FTC Enforcement Action Confirms That Ad Disclosure Obligations Extend to Endorsements Made in Social Media

Morrison & Foerster LLP

The Federal Trade Commission (“FTC”) has once again made good on its promise to enforce against deceptive advertising under Section 5 of the FTC Act, regardless of the media in which the advertising appears: its recently announced proposed complaint and draft settlement with the advertising firm Deutsch LA, Inc. involves endorsements posted by social media users. The action unmistakably signals to companies that advertise through social media—especially by leveraging user-generated content—that they need to comply with Section 5’s disclosure requirements.

As discussed below, not only is it deceptive to post bogus endorsements, but a clear and conspicuous disclosure of any material connection between an endorser and the advertising company is necessary in order to avoid a charge of deception.

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