FTC Mid-Year Review

Conference attendees: Scroll down for CLE materials

Andrew Sacks, of counsel at DLA Piper, discussed recent developments and updates to the FTC's endorsement guides concerning disclosure issues, right to repair, subscription free trials, developments related to children's online privacy, and customer reviews.

Key Takeaways

Updated Endorsement Guides

The FTC commissioned administrative guidance on how section five of the FTC act, which addresses unfair and deceptive practices, applies to testimonials and endorsements used for advertising. The update has important implications for social and digital advertising in relation to social media influencers, online reviews, and other content. The guidance requires the disclosure of the material connection between the endorser and the advertiser and requires content to be presented in a truthful and non-misleading way. The proposal also notes that endorsers using fake indicators of social influencers, such as fake follows, is also a deceptive practice if used to create a misrepresentation of their online influence.

In May, the FTC announced a series of proposed changes to its endorsement guide, clarifying the way it addresses various social and online practices. It focused on protecting children, cracking down on fake reviews and other forms of misleading advertising, warning marketers about stealth marketing that targets kids, and other practices that cause people to pay more money for products and services and hurt competitors. The guide also informs marketers what it means to make disclosures clear and conspicuous.

The proposed revisions also addressed:

Customer reviews: Brands can't procure, suppress, boost, organize, edit, distort, or misrepresent consumer reviews, but they are not required to display obscene, harassing, or unrelated reviews.

Right to repair: Legal protections against repair restriction including products designed in a way that make it difficult to prevent or complicate repair and purposely making parts, repair manuals, and diagnostic software tools unavailable.

Subscriptions and free trials: The Restoring Online Shoppers Confidence Act requires clear disclosure of terms before attaining consumer billing information, requires consumer consent before making charges, and requires a simple mechanism for stopping recurring charges. Recent enforcement trends related to subscriptions and free trials also include steering consumers to unwanted products (dark patterns), deceptive free trials, and making online cancellations unavailable.

Protecting Children's Privacy: The FTC remains interested in enforcing the Children's Online Privacy Act, which places parents in control of what information is collecting from young children online. A key trend observed is insufficient age gating where poorly designed platforms enable children to circumvent age gates and concerns with platforms signaling to children how to respond to age gate questions.

CLE Materials

Source

"FTC Mid-Year Review." Andrew Sacks, of counsel at DLA Piper; Brian Boyle, partner at DLA Piper. 2022 ANA Law Virtual One-Day Conference, 7/27/22.

You must be logged in to submit a comment.