Since updating its Endorsement Guides in 2015 to keep pace with the meteoric rise of social media and influencers in marketing, the FTC has placed a significant emphasis on the need to disclose material connections between advertisers and endorsers. Through its Guides, informal business guidance, blog posts, warning letters, and multiple enforcement actions, the FTC has deployed virtually all of the tools in its proverbial tool box to combat what it views as deceptive omissions by influencers who promote goods and services that they are compensated in some shape or form to promote. We’ve blogged many times about the nuances of what constitutes a material connection and how to adequately disclose such connection on social media.
This week, the FTC went back to basics. It announced a settlement with a marketer of weight loss capsules for, among other things, hiring a third-party review site to create and post fake reviews of its product on Amazon to boost its ratings, and thus sales. This is the first such enforcement action by the FTC, although the New York AG has brought several such cases challenging similar conduct.
Customer reviews are critical to distinguishing your product and brand in today’s crowded online marketplace. It’s a good practice to monitor reviews to proactively identify strengths and weaknesses with your products and customer service. When you cross the line to controlling the content by manipulating or fabricating customer reviews, however, it is deceptive. If you’re unsure what you can and cannot do with customer reviews, consult with skilled counsel.