FTC PUTS HUNDREDS OF ADVERTISERS ON NOTICE ABOUT FAKE REVIEWS AND MISLEADING ENDORSEMENTS
by: InfoLawGroup
The Federal Trade Commission on Wednesday made public its most recent activities related to combating deceptive advertising. In a morning press release, the FTC indicated that it had sent “Notice of Penalty Offenses” regarding fake reviews and misleading endorsements to over seven hundred advertisers (here is the list), reminding them of their ongoing concerns over things like fake online reviews and misleading endorsements.
In its notice, the FTC recommended that advertisers take all steps necessary to ensure that their company’s practices do not violate the law. The FTC reminded companies that receipt of the notice puts them on notice that engaging in conduct described therein could subject the company to civil penalties of up to $43,792 per violation. A copy of the notice can be found here.
Notices like this are a “warning shot” to the industry at large. Getting a notice is not an indication or assertion that an advertiser or brand has violated the law, but it does allow the agency to seek civil penalties against a company that engages in conduct that it knows has been found unlawful in a previous FTC administrative order.
Once a company has received a notice listing relevant claims or conduct, it has “actual knowledge” that those practices violate the law. If the company then engages in those acts or practices, the FTC may sue in federal court. The receipt of a Notice of Penalty Offenses will help the FTC establish that the company had “actual knowledge.”
But why send a “Notice”? The FTC recently indicated that it is resurrecting its Penalty Offense Authority, found in Section 5 of the FTC Act. By sending a Notice of Penalty Offenses, the advertisers will be on notice that they could incur significant sanctions for engaging in certain unlawful practices.
This most recent round of activity from the FTC is further proof that they continue to be focused in on a wide array of online advertising, social media and influencer-related activities. If you have received a letter, you should make sure to carefully review all of your online and social media-related activities. The same advice holds true even for those companies that did not receive a letter during this latest round.
Our firm helps companies of all sizes audit and revamp their online and social media review and endorsement activity as a routine part of our practice. If you have any questions, or if we can assist, please feel free to contact us.
Originally published by InfoLawGroup LLP. If you would like to receive regular emails from us, in which we share updates and our take on current legal news, please subscribe to InfoLawGroup’s Insights HERE.