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Rimon Analysis of the New FTC Endorsement and Testimonial Guidelines

A few days ago, Legal Bytes alerted you to the fact that the Federal Trade Commission has issued revised "Guides Concerning the Use of Endorsements and Testimonials in Advertising". These revisions update the FTC’s Guides, last modified in 1980, that provide direction to advertisers and agencies regarding compliance with the FTC Act.

John P. Feldman, a partner in our Washington, D.C. office and a key member of our Advertising Technology & Media law team, has prepared (and you can view and download) an Analysis of the New Guides. Of course, no memorandum prepared for general information or a summary of this type can provide legal advice, and you should be careful not to rely on it since everyone’s circumstances and the facts of each situation will differ – at a minimum, based on the type of product or service, the target audience, and the advertising media, among other things. That said, the summary will give you a good overview of what is in the Guides and what is different or updated from the prior Guides.

Of course, if you need specific guidance or need to know more about the FTC Guides, or the implications to social media advertising and marketing or traditional advertising, feel free to contact John P. Feldman, Douglas J. Wood or Joseph I. Rosenbaum, or the Rimon attorney with whom you regularly work.

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What Me Worry? Don’t Get Mad, Get Informed!

On Friday, October 23, 2009, from 12 – 1 p.m. (Eastern U.S. Time), Joseph I. (“Joe”) Rosenbaum, Partner at Rimon and General Counsel of the IAB, assisted by Adam Snukal, Senior Associate at Rimon, will be presenting an educational webinar, sponsored by the Long Tail Alliance Program of the Interactive Advertising Bureau (IAB), entitled: What Me Worry? Legal Best Practices for Small Publishers.

The webinar will provide an overview of the legal issues and suggested best practices in the following areas:

Trademarks: Buying someone else’s key words? Displaying advertising? Sponsoring or hosting contests, sweepstakes, co-branded promotions? Using social media or virtual worlds? Trademarks are everywhere. When should you worry?

Compliance: What’s new at the FTC and FCC? Industry groups want self-regulation. Privacy and consumer advocacy groups want more regulation. Congress is poised to “do something.” What you need to know about marketing to children, adults, compliance with sectoral advertising regulations, from finance and health care to product safety.

Privacy: Behavioral targeting has everyone up in arms. What should a small publisher do if she feels her privacy policy has been violated?

Social Media: Blogs, splogs and vlogs. Virtual worlds, avatars and pseudonyms. Profiles and networks, friends and fans. Testimonials and endorsements – from celebrities to consumers, paid and unpaid. Buzz, viral and word of mouth. Defamation, libel, copyright and personalized URLs. Sound confusing? It is. But ignorance won’t insulate you from liability. Don’t want to become a regulatory target? What you should know.

Q&A: IAB and Rimon to answer questions from participants.

The webinar is open to IAB members, to Rimon clients, and to the general public on a first-come, first-served basis. Register now. You can get more information and register right here for What Me Worry? Legal Best Practices for Small Publishers.

About the Long Tail Alliance Program

The IAB formed the Long Tail Alliance program in summer 2008 to encourage involvement with individuals and small businesses who, powered by interactive advertising, have turned their interests and passions into a media revolution. The Alliance is the beginning of something the IAB envisions as a much larger portrait of American entrepreneurs who are pursuing and achieving the American dream, even as they row hard against strong economic currents. The IAB hopes to expand its Long Tail Membership in order to encourage advocacy, training, and a coming-together of smaller publishers across America as their businesses grow, all while the dynamic of technology and media continues to change.

About the IAB

The Interactive Advertising Bureau is comprised of more than 375 leading media and technology companies that are responsible for selling 86 percent of online advertising in the United States. On behalf of its members, the IAB is dedicated to the growth of the interactive advertising marketplace, of interactive’s share of total marketing spend, and of its members’ share of total marketing spend. The IAB educates marketers, agencies, media companies and the wider business community about the value of interactive advertising. Working with its member companies, the IAB evaluates and recommends standards and practices, and fields critical research on interactive advertising. Founded in 1996, the IAB is headquartered in New York City, with a Public Policy office in Washington, D.C.

About Rimon

Rimon is a global, full service law firm with nearly 1600 lawyers in 23 offices around the world. Joseph I. (“Joe”) Rosenbaum, a partner in the New York office, chairs the firm’s global Advertising Technology & Media law practice; is the editor and publisher of Legal Bytes; is Corporate Secretary & General Counsel to the IAB; and is an ex-officio member of the IAB Board. Adam Snukal is a Senior Associate who works with Joe in the Advertising Technology & Media law group, and is editor of Adlaw by Request, the gold standard in advertising legal publications in the industry.

Join us for this exciting and timely IAB Long Tail Alliance webinar presented by Rimon. We look forward to your participation.

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FTC Releases Updated Endorsement & Testimonial Guidelines

Although it will be published in the Federal Register shortly, you can download and read the text of the Federal Trade Commission’s  revised "Guides Concerning the Use of Endorsements and Testimonials in Advertising" issued earlier today, right on Legal Bytes now. As reported previously in Legal Bytes, the final revisions are intended to update the FTC’s guidance, last revised in 1980, that provide advice to advertisers and agencies regarding compliance with the FTC Act.

While the prior guidelines allowed advertisers to use a “results not typical” disclaimer, that is no longer a safe haven from liability, and advertisers will be required to disclose what a consumer should generally expect when purchasing or using the product. Furthermore, any connection that a consumer might not reasonably know between an advertiser and an endorser needs to be disclosed. In recent years, comments by bloggers, through word of mouth, buzz or viral marketing were never addressed in the Guides. The updated version now deals with and provides examples of when these rise to a level of connection requiring disclosure.. For example, if a blogger receives any consideration in cash or in kind (e.g., free gaming console to try) to review products or services, that would now be considered an endorsement that requires disclosure – even if the review remains unbiased. 

The fact that a consumer should be informed about a material connection between the advertiser and the maker of the statements is now firmly embedded in the FTC Guides, even though these cases were always subject to review on a case-by-case basis. Of course, what constitutes a “material” connection will still be subject to a factual determination, but if a company, for example, sponsors research about its products or services (or potentially about the products or services of a competitor, if the results will be used in a comparative ad), then the company must disclose its sponsorship in the ad. Similarly, although consumers may expect celebrities to be paid for appearing in commercials, if an endorsement is made outside that context – for example, on a talk show, at a book signing, at a motion picture premiere, or on Facebook, Twitter or other social media – any material relationships must be disclosed.

The proposed new guidelines were the subject of a seminar, "Trust Me, I’m a Satisfied Customer: Testimonials & Endorsements in the United States", presented by Joseph I. Rosenbaum, at the University of Limerick in July. You can go to the previous Legal Bytes blog post and download a copy of the presentation at any time.  "

Want to know more about the FTC Guides, or the implications to social media advertising and marketing, or traditional advertising? Feel free to contact me or the Rimon attorney with whom you regularly work.

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British High Court is for the Birds? Actually, for Twitter!

Again in the category of "you can’t really make this up," yesterday the High Court in Britain ordered an injunction served through Twitter – the social networking site.

Donal Blaney, a lawyer, runs a blog called Blaney’s Blarney. Another account, named blaneysbarney, was impersonating Blaney, a politically conservative blogger. Inspired by a case in Australia, where Facebook was used to serve a court order, Blaney asked the court to allow him to serve the anonymous Twitter-user with a court order using the very social network the imposter was using – Twitter! As a practical matter, the court order will only actually be served (i.e., the writ received) when that account owner logs in and accesses his or her account on Twitter.

Since access to British courts appeared much more facile than heading to California in the hopes that a U.S. court will deal with the issue and with Twitter in the United States, he opted to petition the High Court in Britain to allow him to serve the order using Twitter. In the United Kingdom, the law permits an injunction to be delivered through electronic means (e.g., telecopy or even email), so in principle, no new law has actually been created, although this is certainly a novel twist to the existing law – especially since the identity of the imposter account owner was not known to Blaney.

The British High Court agreed, noting that issuing the writ using the Tweeting facility appeared to be the best way to get to the individual behind the anonymous tweeting. As has been noted in Legal Bytes previously, obtaining the identity of anonymous account holders on social media networks can be difficult, with favorable results far from a certainty in all jurisdiction and legal venues.

In the Australian case reported last year, which did not involve impersonation, a couple in Australia defaulted on their mortgage with MKM Capital, but were successfully able to avoid being served with papers in person. They ignored emails and never showed up in court. So, a Supreme Court judge in Australia’s Capital Territory agreed to let MKM Capital serve papers over the Internet. Facebook profiles (you know, those great facts and tidbits you share with everyone in your social media network and the public) had birth dates, email addresses and all the information necessary to satisfy the judge that they could indeed communicate and contact the defendants using Facebook.

Getting back to the recent UK order, online impersonation of sports figures and entertainment celebrities has become an increasing problem and nuisance on social media networks, and Twitter has even reacted to the problem by allowing celebrity "Tweeters" to have their authenticity certified with an icon (similar to a "seal") that is attached to their real profile pages.

The ability to serve legal papers and court orders using digital means through social media – imagine serving my avatar in a virtual world – may have wide-ranging implications for bringing legal actions against those who seek to use anonymity or pseudonymity to insulate themselves from detection when engaging in inappropriate or illegal activities. That said, if the actual account owner is anonymous, how will we know who they are even after they are "served," unless the host or ISP is somehow bound by the service of process.

Stay tuned. Social media is turning the legal world upside down, too . . . let us know if we can help keep you upright. Contact me if you have questions about this or any other matters.

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Useless But Compelling Facts – October 2009

By the way, one of the first modern day robots was a “robotherapist” named Eliza, created by famed science-fiction writer Isaac Asimov in 1942. In yet another example of life imitating art, Massachusetts Institute of Technology Professor Joseph Weizenbaum wrote a program in 1966 he called Eliza – a program of only 240 lines of code designed to simulate a psychotherapist by responding to questions with more questions!

Now this month we have a simpler question. Presidents and Vice Presidents have come under fire many times in the history of the United States, from impeachment proceedings to Congressional investigative hearings.  But as far as I know, only one has actually been arrested for treason – although he was ultimately acquitted. Curiously, although virtually anyone who has studied American political history will know his name instantly, it almost always will be in the context of another famous event in U.S. history and not his arrest.  Who is it and what’s the other famous event? If you think you know, send your answer first and fast directly to me.

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Useless But Compelling Facts – September 2009 Answer

Last month we mentioned that although the first use of the term “robot” emanates from the play R.U.R. (Rossum’s Universal Robots), first published in 1921 by Czech playwright Karel Čapek, the term was actually suggested to him (or so the history relates) by someone else – and we asked you to tell us who.  Well congratulations to Kevin Kim, Information Privacy Officer at Alberta Education in Edmonton, who correctly told us it was Karel’s brother, Josef Čapek, who suggested the term. The word entered the English language in 1923 when Karel’s play was translated into English. Thanks Kevin!

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Are You Behaving Badly? Redux

If you missed our teleseminar “Global Regulation of Behavioral Marketing in an Age of Privacy & Data Protection,” presented by Rimon partners Douglas J. Wood and Joseph I. Rosenbaum from New York and Gregor Pryor from London, I am pleased to make a copy of the “Are You Behaving Badly” presentation available to our Legal Bytes’ readers. The industry gave us “New Hope.” Privacy and consumer advocacy groups responded, and the “Empire Strikes Back.” Just recently, Congress commended the self-regulatory efforts of the industry, but noted a perceived need for additional legislation. “The Phantom Menace” persists.

The intergalactic battles continue, battle lines remain drawn, tensions remain high and the balance unclear – perhaps because changing technology, social media norms and advertising models keep rewriting the rules of engagement. If you listened in, thank you. If you missed it, here is the presentation. In either case, don’t hesitate to contact any of us with questions.