December 11, 2006
The staff of the Federal Trade Commission (FTC) has rejected a call from Commercial Alert for law enforcement actions and guidelines on the practice of "word of mouth" or "buzz" marketing. The FTC staff concluded that there is no need for guidelines and the Commission will determine whether any law enforcement action is appropriate on a case-by-case basis.
As noted by Mary Engle, Associate Director for Advertising Practices at the FTC: "Word of mouth marketing" includes a broad range of activities in which a marketer induces and facilitates communications between and among consumers about the marketer's products." Commercial Alert filed a petition with the FTC on October 18, 2005, alleging that the practice of "word of mouth marketing" or "buzz marketing" was a violation of Section 5 of the Federal Trade Commission Act.
ANA's General Counsel, Doug Wood, filed comments with the Commission arguing that there is nothing inherently false, deceptive or unfair about "word of mouth marketing" and that the Commission has sufficient authority to regulate this practice on a case-by-case basis. We are very pleased that the FTC staff has rejected the petition of Commercial Alert.
If you have any questions about this matter, please contact Dan Jaffe is ANA's Washington, DC office at djaffe@ana.net or (202) 296-1883.