FTC clarifies endorsement rules


The possibility of getting hit with an $11K Federal Trade Commission fine for saying nice things about a product or service that doesn’t live up to expectations has many in the media wringing their hands. But a key FTC staffer says there is no vendetta against endorsers.

Website Fast Company took questions about the fine to FTC’s Richard Cleland, who basically urged everybody to take a deep breath and relax.

He said the fine is in place for a worst case scenario, and would not kick in until there had been a warning, a refusal to comply with the warning, a serious product defect – after all that a cease-and-desist proceeding would be initiated.

He said there would be no fine whatsoever for a first offense; that the undertaking is seen primarily as education; and that advertisers, not the media, are the true target.

Cleland also advised that it there is any doubt about conflict of interest, any relationship between a media person and a company producing a good or service should be disclosed.

He was speaking mainly to the concerns of bloggers, and noted that there was no way that strict enforcement was even possible, even if it was a goal. He noted that the internet can be probed for specific types of possible violations, however, and also said that competitors often turn one another in when wrong-doing is suspected.

RBR-TVBR observation: The FTC rules may require quite a bit more clarification. People in the media cannot be expected to police the claims of all advertisers; particularly where special knowledge and testing is required to determine a statement’s validity.

Sure, there are certain categories where snake oil salesmen are known to congregate, and endorsers should beware.

But if a car manufacturer makes a claim about its vehicle, or a respected pharmaceutical company makes a claim about a new drug, an average media person will not be qualified to make a judgment. We hope that the FTC is not suddenly expected us all to be experts on everything that might someday be advertised.