More and more social media platforms are being flooded with claims of “fake news.”
In partial response, the Federal Trade Commission (“FTC”) recently issued hundreds of warnings signaling that it intends to crack down on fake product and service reviews.
The FTC sent out Notices of Penalty Offenses to more than 700 different companies.
Those notices warned those companies that they could be subject to significant civil penalties – up to $43,792 per violation! – if they issue or promote illegally deceptive endorsements or fake reviews.
Companies receiving these notices run the gamut, from Amazon to Google, Facebook to General Motors.
An FTC press release notes that “[t]he rise of social media has blurred the line between authentic content and advertising, leading to an explosion in deceptive endorsements against the marketplace. Fake online reviews and other deceptive endorsements often tout products throughout the online world.”
A company’s mere receipt of a Notice of Penalty Offense does not mean that it has actually engaged in deceptive or unfair advertising.
Nonetheless, and as tempting as it may be, product sellers, service providers, and reviewers should avoid creating, using or promoting reviews or testimonials which “stretch the truth.”
Conduct which could give rise to false or deceptive advertisements subjecting companies to civil penalties include:
- falsely claiming that a third-party endorsement has been received;
- misrepresenting whether one providing an endorsement is an actual or recent consumer of a product or service;
- making deceptive performance claims; or
- misrepresenting an endorser’s experience as being the typical or ordinary consumer experience.
To assist companies in making or promoting appropriate endorsements, the FTC has put together an endorsement guide.
The guide contains answers to commonly asked questions about blogs, social media, product placement, and testimonials.
That guide can be found at: ftc.gov/tips-advice/business-center/guidance/ftcs-endorsement-guides-what-people-are-asking.
Use caution when advertising on social media or soliciting endorsements for your business.
You know your product or service is great. The truth should be good enough to sell it.
So, focus on honest and accurate descriptions and representations by real reviewers.
And, if you ever have questions, contact your FOS attorney.