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SOCIAL MEDIA LEGAL DO’S & DON’TS - ENDORSEMENTSPresented at NY Technology Council Event
April 12, 2012
Michael B. Schiffer
Section 5 of the FTC Act
• Prohibits “unfair or deceptive acts or practices”
The FTC Endorsement Guides
• Updated in 2009, in part,to address new media
• Endorsements =
“Any advertising message . . . that consumers are likely to believe represents the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser . . .”
• Celebrity, expert or regular folks like us
• They are all about credibility
Endorsements – Material Connections
• Connections between the endorser and the advertiser, which might materially affect the weight or credibility of the endorsement, should be clearly and conspicuously disclosed
• Connections that are “not reasonably expected by the audience”
• Does the consumer understand the relationship between the endorser and the advertiser?
Old MediaSony Pictures
• Sony employees, posing as consumers, were used to promote the movie
• Not disclosed
• Consent decrees with Connecticut and Oregon (2002)
New York v. Lifestyle Lift
• NYAG alleged that Lifestyle Lift published anonymous fake positive reviews and created fake consumer websites
• The reviews appeared to be from actual consumers
• Consent order with $300k penalty (2009)
Email of the Day
To: Lazy Employee
From: Your Boss
_______________________________________
“Friday is going to be a slow day - I need you to devote the day to doing more postings on the web as a satisfied client.”
FTC v. Reverb
• FTC charges PR agency with posing as ordinary consumers and posting reviews on the iTunes store– “Amazing new game”– “ONE of the BEST”
• Agency was hired by video game developers
• FTC says that the agency should have disclosed that it was paid to post the reviews
• Consent order (2010)
FTC v. Ann Taylor
• “Exclusive blogger preview” event for the LOFT Summer 2010 Collection
• Offered gifts to bloggers to attend
• Offered gift cards (worth between $50-500) to all bloggers who posted content about the event within 24 hours
ESRP V. HCG
ERSP v. HCG cont.
• ERSP also challenged claims on what appeared to be independent social media sites
• Posts linked to the HCG website
• ERSP said that the advertiser is responsible for the false claims
“simply because the marketer did not know about a consumer making a particular claim, it is not somehow absolved from responsibility
about the accuracy of the claims”
-- ERSP
How to Disclose Connection:
• How do you effectively disclose the connection in emerging media?
• Are the principles workable for text messages, Twitter, etc.?
• Ad hoc disclosures
Who’s Watching?
• FTC, competitors, other regulators, consumers
Questions?
Michael B. Schiffer
Counsel
Frankfurt Kurnit Klein & Selz
212-705-4827