The FTC is Cracking Down on Fake Online Reviews and Misleading Endorsements

On October 13, 2021, the Federal Trade Commission (“FTC”) issued a press release on its efforts to reel in how a business uses its online presence. The press release acknowledged that “social media has blurred the line between authentic content and advertising, leading to an explosion in deceptive endorsements across the marketplace.” 

By unanimous vote within the commission (5-0), more than 700 companies were sent a Notice of Penalty Offenses[1] and up to $43,792 per violation as a civil penalty if a violation is found.The companies were predominantly large retailers, consumer product companies, and advertising agencies. Each company received the notice that summarized the practices it found to be unfair or deceptive based on prior administrative cases. The press releases stated that “[t]hese include, but are not limited to: falsely claiming an endorsement by a third party; misrepresenting whether an endorser is an actual, current, or  recent user; using an endorsement to make deceptive performance claims; failing to disclose an unexpected material connection with an endorser; and misrepresenting that the experience of endorsers represents consumers’ typical or ordinary experience.”

The press release finally stated that receipt of the notice does not suggest that a company is currently engaged in an unfair or deceptive practice. 

View the press release “FTC Puts Hundreds of Businesses on Notice about Fake Reviews and Other Misleading Endorsements”: https://www.ftc.gov/news-events/press-releases/2021/10/ftc-puts-hundreds-businesses-notice-about-fake-reviews-other

View a full list of businesses that received the Notice of Penalty Offense: https://www.ftc.gov/system/files/attachments/penalty-offenses-concerning-endorsements/list-recipients-endorsement-notice.pdf

[1] The press release explains that a Notice of Penalty Offenses allows the FTC to pursue enforcement of any FTC administrative order, other than a consent order.

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