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December 21st, 2011
FTC Concludes Investigation Concerning Gifts to Bloggers
The Federal Trade Commission (“FTC”) recently closed its investigation of Hyundai Motor America’s (“Hyundai”) alleged violation of Section 5 of the FTC Act (15 U.S.C. § 45) in connection with a blogging campaign conducted to spark interest in Hyundai’s Super Bowl XLV ads. The inquiry focused on whether bloggers were given gift certificates as an incentive to comment on or post links to the ads and if they were explicitly told not to disclose this information in violation of the FTC Endorsement Guides.
The Endorsement Guides require the disclosure of any material connection between an endorser and an advertiser that is not reasonably expected by the audience. In its closing letter, the FTC stated that a gift to a blogger for posting specific content promoting an advertiser''s products or services is likely to constitute such a material connection.
The FTC cited several reasons for its decision to end the investigation, including that:
- Hyundai did not appear to know in advance about the use of gift certificates as incentives and a relatively small number of bloggers received the certificates (some of whom disclosed this information);
- an individual working for the media firm that was hired to conduct the blogging campaign was responsible for the gift certificates. Although Hyundai could be held responsible for such conduct, it was in violation of the media firm’s and Hyundai’s social media policies; and
- the media firm promptly took action to address the issue upon learning of the alleged misconduct.
The FTC’s actions serve as a reminder to agencies and advertisers that establishing clear policies on endorsements and promptly addressing any compliance issues may save them from potential endorsement problems in the long run.
If you have any questions about this investigation or the FTC Endorsement Guidelines, please contact Terri Seligman at (212) 826-5580, email@example.com; Jeffrey Greenbaum at (212) 826 5525, firstname.lastname@example.org; Claudine Wilson at (212) 705-4842, email@example.com, or any other member of the Frankfurt Kurnit Advertising Group.
Disclaimer. This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.
Other Advertising Law Alerts
FTC Updates Endorsement Guide FAQs and Settles First-Ever Action Against Individual “Influencers”
Recent developments demonstrate the FTC's continued interest in social media endorsements.
September 11 2017
FTC Announces Reforms to Its Investigative Process
Recently, the FTC announced a set of internal reforms intended to improve the process by which the Commission investigates unfair, deceptive and fraudulent business practices. The reforms relate to the Civil Investigative Demands ("CID") that the FTC's Bureau of Consumer Protection issues to request information from investigation targets.
September 7 2017
End of an Era at NAD?
Last week Frankfurt Kurnit's Advertising Group proudly hosted "A Twenty-Year NAD Retrospective: The Levine Legacy," an ABA program honoring Andrea Levine, on the occasion of her retirement as Director of NAD. With NAD transitioning to new (as yet unnamed) leadership, we thought it would be a good time to review some of the best practices that guide NAD practitioners every day.
July 10 2017