On September 7, 2017, the FTC announced its first-ever case against social media influencers. In its complaint, the FTC alleged that two widely followed gamers, Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell, posted messages endorsing online gaming service CSGO Lotto without disclosing that the two jointly owned the company. In addition to deceptively endorsing the service, the two are alleged to have paid thousands of influencers to promote the CSGO Lotto on social media without requiring those influencers to disclose the payments, which ranged between $2,500 and $55,000. The consent agreement requires Cassell and Martin to clearly and conspicuously disclose material connections between any endorser and promoted products and services. Continue Reading FTC Issues First Endorsement Case Against Social Media Influencers
On October 3, 2016, Amazon announced that it will eliminate most incentivized reviews – reviews written by customers in exchange for free or discounted products – except those reviews facilitated through the Amazon Vine program. Amazon, which has always banned compensated reviews, previously had allowed businesses to offer free samples to customers in exchange for reviews, as long as customers disclosed the fact of the incentive. In theory, customers receiving free products should have provided unbiased reviews; a recent study, however, showed the average rating for products with incentivized reviews was almost half a point higher than products with non-incentivized reviews. As we previously reported, this change is part of a broader industry crackdown on misleading online reviews, with the Federal Trade Commission also promising to go after marketers who do not disclose material connections between online endorsers and the product they are endorsing.
Yesterday, the Federal Trade Commission laid down a clear marker for retailers in announcing a settlement with Lord & Taylor. This is the agency’s first native advertising case since issuing its Enforcement Policy Statement on Deceptively Formatted Advertising and its Native Advertising Business Guidance in December 2015.
Most marketers and retailers know that the consumer protection laws require that their advertising claims be substantiated, truthful and not misleading. But the new year is a good time to take stock of advertising campaigns, practices and procedures to make sure they pass muster under the Federal Trade Commission’s (FTC’s) latest guidance. The FTC’s recent enforcement actions provide a starting point.
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