David Mallen, co-chair of Loeb & Loeb’s Advertising Disputes practice and chair of the firm’s Retail & Consumer Brands department is joined by Advanced Media & Technology partner Libby O’Neill and associate Jennifer Savitt to discuss common challenges and practical solutions to navigate the new Federal Trade Commission (FTC) guidelines including social media ads and disclosures, proposed rules for customer reviews, and recent enforcement actions from the FTC and National Advertising Division (NAD).
Prior to the FTC releasing draft guidelines in 2022, new guidelines had not been released since 2009—a period when the advertising and media landscape only began to scratch the surface of bloggers and influencers and the power of social media. Since then, businesses and advertisers have often created their own interpretations of endorsement guides, particularly in relation to what qualifies as deceptive or misleading language.
The gray area where the FTC seeks to explicitly enforce with recent rules is that the company uses “clear and conspicuous” endorsements that convey the material connection to the target consumer “unavoidably.” This applies to popular paid advertising methods on social media, including how disclosures are positioned and highlighted in Instagram stories or reels, the presentation of material connections in solicited reviews and how they're leveraged, negative review suppression practices, and more.
At first glance, the 2023 FTC endorsement guidelines are not drastically different from the 2022 draft, underscoring the importance for businesses to examine them meticulously in order to grasp the nuanced language. As demonstrated by recent FTC and NAD enforcement actions against major brands, agencies, and influencers, businesses must pivot their practices to avoid unintentional deceptive advertising practices.