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Bloggers Need to Beware of Violating FTC Deceptive Practice Standards When Making Endorsements

by robertmasudesq

The Federal Trade Commission ("the Commission or FTC") has handed
down an advisory opinion that may have dire consequences for
companies that employ individuals who are involved in blogging
and promote those companies products or services while blogging. 
According to the Commission, this may hold true even if these
employees are undertaking this blogging on their personal time
and even if the company management has no idea of what may be
going on.  The Commission advises that such a blogger must make
readers aware of his or her connection with the company whose
products or services he or she is endorsing.

The FTC has concluded in this advisory opinion that these
specific actions may constitute deceptive business practices in
violation of the Federal Trade Commission Act.  The Federal Trade
Commission Act defines a deceptive business practice as sets
forth below:

1.	a practice that represents or omits material information that
likely would mislead reasonable consumers under the
circumstances; and,

2.	a practice that involves a representation or omission that is
of material importance to consumers

The Commission continually and regularly has found that a
seller's failure to disclose a relationship that would materially
effect a consumer's opinion is deceptive.

In the case of the advisory opinion, the specific concern was
the weight that a consumer will naturally give to a sponsored
endorser.  The Federal Trade Commission Endorsement Guides set
forth:

"(W)hen there exists a connection between the endorser and the
seller of the advertised product that might materially affect the
weight or credibility of the endorsement . . . such connection
must be fully disclosed."

A connection is deemed to exist in most instances when the
endorser (here, a blogger) is paid by the company responsible for
providing the product or service or when an endorser has a close
business association (or has a relative with such an association)
with such a company.  Without a doubt, according to the
Commission, employees of a business have such a close business
association and their connection must be made public when they
make any endorsement.

The bottom line is that it appears that companies and businesses
have a duty to pro-actively monitor their employees blogging
habits and warn them about the perils of making endorsements
through blogging when their connection to that business
enterprise is not made public.  In a similar vein, if the
employee is making negative statements about a competitor, his or
her association with his or her employer must be made public to
avoid violating FTC regulations.

Robert Masud, Esq. is the principal of Masud & Company LLC, a <a
href="http://www.masudco.com">law firm for the world of business,
finance and the internet</a>. Find out how our lawyers can help
you or assist your business at <a
href="http://www.masudco.com">http://www.masudco.com</a>.

Syndicated by Top Gazebos - www.topgazebos.net

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