feb. 26, 2019), https://www.ftc.gov/system/files/documents/cases/quality_encapsulations_complaint_2-26-19.pdf.
---------------------------------------------------------------------------

    Finally, the Commission proposes adding an alternative scenario to 
Example 4 involving an advertisement for a weight-loss program. The 
addition would explain that a disclosure of typical weight loss limited 
to only successful participants in the program (e.g., only those who 
stuck with it for six months), ignoring participants who quit, would be 
inadequate.
    The Commission proposes four new examples to illustrate the 
proposed new Sec.  255.2(d).
    New Example 8 addresses an online seller suppressing or not 
publishing product reviews based upon their star ratings or their 
negative sentiments.\30\ The review portions of the seller's product 
pages are misleading as to purchasers' actual opinions of the products. 
The example would also provide examples of reviews that need not be 
published. The Commission would note that sellers are not required to 
display customer reviews that contain unlawful, harassing, abusive, 
obscene, vulgar, or sexually explicit content, or content that is 
inappropriate with respect to race, gender, sexuality, or ethnicity, or 
reviews that the seller reasonably believes are fake, so long as the 
criteria for withholding reviews are applied uniformly to all reviews 
submitted. The footnote would also note that sellers are not required 
to display reviews that are unrelated to their products or services and 
that ``services'' include customer service, delivery, returns, and 
exchanges. The Commission is particularly interested in consumer 
expectations regarding product reviews that are solely about related 
services. Do consumers expect that sellers publish such reviews that 
are just about a product's shipping or refund practices or the 
associated customer service together with other product reviews? 
Finally, the example illustrates that it would be deceptive for a 
seller to highlight glowing reviews and label them as ``most helpful'' 
if consumers had not actually voted them most helpful.
---------------------------------------------------------------------------

    \30\ See Complaint at 1-2, In the Matter of Fashion Nova, LLC, 
No. C-4759 (Mar. 18, 2022), http://www.ftc.gov/system/files/ftc_gov/pdf/1923138C4759FashionNovaComplaint.pdf.
---------------------------------------------------------------------------

    New Example 9 addresses paying purchasers to write positive product 
reviews.\31\ Such reviews are deceptive regardless of any disclosure of 
the payment, because the manufacturer has required that the reviews be 
positive. The proposed example has a cross-reference for when there is 
no requirement that the reviews be positive and the reviewers 
understand that they are free to write negative reviews without 
suffering any consequences.
---------------------------------------------------------------------------

    \31\ See Complaint at 8, In the Matter of UrthBox, Inc., No. C-
4676 (April 3, 2019), https://www.ftc.gov/system/files/documents/cases/172_3028_urthbox_complaint_4-3-19_0.pdf.
---------------------------------------------------------------------------

    New Example 10 addresses the unfair practice of threatening 
consumers who post negative reviews to third-party websites in order to 
coerce the consumers to delete their reviews. Such threats can take the 
form of legal,\32\ physical, or other threats. As noted in a new 
proposed footnote to the Guides, when the threats are incorporated into 
a form contract, they violate the Consumer Review Fairness Act. 15 
U.S.C. 45b(b)(1).
---------------------------------------------------------------------------

    \32\ See FTC v. Roca Labs, Inc., 345 F. Supp. 3d 1375, 1394-95 
(M.D. Fla. 2018).
---------------------------------------------------------------------------

    Several commenters suggested addressing review gating, i.e., 
practices that involve obtaining customer feedback and then sending 
satisfied and dissatisfied customers down different paths in order to 
encourage positive reviews and avoid negative reviews.\33\ New Example 
11 discusses a marketer soliciting feedback from all customers and only 
inviting those who give positive feedback to write online reviews. It 
says that such disparate treatment may be an unfair or deceptive 
practice if it results in the posted reviews being substantially more 
positive than if the marketer had not engaged in the practice.
---------------------------------------------------------------------------

    \33\ See, e.g., BBB at 5; Boyd at 23; Dudukovich at 13; and TINA 
at 22; but see ANA at 14.
---------------------------------------------------------------------------

D. Sec.  255.3--Expert Endorsements

    Section 255.3 provides guidance with respect to expert 
endorsements.
    Current Sec.  255.3(a) addresses advertisements that represent 
``directly or by implication'' that an endorser is an expert with 
respect to the endorsement message. The Commission proposes clarifying 
that this section applies to representations made ``expressly or by 
implication.'' \34\ The Commission proposes modifying current Example 2 
to clarify that the non-medical ``doctor'' expert endorser should have 
relevant expertise and that the non-medical and non-specialized doctors 
referenced in the example do not necessarily have enough expertise to 
endorse the product even with a clear and conspicuous disclosure. The 
Commission also proposes amending current Example 6--adding a sentence 
about the potential liability of the expert endorser and the 
advertiser, including a cross-reference to Sec.  255.1. The Commission 
would clarify that what matters is the expert's ``purported'' degree of 
expertise, not the expert's actual degree of expertise. Finally, the 
Commission would also indicate in Example 6 that scientific evidence is 
expected to support a serum cholesterol lowering claim.
---------------------------------------------------------------------------

    \34\ The Commission proposes making a similar change to Sec.  
255.2(c).
---------------------------------------------------------------------------

E. Sec.  255.4--Endorsements by Organizations

    Section 255.4 provides guidance specific to the use of endorsements 
by organizations.
    The Commission proposes to renumber the current example in Sec.  
255.4 as Example 1 and to add two additional examples.
    New Example 2 would say that if a manufacturer sets up an 
apparently independent review website that reviews the manufacturer's 
own

[[Page 44294]]

products and competing products, that website is deceptive because it 
is not in fact independent.\35\
---------------------------------------------------------------------------

    \35\ See Complaint at 8-9, In the Matter of Son Le, No. C-4619 
(May 31, 2020), https://www.ftc.gov/system/files/documents/cases/162_3178_c4619_trampolinesafetyofamerica_complaint_0.pdf.
---------------------------------------------------------------------------

    New Example 3 addresses a third-party review site that provides 
rankings of various manufacturers' products and accepts payments in 
exchange for higher rankings. This practice was challenged in the 
Commission's case against LendEDU.\36\ One commenter asked whether, 
based on that case, a disclosure is only required on such websites when 
they make claims that they are ``objective,'' ``accurate,'' and 
``unbiased.'' \37\ The revised example would say that a paid ranking 
boost is deceptive regardless of whether the website makes an express 
claim of independence or objectivity. It also would note the potential 
lability of a manufacturer that pays for a higher ranking. Finally, it 
would say that if a manufacturer makes payments to the review site but 
not for higher rankings, there should be a clear and conspicuous 
disclosure regarding the payments, with a cross-reference to an example 
involving payments for affiliate links.
---------------------------------------------------------------------------

    \36\ See Complaint at 15, In the Matter of Shop Tutors, Inc., 
No. C-4719 (Feb. 3, 2020), https://www.ftc.gov/system/files/documents/cases/182_3180_lendedu_complaint.pdf.
    \37\ See AFSA at 2.
---------------------------------------------------------------------------

F. Sec.  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). The text of 
this section also includes the example of a television ad featuring an 
endorser who is neither represented in the advertisement as an expert 
nor is known to a significant portion of the viewing public.
    The Commission believes the requirement that material connections 
between advertisers and endorsers be disclosed is appropriate and 
should be retained. The Commission proposes specifying that such 
disclosures must be ``clear and conspicuous,'' adding a definition of 
that phrase (as discussed above), and deleting the more ambiguous 
statement that such disclosures must be ``fully'' disclosed. It also 
proposes to delete the existing example from the text of the section 
and to replace it with more general guidance. A commenter asked for 
further guidance about what types of relationships could constitute 
material connections.\38\ The proposed revised text of Sec.  255.5 
would explain that material connections can include a business, family, 
or personal relationship; monetary payment; the provision of free or 
discounted products or services to the endorser, including products or 
services unrelated to the endorsed product; early access to a product; 
or the possibility of winning a prize, of being paid, or of appearing 
on television or in other media promotions. The new guidance would 
state that a material connection can exist regardless of whether the 
advertiser requires an endorsement for the payment or free or 
discounted products.
---------------------------------------------------------------------------

    \38\ See Boyd at 9.
---------------------------------------------------------------------------

    Several commenters asked that the Commission provide examples of 
immaterial connections that need no disclosure.\39\ The Commission 
proposes instead to recognize in the text of Sec.  255.5 that some 
connections may be immaterial because they are too insignificant to 
affect the weight or credibility given to endorsements.
---------------------------------------------------------------------------

    \39\ See, e.g., ANA at 10-12; CMA at 2; and NCTA at 10.
---------------------------------------------------------------------------

    One commenter suggested that the Guides recognize that, for 
influencers primarily famous because of their social media presence, 
their sponsorships are often expected.\40\ Without accepting or 
rejecting that proposition, the Commission proposes stating that an 
endorser's material connection need not to be disclosed when it is 
understood or expected by all but an insignificant portion of the 
audience.
---------------------------------------------------------------------------

    \40\ See NRF at 4.
---------------------------------------------------------------------------

    One commenter requested that the Guides state that the exact nature 
or amount of an endorser's compensation need not be disclosed,\41\ 
while another commenter asked that the Guides require influencers to 
state the amount of their compensation because it will help star-struck 
consumers appreciate the lack of honesty in celebrity posts.\42\ The 
Commission proposes clarifying that the disclosure of a material 
connection does not require the complete details of the connection, but 
it must clearly communicate the nature of the connection sufficiently 
for consumers to evaluate its significance.
---------------------------------------------------------------------------

    \41\ Id. at 10.
    \42\ See Hoofnagle at 3.
---------------------------------------------------------------------------

    Commenters also expressed widely diverging opinions on the extent 
to which the Guides should address disclosures of material connections 
to children. Most of these commenters agreed that, as children grow, 
they are better able to understand what advertisements are and to 
distinguish them from other content. They also agreed that it is easier 
for children to recognize traditional television advertising than 
influencer marketing, with its blurring of organic content and 
marketing. Commenters diverged as to the ages at which and the extent 
to which disclosures can be effective. Some variously argued that 
disclosures of material connections are never effective for children, 
are ineffective at certain young ages, or should be more robust for 
children at certain ages.\43\ At least one commenter argued that 
disclosures can work for younger kids.\44\ Several commenters urged the 
Commission not to address this issue in the Guides at all and rely 
instead on self-regulatory organizations.\45\ One commenter also noted 
that improving disclosures can help parents identify advertising to 
children.\46\ Some commenters discussed or cited research studies in 
this area to support their views \47\ or referred to the value of 
additional research.\48\
---------------------------------------------------------------------------

    \43\ See CCFC at 3, 25; CSM at 1, 10; and TINA at 10-11.
    \44\ See SuperAwesome at 2; see also NetChoice at 11.
    \45\ See ANA at 9-10; DCN at 2; IAB at 5; and NCTA at 2-3.
    \46\ See CCFC at 23.
    \47\ See, e.g., CCFC at 16-17, 21-23; CSM at 3-4, 6, 9; 
SuperAwesome at 3-5; and TINA at 10-11.
    \48\ See, e.g., BBB at 4; and CSM at 10.
---------------------------------------------------------------------------

    The Commission recognizes that it is difficult for children--
especially younger children--to discern ads from entertainment or other 
content in the digital environment, where the lines are blurred much 
more than in traditional ``linear'' media, like television. For 
example, it may not be apparent to them when influencers are being paid 
to promote a product featured in their video and social media posts. 
Although not addressed in the comments, parents may play a role in 
promoting children's understanding of advertising and lessening the 
effects of potentially deceptive practices. The Commission would 
benefit from more evidence than provided in the comments to develop 
specific guidance or best practices in this area. FTC staff thus plans 
to hold a public event to gather research and expert opinion on: (a) 
children's capacities at different ages and developmental stages to 
recognize and understand advertising content and distinguish it from 
other content; (b) the need for and efficacy of disclosures as a 
solution to the problem facing children of different ages; and, (c) if 
disclosures can be efficacious, the most effective format, placement, 
and wording for disclosures. As discussed below, the Commission also 
proposes

[[Page 44295]]

adding a new Sec.  255.6 addressing endorsements directed to children.
    The current Example 3 to Sec.  255.5 makes clear that consumers 
would not expect that a celebrity was paid for endorsing a medical 
procedure during a routine interview on a television talk show, that 
knowledge of such a financial interest would likely affect the weight 
or credibility consumers give to that endorsement, and that the 
celebrity's financial connection to the advertiser should be disclosed. 
One commenter said that the Guides should indicate that disclosures at 
the end of a talk show are not clear and conspicuous.\49\ The 
Commission proposes edits to Example 3 noting that the disclosure 
should be during the interview and that a disclosure during the show's 
closing credits is not clear and conspicuous. A different commenter 
suggested that the Guides say that disclosure obligations exist even if 
an endorser is not paid for a particular post.\50\ Revised Example 3 
would say that, if the celebrity makes the endorsement in one of her 
social media posts, her connection to the advertiser should be 
disclosed regardless of whether she was paid for the particular post. 
The revised example would also illustrate that receipt of free or 
discounted services can constitute a material connection.
---------------------------------------------------------------------------

    \49\ See CW at 2-5.
    \50\ See Dudukovich at 30, 62.
---------------------------------------------------------------------------

    One comment suggested that the Guides address the reuse of an 
influencer's social media endorsement.\51\ Revised Example 3 would also 
state that, when reusing a celebrity's social media posts in its own 
social media, an advertiser should clearly and conspicuously disclose 
its relationship to the celebrity (assuming the initial post 
necessitated a disclosure).
---------------------------------------------------------------------------

    \51\ See IZEA at 1.
---------------------------------------------------------------------------

    The current Example 4 to Sec.  255.5 addresses the consumer 
expectation that an expert endorser would be reasonably compensated for 
appearing in an ad. The Commission proposes clarifying that the 
existing guidance applies to traditional ads, such as television ads, 
and adding an alternative scenario involving a post on the expert's own 
social media account, a context in which consumers would be less likely 
to expect that the expert was compensated and more likely to expect 
that the expert is expressing an independent opinion.
    The current Example 5 to Sec.  255.5 addresses a scenario in which 
restaurant patrons are informed before they enter that they will be 
interviewed by an advertiser as part of its TV promotion of its new 
food product. A commenter suggested that we clarify why this 
information is material.\52\ The Commission proposes explaining that a 
patron might want to give the product a good review in the hope of 
appearing on television.
---------------------------------------------------------------------------

    \52\ See Dudukovich at 24-25.
---------------------------------------------------------------------------

    Several commenters said that incentivized reviews need disclosures 
even if the incentives are not conditioned on the reviews being 
positive.\53\ Current Example 6 to Sec.  255.5 addresses the situation 
where ``extras'' who want to work in commercials are recruited to use a 
product and endorse it in an infomercial in exchange for compensation 
and exposure. The Commission proposes expanding the example to address 
ordinary consumers recruited to try a product for free and write online 
reviews of it in exchange for payment; the example would state the need 
to disclose this connection in the resulting reviews. The example has a 
cross-reference to Sec.  255.2(d) and Example 9 of Sec.  255.2 for 
situations in which an incentive is conditioned on a review being 
positive or recruited consumers have reason to believe there are or may 
be negative consequences from posting reviews which are not positive. 
Multiple comments also raised concerns regarding incentivized reviews 
being included in an average star rating.\54\ The proposed example 
states that, even if adequate disclosures appear in each incentivized 
review, the practice could still be deceptive if those solicited 
reviews' star ratings are included in an average star rating for the 
product, and their inclusion materially increases that average star 
rating.
---------------------------------------------------------------------------

    \53\ See, e.g., AFSA at 3-4; BBB at 4-5; Boyd at 21-22; 
Dudukovich at 12-13; NAIMA at 4-5; and TINA at 21; but see CRN at 4-
5.
    \54\ See, e.g., AFSA at 4; BBB at 5; NAIMA at 5; and TINA at 21-
22.
---------------------------------------------------------------------------

    The Commission proposes to modify Example 7 to Sec.  255.5 to say 
that if a significant proportion of viewers are likely unaware that a 
woodworking influencer received a valuable piece of equipment for free 
from its manufacturer, he should clearly and conspicuously disclose 
that he got it for free. The Commission would make this example 
conditional in recognition of the possibility that the followers of 
some influencers or types of influencers may expect that they receive 
free products from advertisers. The Commission would also add a cross-
reference to Sec.  255.1(d) about the liability and responsibilities of 
advertisers.
    The current Example 8 to Sec.  255.5 addresses an employee's 
endorsement of an employer's product in an online community and the 
resulting need for a disclosure. A comment asked that the Commission 
add a statement about the employer educating its employees about 
disclosure requirements. The Commission proposes adding an explanation 
of an employer's obligations and noting that this guidance also applies 
to online consumer reviews.
    The Commission is also proposing the addition of three new examples 
to Sec.  255.5.
    The first one arises from the request of commenters that the 
Commission include an example illustrating conditions under which 
third-party certifications and seals of approval, which typically 
require payment to the certifying organization to fund the evaluation, 
do not require a disclosure.\55\ New Example 10, which is a slightly 
edited version of an example in the Green Guides,\56\ recognizes that 
consumers would reasonably expect that marketers have to pay non-
profit, third-party organizations reasonable fees for some 
certifications and seals.
---------------------------------------------------------------------------

    \55\ See CRN at 4; and KK&B at 1-2; see also NAIMA at 4.
    \56\ See Guides for the Use of Environmental Marketing Claims, 
16 CFR 290.6, Example 8.
---------------------------------------------------------------------------

    Second, multiple commenters asked that the Guides address the need 
to disclose affiliate relationships and the adequacy of affiliate links 
\57\ while one commenter asserted that consumers understand such links 
and that no disclosure is necessary.\58\ New Example 11 addresses the 
disclosure of affiliate links. It says that a blogger who writes 
independent content reviewing products and who monetizes that content 
with affiliate links should clearly and conspicuously disclose the 
compensation.
---------------------------------------------------------------------------

    \57\ See, e.g., AFSA at 4; BBB at 5, 11-12; Boyd at 24-25; CRN 
at 3, Consumer Reports at 10; Dudukovich at 14, 52; Maastricht at 7; 
and NMA at 3.
    \58\ See NRF at 10.
---------------------------------------------------------------------------

    Third, new Example 12 recognizes that, just as with television 
commercials, consumers can reasonably expect that people appearing in 
certain newer-form advertisements are compensated for their statements.

G. New Sec.  255.6--Endorsements Directed to Children

    As discussed above, endorsements directed to children may be of 
special concern. The Commission proposes adding a section simply 
acknowledging that fact, as to which we are aware of no disagreement. 
It would state, ``Endorsements in advertisements addressed to children 
may be of special concern because of the character of the audience. 
Practices which would not

[[Page 44296]]

ordinarily be questioned in advertisements addressed to adults might be 
questioned in such cases.'' The Commission proposed a very similar 
section in 1972 as Sec.  255.6,\59\ but withdrew it in 1975, stating 
that it had ``determined that the area of children's advertising could 
not be completely covered in these Guides.'' \60\ The Commission now 
believes that even as more evidence is gathered about the effects of 
children's advertising, there is ample basis to recognize that children 
may react differently than adults to endorsements in advertising or to 
related disclosures.
---------------------------------------------------------------------------

    \59\ See 37 FR 25,548 (Dec. 1, 1972).
    \60\ See 40 FR 22,127 (May 1, 1975).
---------------------------------------------------------------------------

Request for Comment

    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before September 26, 
2022. Write ``Endorsement Guides; P204500'' on your comment. Your 
comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the https://www.regulations.gov website.
    Because of the agency's heightened security screening, postal mail 
addressed to the Commission will be subject to delay. We strongly 
encourage you to submit your comments online through the https://www.regulations.gov website. To ensure the Commission considers your 
online comment, please follow the instructions on the web-based form.
    If you file your comment on paper, write ``Endorsement Guides; 
P204500'' on your comment and on the envelope, and mail your comment to 
the following address: Federal Trade Commission, Office of the 
Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex B), 
Washington, DC 20580.
    Because your comment will be placed on the public record, you are 
solely responsible for making sure that your comment does not include 
any sensitive or confidential information. In particular, your comment 
should not contain sensitive personal information, such as your or 
anyone else'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. You are also solely responsible for making sure your 
comment does not include any sensitive health information, such as 
medical records or other individually identifiable health information. 
In addition, your comment should not include any ``[t]rade secret or 
any commercial or financial information which . . . is privileged or 
confidential''--as provided in Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)--including 
competitively sensitive information such as costs, sales statistics, 
inventories, formulas, patterns, devices, manufacturing processes, or 
customer names.
    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). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted publicly at www.regulations.gov--as legally required by FTC 
Rule 4.9(b)--we cannot redact or remove your comment, unless you submit 
a confidentiality request that meets the requirements for such 
treatment under FTC Rule 4.9(c), and the General Counsel grants that 
request.
    Visit the FTC website to read this document and the news release 
describing it. The FTC Act and other laws that 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 it receives on or before 
September 26, 2022. For information on the Commission's privacy policy, 
including routine uses permitted by the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

List of Subjects in 16 CFR Part 255

    Advertising, Trade practices.


0
Accordingly, the Federal Trade Commission proposes to revise 16 CFR 
part 255 to read as follows:

PART 255--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.
255.6 Endorsements directed to children.

    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. 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.\1\ Whether a particular endorsement or 
testimonial is deceptive will depend on the specific factual 
circumstances of the advertisement at issue.
---------------------------------------------------------------------------

    \1\ Staff business guidance applying section 5 of the FTC Act to 
endorsements and testimonials in advertising is available on the FTC 
website. Such staff guidance addresses details not covered in these 
Guides and is updated periodically but is not approved by or binding 
upon the Commission.
---------------------------------------------------------------------------

    (b) For purposes of this part, an ``endorsement'' means any 
advertising, marketing, or promotional message (including verbal 
statements, tags in social media posts, 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 could be or appear to 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

[[Page 44297]]

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, brand, 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.
    (f) For purposes of this part, ``clear and conspicuous'' means that 
a disclosure is difficult to miss (i.e., easily noticeable) and easily 
understandable by ordinary consumers. If a communication's 
representation necessitating a disclosure is made through visual means, 
the disclosure should be made in at least the communication's visual 
portion; if the representation is made through audible means, the 
disclosure should be made in at least the communication's audible 
portion; and if the representation is made through both visual and 
audible means, the disclosure should be made in the communication's 
visual and audible portions. A disclosure presented simultaneously in 
both the visual and audible portions of a communication is more likely 
to be clear and conspicuous. A visual disclosure, by its size, 
contrast, location, the length of time it appears, and other 
characteristics, should stand out from any accompanying text or other 
visual elements so that it is easily noticed, read, and understood. An 
audible disclosure should be delivered in a volume, speed, and cadence 
sufficient for ordinary consumers to easily hear and understand it. In 
any communication using an interactive electronic medium, such as 
social media or the internet, the disclosure should be unavoidable. The 
disclosure should not be contradicted or mitigated by, or inconsistent 
with, anything else in the communication. When an endorsement targets a 
specific audience, such as older adults, ``ordinary consumers'' 
includes members of that group.
    (g) Examples:
    (1) Example 1. A film critic's review of a movie is excerpted in an 
advertisement placed by the film's producer. When so used, the excerpt 
is an endorsement because readers would view it as a statement of the 
critic's own opinions and not those of the producer. If the excerpt 
alters or quotes from the text of the review in a way that does not 
fairly reflect its substance, the advertisement would be deceptive 
because it distorts the endorser's opinion. (See Sec.  255.1(b))
    (2) Example 2. A television commercial depicts two unidentified 
shoppers in a supermarket buying a laundry detergent. One comments to 
the other how clean the advertised brand makes the shopper's clothes. 
The other shopper then replies, ``I will try it because I have not been 
fully satisfied with my own brand.'' This obviously fictional 
dramatization would not be an endorsement.
    (3) Example 3. In an advertisement for a pain remedy, an announcer 
unfamiliar to consumers except as a spokesperson for the advertising 
drug company praises the drug's ability to deliver fast and lasting 
pain relief. The spokesperson purports to speak, not on the basis of 
their 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.
    (4) 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. Many 
consumers are likely to believe this message reflects the driver's 
personal views, even if the driver does not say so, because consumers 
recognize the speaker as primarily a racing driver and not merely as a 
spokesman. Accordingly, consumers may well believe the driver would not 
speak for an automotive product without actually believing in their 
statements and having personal knowledge sufficient to form the beliefs 
expressed. The attribution of these beliefs to the driver makes this 
message an endorsement under the Guides.
    (5) Example 5. (i) A television advertisement for a brand of golf 
balls includes a video of a prominent and well-recognized professional 
golfer practicing numerous drives off the tee. The video would be an 
endorsement even though the golfer makes no verbal statement in the 
advertisement.
    (ii) The golfer is also hired to post the video to their social 
media account. The post is an endorsement if viewers can readily 
identify the golf ball brand, either because it is apparent from the 
video or because it is tagged or otherwise mentioned in the post.
    (6) Example 6. (i) An infomercial for a home fitness system is 
hosted by a well-known actor. During the infomercial, the actor 
demonstrates the machine and states, ``This is the most effective and 
easy-to-use home exercise machine that I have ever tried. Even if the 
actor is reading from a script, the statement would be an endorsement, 
because consumers are likely to believe it reflects the actor's 
personal views.
    (ii) Assume that, rather than speaking about their experience with 
or opinion of the machine, the actor says that the machine was designed 
by exercise physiologists at a leading university, that it isolates 
each of five major muscle groups, and that it is meant to be used for 
fifteen minutes a day. After demonstrating various exercises using the 
machine, the actor finally says how much the machine costs and how to 
order it. As the actor does not say or do anything during the 
infomercial that would lead viewers to believe that the actor is 
expressing their own views about the machine, there is no endorsement.
    (7) Example 7. (i) A consumer who regularly purchases a particular 
brand of dog food decides one day to purchase a new, more expensive 
brand made by the same manufacturer. The purchaser posts to their 
social media account that the change in diet has made their dog's fur 
noticeably softer and shinier, and that in her opinion, the new dog 
food definitely is worth the extra money. Because the consumer has no 
connection to the manufacturer beyond being an ordinary purchaser, 
their message cannot be attributed to the manufacturer and the post 
would not be deemed an endorsement under the Guides. The same would be 
true if the purchaser writes a consumer product review on the 
manufacturer's website, a retailer's website, or an independent review 
website.
    (ii) Assume that rather than purchase the dog food with their own 
money, the consumer receives it for free because the store routinely 
tracks purchases and the dog food manufacturer arranged for the store 
to provide a coupon for a free trial bag of its new brand to all 
purchasers of its existing brand. The manufacturer does not ask coupon 
recipients for product reviews and recipients likely would not assume 
that the manufacturer expects them to post reviews. The consumer's post 
would not be deemed an endorsement under the Guides because this 
unsolicited review cannot be attributed to the manufacturer.
    (iii) Assume now that the consumer joins a marketing program under 
which participants periodically receive free products from various 
manufacturers and can write reviews if they want to do so. If the 
consumer receives a free bag of the new dog food through this program, 
their positive review would be considered an endorsement under the 
Guides because of their connection to the manufacturer through the 
marketing program.

[[Page 44298]]

    (8) Example 8. A college student, who has earned a reputation as an 
excellent video game player, live streams their game play. The 
developer of a new video game pays the student to play and live stream 
its new game. The student plays the game and appears to enjoy it. Even 
though the college student does not expressly recommend the game, the 
game play is considered an endorsement.
    (9) Example 9. (i) An influencer who is paid to endorse a vitamin 
product in their social media posts discloses their connection to the 
product's manufacturer only on the profile pages of their social media 
accounts. The disclosures are not clear and conspicuous because people 
seeing their paid posts could easily miss the disclosures.
    (ii) Assume now that the influencer discloses their connection to 
the manufacturer in the posts themselves, but that, in order to see the 
disclosures, consumers have to click on a link labeled simply ``more.'' 
Those disclosures are not clear and conspicuous.
    (iii) Assume now that the influencer relies solely upon a social 
media platform's built-in disclosure tool for one of these posts. The 
disclosure appears in small white text, it is set against the light 
background of the image that the influencer posted, it competes with 
unrelated text that the influencer superimposed on the image, and the 
post appears for only five seconds. The disclosure is easy to miss and 
thus not clear and conspicuous.
    (10) Example 10. A television advertisement promotes a smartphone 
app that purportedly halts cognitive decline. The ad presents multiple 
endorsements by older senior citizens who are represented as actual 
consumers who used the app. The advertisement discloses via both audio 
and visual means that the persons featured are actors. Because the 
advertisement is targeted at older consumers, whether the disclosure is 
clear and conspicuous will be evaluated from the perspective of older 
consumers, including those with diminished auditory, visual, or 
cognitive processing abilities.
    (11) Example 11. (i) A social media advertisement promoting a 
cholesterol-lowering product features a testimonialist who says how 
says by how much they lowered their serum cholesterol. The claimed 
reduction greatly exceeds what is typically experienced by users of the 
product and a disclosure of typical results is required. The marketer 
has been able to identify from online data collection Spanish speaking 
individuals with high cholesterol levels who are unable to understand 
English and microtargets a Spanish-language version of the ad to them, 
disclosing the typical results in English. The adequacy of the 
disclosure will be evaluated from the perspective of the targeted 
individuals.
    (ii) Assume now that the ad has a disclosure that is clear and 
conspicuous when viewed on a computer browser but that is not clear and 
conspicuous when the ad is rendered on a smartphone. Because some 
consumers will view the ad on their smartphones, the disclosure is 
inadequate.
    (12) Example 12. An exterminator purchases fake negative reviews of 
competing exterminators. A paid or otherwise incentivized negative 
statement about a competitor's product is not an endorsement, as that 
term is used in the Guides. Nevertheless, such statements, e.g., a paid 
negative review of a competing product, can be deceptive in violation 
of section 5.
    (13) Example 13. A motivational speaker buys fake social media 
followers to impress potential clients. The use by endorsers of fake 
indicators of social media influence, such as fake social media 
followers, is not itself an endorsement issue. The Commission notes, 
however, that it is a deceptive practice for users of social media 
platforms to purchase or create indicators of social media influence 
and then use them to misrepresent such influence to potential clients, 
purchasers, investors, partners, or employees or to anyone else for a 
commercial purpose. It is also a deceptive practice to sell or 
distribute such indicators to such users.


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.  255.2(a) and 
(b) regarding substantiation of representations conveyed by consumer 
endorsements).
    (b) An advertisement need not present an endorser's message in the 
exact words of the endorser unless the advertisement presents the 
endorsement as a quotation. 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 about 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 misleading or 
unsubstantiated statements made through endorsements when there is a 
connection between the advertiser and the endorser, or for failing to 
disclose unexpected material connections between themselves and their 
endorsers (see Sec.  255.5). An advertiser may be liable for an 
endorser's deceptive statement even when the endorser is not liable. 
Advertisers should:
    (1) Provide guidance to their endorsers on the need to ensure that 
their statements are not misleading and to disclose unexpected material 
connections;
    (2) Monitor their endorsers' compliance; and
    (3) Take action sufficient to remedy non-compliance and prevent 
future non-compliance.
    (e) Endorsers may be liable for statements made in the course of 
their endorsements, such as when an endorser makes a representation 
that the endorser knows or should know to be deceptive. Also, an 
endorser who is not an expert may be liable for misleading or 
unsubstantiated representations regarding a product's performance or 
effectiveness when the representations are inconsistent with the 
endorser's personal experience, or were not made or approved by the 
advertiser and go beyond the scope of the endorser's personal 
experience (for the responsibilities of an endorser who is an expert, 
see Sec.  255.3). Endorsers may also be liable for failing to disclose 
unexpected material connections between themselves and an advertiser, 
such as when an endorser creates and disseminates endorsements without 
such disclosures.
    (f) Intermediaries, such as advertising agencies and public 
relations firms, may

[[Page 44299]]

be liable for their roles in disseminating what they knew or should 
have known were deceptive endorsements. They may also be liable for 
their roles with respect to endorsements that fail to disclose 
unexpected material connections, whether by disseminating 
advertisements without necessary disclosures or by hiring and directing 
endorsers who fail to make necessary disclosures.
    (g) The use of an endorsement with the image or likeness of a 
person other than the actual endorser is deceptive if it misrepresents 
a material attribute of the endorser.
    (h) Examples:
    (1) Example 1. (i) A building contractor states in an advertisement 
disseminated by an advertiser, ``I use XYZ exterior house paint because 
of its remarkable quick drying properties and durability.'' This 
endorsement must comply with the pertinent requirements of Sec.  255.3. 
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 use the paint and to subscribe to the views presented previously.
    (ii) Assume that, before the reformulation, the contractor had 
posted an endorsement of the paint to their social media account. Even 
if the contractor would not use or recommend the reformulated paint, 
there is no obligation to modify or delete their post as long as the 
date of that post is clear and conspicuous to viewers. If the 
contractor reposts or the advertiser shares the contractor's original 
endorsement after the reformulation, consumers would expect that the 
contractor continued to hold the views expressed in the original post.
    (2) Example 2. In a radio advertisement, a well-known DJ talks 
about how much they enjoy making coffee with a particular coffee maker 
in the morning. The DJ's comments likely communicate that they own and 
regularly use the coffee maker. If they do not own it or used it only 
during a demonstration by its manufacturer, the ad would be deceptive.
    (3) Example 3. (i) A dermatologist is a paid advisor to a 
pharmaceutical company and is asked by the company to post about its 
products on their professional social media account. The dermatologist 
posts that the company's newest acne treatment product is ``clinically 
proven'' to work. Before giving the endorsement, the dermatologist 
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. Given 
their medical expertise, the dermatologist should have recognized the 
study's flaws and is subject to liability for their false statements 
made in the advertisement. The advertiser is also liable for the 
misrepresentation made through the endorsement (see Sec.  255.3 
regarding the product evaluation that an expert endorser must conduct). 
Even if the study was sufficient to establish the product's proven 
efficacy, the pharmaceutical company and the dermatologist are both 
potentially liable if the endorser fails to disclose their relationship 
to the company (see Sec.  255.5 regarding the disclosure of unexpected 
material connections).
    (ii) Assume that the expert had asked the pharmaceutical company 
for the evidence supporting its claims and there were no apparent 
design or execution flaws in the study shown to the expert, but that 
the pharmaceutical company had withheld a larger and better controlled, 
non-published proprietary study of the acne treatment which failed to 
find any statistically significant improvement in acne. The expert's 
``clinically proven'' to work claim would be deceptive and the company 
would be liable for the claim, but because the dermatologist did not 
have a reason to know that the claim was deceptive, the expert would 
not be liable.
    (4) Example 4. A well-known celebrity appears in an infomercial for 
a hot air roaster that purportedly cooks a chicken perfectly in twenty 
minutes. During the shooting of the infomercial, the celebrity watches 
five attempts to cook chickens using the roaster. In each attempt, the 
chicken is undercooked after twenty minutes and requires forty-five 
minutes of cooking time. In the commercial, the celebrity places an 
uncooked chicken in the roaster. The celebrity then takes from a second 
roaster what appears to be a perfectly cooked chicken, tastes the 
chicken, and says that if you want perfect chicken every time, in just 
twenty minutes, this is the product you need. A significant percentage 
of consumers are likely to believe the statement represents the 
celebrity's own view and experience even though the celebrity is 
reading from a script. Because the celebrity knows that their statement 
is untrue, the endorser is subject to liability. The advertiser is also 
liable for misrepresentations made through the endorsement.
    (5) Example 5. (i) A skin care products advertiser hires an 
influencer to promote its products on the influencer's social media 
account. The advertiser requests that the influencer try a new body 
lotion and post a video review of it. The advertiser does not provide 
the influencer with any materials stating that the lotion cures skin 
conditions and the influencer does not ask the advertiser if it does. 
However, believing that the lotion cleared up their eczema, the 
influencer says in their review, ``This lotion cures eczema. All of my 
followers suffering from eczema should use it.'' The advertiser is 
subject to liability for misleading or unsubstantiated representations 
made through the influencer's endorsement. Furthermore, the influencer, 
who did not limit their claims to their personal experience and did not 
have a reasonable basis for their claim that the lotion cures eczema, 
is subject to liability for the misleading or unsubstantiated 
representation in endorsement. The influencer and the advertiser may 
also be liable if the influencer fails to disclose clearly and 
conspicuously being paid for the endorsement (see Sec.  255.5).
    (ii) In order to limit its potential liability, the advertiser 
should provide guidance to its influencers concerning the need to 
ensure that statements they make are truthful and substantiated and the 
need to disclose unexpected material connections and take other steps 
to discourage or prevent non-compliance. The advertiser should also 
monitor its influencers' compliance and take steps necessary to remove 
and halt the continued publication of deceptive representations when 
they are discovered and to ensure the disclosure of unexpected material 
connections (see Sec. Sec.  255.1(d) and 255.5).
    (6) Example 6. (i) The website for an acne treatment features 
accurate testimonials of users who say that the product improved their 
acne quickly and with no side effects. Instead of using images of the 
actual endorsers, the website accompanies the testimonials with 
pictures of different individuals with near perfect skin. The images 
misrepresent the improvements to the endorsers' complexions.
    (ii) The same website also sells WeightAway shakes and features an 
accurate testimonial from an individual who says, ``I lost 50 pounds by 
just drinking the shakes.'' Instead of accompanying the testimonial 
with a picture of the actual endorser, who went from 300 pounds to 250 
pounds, the website shows a picture of an individual who appears to 
weigh about 100 pounds. By suggesting that WeightAway

[[Page 44300]]

shakes caused the endorser to lose one-third of their original body 
weight, the image misrepresents the product's effectiveness. Even if it 
is accompanied by a picture of the actual endorser, the testimonial 
could still communicate a deceptive typicality claim.
    (7) Example 7. A learn-to-read program disseminates a sponsored 
social media post by a parent saying that the program helped their 
child learn to read. The picture accompanying the post is not of the 
endorser and their child. The testimonial is from the parent of a 7-
year-old, but the post shows an image of a child who appears to be only 
4 years old. By suggesting that the program taught a 4-year-old to 
read, the image misrepresents the effectiveness of the program.


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 express and implied 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 will likely be interpreted as representing that 
the endorser's experience is representative of what consumers will 
generally achieve with the advertised product or service 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. The disclosure of the generally expected performance 
should be presented in a manner that does not itself misrepresent what 
consumers can expect.
    (c) Advertisements presenting endorsements by what are represented, 
expressly 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.
    (d) In procuring, suppressing, boosting, organizing, or editing 
consumer reviews of their products, advertisers should not take actions 
that have the effect of distorting or otherwise misrepresenting what 
consumers think of their products, regardless of whether the reviews 
are considered endorsements under the Guides.
    (e) Examples:
    (1) Example 1. (i) A web page 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.
    (ii) The web page 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.
    (2) Example 2. (i) 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 heat pump can generally 
expect. The advertiser does not have substantiation for that 
representation because, in fact, fewer 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.
    (A) In another context, 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. 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.
    (B) The advertiser should clearly and conspicuously disclose the 
generally expected savings and have 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.''
    (ii) Disclosures like those in Example 2(i)(B) could still be 
misleading, however, if they only apply to limited circumstances that 
are not described in the advertisement. For example, if the 
advertisement does not limit its claims by geography, it would be 
misleading if the disclosure of expected results in a nationally 
disseminated advertisement was based on the experiences of customers in 
a southern climate and the experiences of those customers was much 
better than could be expected by heat pump users in a northern climate.
    (3) Example 3. An advertisement for a cholesterol-lowering product 
features individuals who claim that their serum cholesterol went down 
by 120 points and 130 points, respectively; the ad does not mention the 
endorsers 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

[[Page 44301]]

the advertiser does not have competent and reliable scientific evidence 
that the product can produce the specific results claimed by the 
endorsers (i.e., a 130-point drop in serum cholesterol without any 
lifestyle changes).
    (4) Example 4. (i) An advertisement for a weight-loss product 
features a formerly obese person. The endorser says in the ad, ``Every 
day, I drank 2 WeightAway shakes, ate only 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 endorser's experience, and such a 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 they achieved the claimed results, the ad is not likely to convey 
that consumers who weigh substantially less or use WeightAway under 
less extreme circumstances will lose 110 pounds in six months. If the 
advertisement simply says that the endorser lost 110 pounds in six 
months using WeightAway together with diet and exercise, however, this 
description would not adequately alert consumers to the truly 
remarkable circumstances leading to the endorser's weight loss. The 
advertiser must have substantiation, however, for any performance 
claims conveyed by the endorsement (e.g., that WeightAway is an 
effective weight loss product and that the endorser's weight loss was 
not caused solely by their dietary restrictions and exercise regimen).
    (ii) If, in the alternative, the advertisement simply features 
``before'' and ``after'' pictures of a woman who says ``I lost 50 
pounds in 6 months with WeightAway,'' the ad is likely to convey that 
the endorser's experience is representative of what consumers will 
generally achieve. Therefore, if consumers cannot generally expect to 
achieve such results, the ad would be deceptive. Instead, the ad should 
clearly and conspicuously disclose what they can expect to lose in the 
depicted circumstances (e.g., ``women who use WeightAway for six months 
typically lose 15 pounds''). A disclosure such as ``Average weight loss 
is 1-2 pounds per week'' is inadequate and likely deceptive. It does 
not communicate the period over which such weight loss can be expected 
and likely implies that such weight loss continues at that rate 
indefinitely.
    (iii) If the ad features the same pictures but the testimonialist 
simply says, ``I lost 50 pounds with WeightAway,'' and WeightAway users 
generally do not lose 50 pounds, the ad should disclose what results 
they do generally achieve (e.g., ``women who use WeightAway lose 15 
pounds on average''). A disclosure such as ``most women who use 
WeightAway lose between 10 and 50 pounds'' is inadequate because the 
range specified is so broad that it does not sufficiently communicate 
what users can generally expect.
    (iv) Assume that a WeightAway advertisement contains a disclosure 
of generally expected results that is based upon the mean weight loss 
of users. If the mean is substantially affected by outliers, then the 
disclosure would be misleading. For example, if the mean weight loss is 
15 pounds, but the median weight loss is 8 pounds, it would be 
misleading to say that the average weight loss was 15 pounds. In such 
cases, the disclosure's use of median weight loss instead could help 
avoid deception, e.g., ``most users lose 8 pounds'' or ``the typical 
user loses 8 pounds.''
    (v) Assume that WeightAway's manufacturer procured a fake consumer 
review, reading ``I lost 50 pounds with WeightAway,'' and had it 
published on a third-party review website. This endorsement is 
deceptive because it was not written by a bona fide user (see Sec.  
255.1(c)). Moreover, the manufacturer would need competent and reliable 
scientific evidence that WeightAway is capable of causing 50-pound 
weight loss.
    (vi) Assume that WeightAway is a diet and exercise program and a 
person appearing in a WeightAway ad says, ``I lost 50 pounds in 6 
months with WeightAway.'' Very few WeightAway users lose 50 pounds in 6 
months and the ad discloses, ``The typical weight loss of WeightAway 
users who stick with the program for 6 months is 35 pounds.'' In fact, 
only one-fifth of those who start the WeightAway program stick with it 
for 6 months. The disclosure is inadequate because it does not 
communicate what the typical outcome is for users who start the 
program. In other words, even with the disclosure, the ad does not 
communicate what people who join the WeightAway program can generally 
expect.
    (5) 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 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.
    (6) Example 6. An advertisement appears to show a ``hidden camera'' 
situation in a crowded cafeteria at breakfast time. A spokesperson for 
the advertiser asks a series of patrons of the cafeteria for their 
spontaneous, honest opinions of the advertiser's recently introduced 
breakfast cereal. Even though none of the patrons is specifically 
identified during the advertisement, the net impression conveyed to 
consumers may well be that these are actual customers. If actors have 
been employed, this fact should be clearly and conspicuously disclosed.
    (7) Example 7. (i) 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 the consumers' statements would be understood to be the 
subjective opinions of only three people, this advertisement is not 
likely to convey a typicality message.
    (ii) 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 or post about it on social media, 
that arrangement should be clearly and conspicuously disclosed (see 
Sec.  255.5).
    (8) Example 8. (i) A camping goods retailer's website has various 
product pages. Each product page provides consumers with the 
opportunity to review the product and rate it on a five-star scale. 
Each such page displays the product's average star rating and a 
breakdown of the number of reviews with each star rating, followed by 
individual consumers' reviews and ratings. As such, the website is 
representing that it is providing an accurate reflection of the view of 
the purchasers who submitted product reviews to the website. If the 
retailer chose to suppress or otherwise not publish any reviews with 
fewer than four stars or reviews that contain negative sentiments, the 
product pages

[[Page 44302]]

would be misleading as to purchasers' actual opinions of the products.
    (ii) If the retailer chose not to post reviews containing 
profanity, that would not be unfair or deceptive even if reviews 
containing profanity tend to be negative reviews. However, it would be 
misleading if the retailer blocked only negative reviews containing 
profanity, but posted positive reviews containing profanity. It would 
be acceptable for the retailer to have a policy against posting reviews 
unrelated to the product at issue or related services, for example 
reviews complaining about the owner's policy positions. But it would be 
misleading if the retailer chose to filter reviews based on other 
factors that are only a pretext for filtering them based on negativity. 
Sellers are not required to display customer reviews that contain 
unlawful, harassing, abusive, obscene, vulgar, or sexually explicit 
content, or content that is inappropriate with respect to race, gender, 
sexuality, or ethnicity, or reviews that the seller reasonably believes 
are fake, so long as the criteria for withholding reviews are applied 
uniformly to all reviews submitted. Neither are sellers required to 
display reviews that are unrelated to their products or services. 
Customer service, delivery, returns, and exchanges are related to the 
seller's products and services.
    (iii) Assume now, that each product page starts with a glowing 
five-star review that is labeled as ``the most helpful review.'' 
Labeling the review as the most helpful suggests it was voted most 
helpful by consumers visiting the website. If the initial review on 
each such page was selected by the retailer and was not selected as the 
most helpful review by other consumers, labeling it as the most helpful 
would be deceptive.
    (9) Example 9. A manufacturer offers to pay genuine purchasers $20 
each to write positive reviews of its products on third-party review 
websites. Such reviews are deceptive even if the payment is disclosed 
because their positive nature is required by, rather than being merely 
influenced by, the payment. If, however, the manufacturer did not 
require the reviews to be positive and the reviewers understood that 
there were no negative consequences from writing negative reviews, a 
clear and conspicuous disclosure of the material connection would be 
appropriate (see Sec.  255.5 and Sec.  255.6 (f)(2) (Example 6)).
    (10) Example 10. A manufacturer threatens consumers who post 
negative reviews of its products to third-party review websites with 
legal action or with physical threats in order to coerce the consumers 
to delete their reviews. Such threats amount to an unfair practice 
because consumers would be misled as to purchasers' actual opinions of 
the product.\2\
---------------------------------------------------------------------------

    \2\ The Consumer Review Fairness Act makes it illegal for 
companies to include standardized contract provisions that threaten 
or penalize people for posting honest reviews. 15 U.S.C. 45b.
---------------------------------------------------------------------------

    (11) Example 11. A marketer contacts recent online, mail-order, and 
in-store purchasers of its products and asks them to provide feedback 
to the marketer. The marketer then invites purchasers who give very 
positive feedback to post online reviews of the products on third-party 
websites. Less pleased and unhappy purchasers are simply thanked for 
their feedback. Such a practice may be an unfair or deceptive practice 
if it results in the posted reviews being substantially more positive 
than if the marketer had not engaged in the practice. If, in the 
alternative, the marketer had simply invited all recent purchasers to 
provide feedback on third-party websites, the solicitation would not 
have been unfair or deceptive, even if it had expressed its hope for 
positive reviews.


Sec.  255.3   Expert endorsements.

    (a) Whenever an advertisement represents, expressly 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 the endorser is represented as 
possessing with respect to the endorsement.
    (b) Although an expert may, in endorsing a product, take into 
account factors not within the endorser's expertise (such as 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 the endorser has expertise and which are relevant to 
an ordinary consumer's use of or experience with the product. 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 to another 
product or other products, 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 the 
endorser 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(e) regarding 
the liability of endorsers).
    (c) Examples:
    (1) 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 the endorser 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.
    (2) 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 audiology) or a physician without substantial experience in 
the area of hearing might be able to endorse the product, but at 
minimum, the advertisement must clearly and conspicuously disclose the 
nature and limits of the endorser's expertise
    (3) 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.
    (4) Example 4. A manufacturer of a non-prescription drug product 
represents that its product has been

[[Page 44303]]

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.
    (5) Example 5. A person who is identified as the president of a 
commercial ``home cleaning service'' 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' brands 
available to consumers, the service must, in fact, have such 
experience, and have determined, based on its expertise, that the 
endorsed product's cleaning ability is at least equal (or superior, if 
such is the net impression conveyed by the advertisement) to that of 
the leading competitors' products available to consumers. 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.
    (6) 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 likely be deceptive because those 
materials are not the type of scientific evidence that others with the 
purported degree of expertise would consider adequate to support this 
conclusion about the product's safety and efficacy. Under such 
circumstances, both the advertiser and the doctor would be liable for 
the doctor's misleading representation (See Sec.  255.1(d) and (e)).


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, 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(e) regarding the liability of endorsers).
    (a) Example 1. A mattress manufacturer 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.
    (b) Example 2. A trampoline manufacturer sets up and operates what 
appears to be an independent trampoline review website. The site 
reviews the manufacturer's trampolines, as well as those of competing 
manufacturers. Because the website falsely appears to be independent, 
it is deceptive (see Sec.  255.5).
    (c) Example 3. Assume that a third party operates a wireless 
headphone review website that provides rankings of different 
manufacturers' wireless headphones from most recommended to least 
recommended. The website operator accepts money from manufacturers in 
exchange for higher rankings of their products. Regardless of whether 
the website makes express claims of objectivity or independence, such 
paid-for rankings are deceptive. A headphone manufacturer who pays for 
a higher ranking on the website may also be held liable for the 
deception. A disclosure that the website operator receives payments 
from headphone manufacturers would be inadequate because the payments 
actually determine the headphones' relative rankings. If, however, the 
review website does not take payments for higher rankings, but receives 
payments from some of the headphone manufacturers, such as for 
affiliate link referrals, it should clearly and conspicuously disclose 
that it receives such payments (see Sec.  255.5(k)(11)).


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 and that connection is not reasonably 
expected by the audience, such connection must be disclosed clearly and 
conspicuously. Material connections can include a business, family, or 
personal relationship. They can include monetary payment or the 
provision of free or discounted products or services (including 
products or services unrelated to the endorsed product) to an endorser, 
regardless of whether the advertiser requires an endorsement in return. 
Material connections can also include other benefits to the endorser, 
such as early access to a product or the possibility of being paid, of 
winning a prize, or of appearing on television or in other media 
promotions. Some connections may be immaterial because they are too 
insignificant to affect the weight or credibility given to 
endorsements. Material connections do not need to be disclosed when 
they are understood or expected by all but an insignificant portion of 
the audience for an endorsement. A disclosure of a material connection 
does not require the complete details of the connection, but it must 
clearly communicate the nature of the connection sufficiently for 
consumers to evaluate its significance. Additional guidance is provided 
by the examples in paragraphs (a) through (l) of this section.
    (a) 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. Although the design and 
conduct of the

[[Page 44304]]

research project are controlled by the outside research organization, 
the weight consumers place on the reported results could be materially 
affected by knowing that the advertiser had funded the project. 
Therefore, the advertiser's payment of expenses to the research 
organization should be disclosed in the advertisement.
    (b) Example 2. A film star endorses a particular food product in a 
television commercial. 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.
    (c) Example 3. (1) 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 the player's career and 
during this time the player has risen to their highest level ever in 
the rankings. The player responds by attributing that improvement to 
seeing the ball better, ever since having laser vision correction 
surgery at a specific identified clinic. The athlete continues talking 
about the ease of the procedure, the kindness of the clinic's doctors, 
the short recovery time, and now being able to engage in a variety of 
activities without glasses, including driving at night. The athlete 
does not disclose having a contractual relationship with the clinic 
that includes payment for speaking publicly about the surgery. 
Consumers might not realize that a celebrity discussing a medical 
procedure in a television interview has been 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 during the interview that the athlete 
has been engaged as a spokesperson for the clinic, this endorsement is 
likely to be deceptive. A disclosure during the show's closing credits 
would not be clear and conspicuous. Furthermore, if consumers are 
likely to take away from the interview that the athlete's experience is 
typical of those who undergo the same procedure at the clinic, the 
advertiser must have substantiation for that claim.
    (2) Assume that the tennis player also touts the results of the 
surgery--mentioning the clinic by name--in a social media post. 
Consumers might not realize that the athlete is a paid endorser and, 
because that information might affect the weight consumers give to the 
tennis player's endorsement, the relationship with the clinic should be 
disclosed--regardless of whether it paid the athlete for that 
particular post. It should be disclosed even if the relationship 
involves no payments but only the tennis player getting the laser 
correction surgery for free or at a reduced cost.
    (3) Assume that the clinic uses the tennis player's endorsement in 
its own social media posts. The clinic should clearly and conspicuously 
disclose its relationship to the athlete in its posts.
    (4) Assume that during the appearance on the television talk show, 
the tennis player is wearing clothes bearing the insignia of an 
athletic wear company with which the athlete also has an endorsement 
contract. Although this contract requires wearing the company's clothes 
not only on the court but also in public appearances, when possible, 
the athlete does not mention the clothes or the company during the 
appearance on the show. No disclosure is required because no 
representation is being made about the clothes in this context.
    (d) Example 4. (1) A television ad for an anti-snoring product 
features a physician who says, ``I have seen dozens of products come on 
the market over the years and, in my opinion, this is the best ever.'' 
Consumers would expect the physician to be reasonably compensated for 
appearing in the ad. Consumers are unlikely, however, to expect that an 
expert endorser like the physician receives a percentage of gross 
product sales or 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.
    (2) Assume that the physician is also paid to post about the 
product on social media, a context in which consumers might not expect 
that the physician was compensated and more likely to expect that the 
physician is expressing an independent, professional opinion. 
Accordingly, the post should clearly and conspicuously disclose the 
doctor's connection with the company.
    (e) Example 5. (1) In a television advertisement, an actual patron 
of a restaurant, who is neither known to the public nor presented as an 
expert, is shown seated at the counter. The diner is asked for a 
``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 television promotion of 
its new ``meat-alternative'' burger. A patron seeing such a sign might 
be more inclined to give a positive review of that item in order to 
appear on television. The advertisement should thus clearly and 
conspicuously inform viewers that the patrons on screen knew in advance 
that they might appear in a television advertisement if they gave the 
burger a good review because that information may materially affect the 
weight or credibility of the endorsement.
    (2) Assume, in the alternative, that the advertiser had not posted 
the sign and that patrons asked for their opinions about the burger did 
not know or have reason to believe until after their response that they 
were being recorded for use in an advertisement. No disclosure is 
required here, even if patrons were also told, after the interview, 
that they would be paid for allowing the use of their opinions in 
advertising.
    (f) Example 6. (1) An infomercial producer wants to include 
consumer endorsements in an infomercial for an automotive additive 
product not yet on the market. The producer's staff selects several 
people who work as ``extras'' in commercials and asks them to use the 
product and report back, telling them that they will be paid a small 
amount if selected to endorse the product in the infomercial. Viewers 
would not expect that these ``consumer endorsers'' are actors who used 
the product in the hope of appearing in the commercial and receiving 
compensation. Because the advertisement fails to disclose these facts, 
it is deceptive.
    (2) Assume that the additive's marketer wants to have more consumer 
reviews appear on its retail website which sells a variety of its 
automotive products. The marketer recruits ordinary consumers to get a 
free product (e.g., a set of jumper cables or a portable air compressor 
for car tires) and a $30 payment in exchange for posting a consumer 
review of the free product on the marketer's website. The marketer 
makes clear and the reviewers understand that they are free to write 
negative reviews and that there are no negative consequences of doing 
so. Any resulting review that fails to clearly and conspicuously 
disclose the incentives provided to that reviewer is likely deceptive 
(When the resulting reviews must be positive or reviewers believe they 
might face negative consequences from posting negative reviews, a 
disclosure would be insufficient, see

[[Page 44305]]

Sec.  255.2(d) and (e)(9)). Even if adequate disclosures appear in each 
incentivized review, the practice could still be deceptive if the 
solicited reviews contain star ratings that are included in an average 
star rating for the product and including the incentivized reviews 
materially increases that average star rating.
    (g) Example 7. A woodworking influencer posts on-demand videos of 
various projects. A tool manufacturer sends the influencer an expensive 
full-size lathe in the hope that the influencer would post about it. 
The woodworker uses the lathe for several products and comments 
favorably about it in videos. If a significant proportion of viewers 
are likely unaware that the influencer received the lathe free of 
charge, the woodworker should clearly and conspicuously disclose 
receiving it for free, a fact that could affect the credibility that 
viewers attach to the endorsements. The manufacturer should advise the 
woodworker at the time it provides the lathe that this connection 
should be disclosed, and it should have reasonable procedures in place 
to monitor the influencer's postings for compliance and follow those 
procedures (see Sec.  255.1(d)).
    (h) Example 8. An online community has a section dedicated to 
discussions of robotic products. Community members ask and answer 
questions and otherwise exchange information and opinions about robotic 
products and developments. Unbeknownst to this community, an employee 
of a leading home robot manufacturer has been posting messages on the 
discussion board promoting the manufacturer's new product. Knowledge of 
this poster's employment likely would affect the weight or credibility 
of the endorsements. Therefore, the poster should clearly and 
conspicuously disclose their relationship to the manufacturer to 
community members. To limit its own liability for such posts, the 
employer should be engaged in appropriate training of employees. To the 
extent that the employer has directed such endorsements or otherwise 
has reason to know about them, it should also be monitoring them and 
taking other steps to ensure compliance (see Sec.  255.1(d)). The 
disclosure requirements in this example would apply equally to consumer 
reviews of the product posted on retail websites or review platforms.
    (i) Example 9. A college student signs up to be part of a program 
in which points are awarded each time a participant posts on social 
media about a particular advertiser's products. Participants can then 
exchange their points for prizes, such as concert tickets or 
electronics. These incentives would materially affect the weight or 
credibility of the college student's endorsements. They should be 
clearly and conspicuously disclosed, and the advertiser should take 
steps to ensure that these disclosures are being provided.
    (j) Example 10. Great Paper Company sells photocopy paper with 
packaging that has a seal of approval from the No Chlorine Products 
Association, a non-profit third-party association. Great Paper Company 
paid the No Chlorine Products Association a reasonable fee for the 
evaluation of its product and its manufacturing process. Consumers 
would reasonably expect that marketers have to pay for this kind of 
certification. Therefore, there is no unexpected material connection 
between the company and the association, and the use of the seal 
without disclosure of the fee paid to the association would not be 
deceptive.
    (k) Example 11. A coffee lover creates a blog that reviews coffee 
makers. The blogger writes the content independently of the marketers 
of the coffee makers, but includes affiliate links to websites on which 
consumers can buy these products from their marketers. Whenever a 
consumer clicks on such a link and buys the product, the blogger 
receives a small portion of the sale. Because knowledge of this 
compensation could affect the weight or credibility site visitors give 
to the blogger's reviews, the reviews should clearly and conspicuously 
disclose the compensation.
    (l) Example 12. (1) Near the beginning of a podcast, the host reads 
what is obviously a commercial for a product. Even without a statement 
identifying the advertiser as a sponsor, listeners would likely still 
expect that the podcaster was compensated, so there is no need for a 
disclosure of payment for the commercial. Depending upon the language 
of the commercial, however, the audience may believe that the host is 
expressing their own views in the commercial, in which case the host 
would need to hold the views expressed (see Sec.  255.0(b)).
    (2) Assume that the host also mentions the product in a social 
media post. The fact that the host did not have to make a disclosure in 
the podcast has no bearing on whether there has to be a disclosure in 
the social media post.


Sec.  255.6  Endorsements directed to children.

    Endorsements in advertisements addressed to children may be of 
special concern because of the character of the audience. Practices 
which would not ordinarily be questioned in advertisements addressed to 
adults might be questioned in such cases.

    By direction of the Commission.
April J. Tabor,
Secretary.

    Note:  The following statement will not appear in the Code of 
Federal Regulations: Statement of Chair Lina M. Khan Regarding the 
Endorsement Guides Review May 19, 2022.

    Today, the Commission is voting on releasing proposed revised 
``Guides Concerning Use of Endorsements and Testimonials in 
Advertising'' and publishing a Notice seeking comment on them 
(``Revised Guides''). These Guides tell companies how to use 
endorsements, testimonials, influencers, and consumer reviews in ads 
without deceiving consumers.
    These revisions come at a time when influencer marketing is 
becoming increasingly prevalent and as consumers increasingly rely on 
online consumer reviews to decide what to buy. Reports indicate that 
the global influencer marketing industry is set to grow to 
approximately $16.4 billion in 2022.\1\ Indeed, more than 75% of brand 
marketers intend to dedicate a budget to influencer marketing in 
2022.\2\ Influencers who are paid, receive free product or services, or 
have a relationship with a brand sometimes fail to disclose that 
material connection, hoping to appear more authentic to consumers. 
Consumers' increasing reliance on online reviews can also incentivize 
advertisers to harness fake reviews, suppress negative reviews, and 
amplify positive ones.
---------------------------------------------------------------------------

    \1\ Werner Geyser, The State of Influencer Marketing 2022: 
Benchmark Report, Influencer Mktg. Hub (Mar. 2, 2022), https://influencermarketinghub.com/influencer-marketing-benchmark-report/.
    \2\ Id. In addition, the global number of influencer marketing 
related service offerings grew by 26% in 2021 alone, reaching 18,900 
firms offering or specializing in influencer marketing services.
---------------------------------------------------------------------------

    I want to highlight three novel aspects of these Revised Guides 
that strike me as especially important.
    First is the Revised Guides' guidance on platforms' relationships 
with influencer marketing. Digital platforms profit from influencer 
marketing and should bear greater responsibility in this area.\3\ The 
Revised Guides warn that some platforms' disclosure tools are 
inadequate and may expose influencers

[[Page 44306]]

to liability or, in some instances, leave platforms themselves open to 
liability.
---------------------------------------------------------------------------

    \3\ Ellen Simon, How Instagram Makes Money, Investopedia (March 
17, 2022), https://www.investopedia.com/articles/personal-finance/030915/how-instagram-makes-money.asp (noting that, in 2019, 
Instagram generated $20 billion in advertising revenue and that 69% 
of America's marketers planned to spend most of their 2020 
influencer budget on Instagram).
---------------------------------------------------------------------------

    Second is the Revised Guides' explicit guidance on consumer 
reviews, and specifically the discussion of how encouraging fake 
reviews and suppressing negative reviews can result in law violations. 
This guidance reflects recent enforcement actions the agency has 
taken--including a recent final order settling allegations that Fashion 
Nova blocked negative reviews of its products from being posted on its 
website.\4\
---------------------------------------------------------------------------

    \4\ Decision and Order, In re Fashion Nova, LLC, No. C-4759 
(F.T.C. 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/1923138C4759FashionNovaOrder_0.pdf.
---------------------------------------------------------------------------

    Third is the Revised Guides' warning that child-directed influencer 
advertising is of special concern to the Commission. Those who market 
to children cannot assume that compliance with these guides is a safe 
harbor.
    The kid influencer marketplace is estimated to be as large as $1.7 
billion and is rapidly growing.\5\ This type of child-directed 
influencer advertising can pose a host of risks. As one recent report 
noted, ``unless children are able to differentiate between advertising 
and other forms of entertainment, and grasp the persuasive intent of 
advertising, then they are at risk of deception. This is especially 
true for children under 12, whose advertising literacy--all knowledge 
and skills related to understanding advertising--has not yet fully 
developed.'' \6\
---------------------------------------------------------------------------

    \5\ Agnieszka Guttmann, Kids Advertising Spending Worldwide 
2012-2021, By Format, Statista (April 7, 2020), https://www.statista.com/statistics/750865/kids-advertising-spending-worldwide/.
    \6\ Miriam Rahali & Sonia Livingstone, #SponsoredAds: Monitoring 
Influencer Marketing to Young Audiences 8 (2002), http://eprints.lse.ac.uk/113644/7/Sponsoredads_policy_brief.pdf.
---------------------------------------------------------------------------

    There is currently no clear or consistent approach to addressing 
the problem, and Congress and advocacy groups have called on the FTC to 
provide guidance on this issue.\7\ While we presently lack the full 
evidentiary record to support specific guidance or to propose best 
practices, I am eager for more input that will support more concrete 
action in this important area. Accordingly, in tandem with issuing the 
Revised Guides today, we are announcing an event to gather information 
on stealth advertising targeting children. The public event will be 
held in October and will focus on the blurring of advertising and 
programming content in child-directed digital media.
---------------------------------------------------------------------------

    \7\ See, e.g., Letter from Rep. Eshoo, Rep. Castor & Sen. Markey 
to Joseph J. Simons, Chair, Fed. Trade Comm'n (Aug. 22, 2019), 
https://eshoo.house.gov/sites/eshoo.house.gov/files/wysiwyg_uploaded/Eshoo-Markey-Castor%20follow%20up%20letter%20to%20FTC%20re%20predatory%20online%20ads%20%28002%29.pdf; Letter from Sen. Blumenthal, Sen. Markey, and 
Rep. Eshoo to Joseph J. Simons, Chair, Fed. Trade Comm'n (Dec. 6, 
2019), https://www.blumenthal.senate.gov/imo/media/doc/2019.12.06%20-%20FTC%20-%20Child%20Influencers.pdf; Letter from 
Laura Smith, Legal Director, Truth in Advertising, Inc. & Bonnie 
Patten, Executive Director, Truth in Advertising, Inc. to Andrew 
Smith, Director, Bureau of Consumer Prot., Fed. Trade Comm'n & Mary 
Engle, Associate Director, Div. of Advertising Pracs., Fed. Trade 
Comm'n (Aug. 28, 2019), https://truthinadvertising.org/wp-content/uploads/2019/08/8_28_19-ltr-to-FTC-re-Ryan-ToysReview_Redacted.pdf.
---------------------------------------------------------------------------

    I am eager for robust participation at this event and will look 
forward to learning from the public as we consider how to move forward 
on this important and timely issue.

[FR Doc. 2022-12327 Filed 7-25-22; 8:45 am]
BILLING CODE 6750-01-P