The Federal Trade Commission (FTC) has introduced some new regulations addressing endorsements of products. These regulations are significant and every affiliate should be mindful of them to avoid running into any trouble with the FTC (and likely the search engines as well).
There are two major components to the new regulations. The first is that third party endorsements can no longer feature “unusual” results. Whatever endorsements are featured on the site now must feature “typical” results, or results that the average user can reasonably expect.
The FTC’s regulations used to allow for endorsements siting cases with amazing, true, but atypical results, as long as there was a diclaimer featured on the page stating “results not typical.” The revised guidelines no longer allow for this kind of endorsement to be included in the seller’s advertising. As a result, affiliates should be sure to keep their endorsements grounded in results that customers can generally or typically expect.
The second component of the new guidelines relates to the disclosure of any material relationship that exists between the advertisers and the endorser. This aspect of the new regulations is not so much a change as it is a clarifying of the rules that have been in place since 1980.
The new version of the guidelines includes a number of examples that more clearly describe exactly what constitutes a material relationship and what that relationship looks like when translated onto the web. Basically, it comes down to disclosure. If you are regularly blogging about a product you have been given or that you have been paid to blog about, it has to be disclosed.
The new guidlines also include more information regarding celebrity endorsements and solidifies the fact that both the advertiser and the endorser may be held liable for unsubstantiated claims.
What do these changes mean for affiliates? For those affiliates who are including affiliate links in their blogs or places where people may not know that you benefit from their purchasing a product, there needs to be a statement saying that you benefit from the sale of the product. And in the case of endorsements, the new regulations indicate that endorsements need to describe results that the average customer can expect.
As is often the case, the courts will be the testing-ground to see how these new regulations manifest themselves in real world changes. And as the FTC site says, “The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.”
That said, the new regulations are problably a good indication of where the FTC hopes to move in terms of the types of infractions that it will be cracking down on. As usual the best advice is to keep your sites clear of anything that contravenes the FTC regulations.
If you’re interested to learn more about the new regulations, the FTC has posted a number of videos that briefly (and they really are brief, less than a minute each) outline the new rules.