FTC Issues Preemptive Notices of Penalty Offenses to Advertisers

On October 13 the US Federal Trade Commission (FTC) sent “Notice of Penalty Offenses” to more than 700 large retailers, advertisers and consumer product companies describing endorsement practices that the FTC has found deceptive in past decisions.

The recipients of the notices were targeted based on size and prominence within the sector rather than any past practices, and the intent was to place these businesses, and others, on notice that if they engage in deceptive practices they could face penalties of up to $43,792 per violation.  The notice applies not only to a company’s advertisements but to its use of influencers, fake reviews and reviews by customers with connections to the company.

What kind of advertising does the FTC view as deceptive? The FTC provides these examples:

  • misrepresentation that an endorser is an actual current or recent user of a product

  • misrepresentation that the endorser’s experience represents a typical customer experience

  • use of an endorsement without good reason to believe that the endorsement continues to represent the endorser’s view of the product

  • use of an endorsement to misrepresent how a product performs

  • failure to disclose an unexpected relationship, such as a family or business relationship, between the endorser and the advertiser

If you have any questions or concerns about how this guidance may affect your business, please let us know.

 

 

Authored by Kelly Tubman Hardy and Martha Steinman.

Contacts
Kelly Hardy
Partner
Washington, D.C.
Martha Steinman
Partner
New York

 

This website is operated by Hogan Lovells Solutions Limited, whose registered office is at 21 Holborn Viaduct, London, United Kingdom, EC1A 2DY. Hogan Lovells Solutions Limited is a wholly-owned subsidiary of Hogan Lovells International LLP but is not itself a law firm. For further details of Hogan Lovells Solutions Limited and the international legal practice that comprises Hogan Lovells International LLP, Hogan Lovells US LLP and their affiliated businesses ("Hogan Lovells"), please see our Legal Notices page. © 2022 Hogan Lovells.

Attorney advertising. Prior results do not guarantee a similar outcome.