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August 26th, 2010
PR Firm Settles FTC Charges Regarding Misleading Endorsements
In an important enforcement action following up on the revisions to the endorsement and testimonial guidelines issued last year, the Federal Trade Commission ("FTC") announced today a settlement with a public relations firm, Reverb Communications, Inc. ("Reverb"), for what the FTC alleges are deceptive advertising practices. In particular, the FTC charges that Reverb had its employees pose as ordinary consumers and post positive reviews of its clients’ video game applications at the online iTunes store - without disclosing that the reviewers were actually paid to promote the video games.
The Director of the FTC’s Division of Advertising Practices, Mary Engle, warns in the corresponding press release, "Advertisers should not pass themselves off as ordinary consumers touting a product, and endorsers should make it clear when they have financial connections to sellers."
The action serves as a reminder that not only brands, but agencies too, are subject to increased scrutiny by the FTC in this arena. Further, brands and agencies are responsible for complying with the endorsement guidelines in their offline and online promotions.
Read the FTC’s full press release - "Public Relations Firm to Settle FTC Charges that It Advertised Clients' Gaming Apps Through Misleading Online Endorsements".
If you have any questions about the recent action, the FTC guidelines or other advertising/marketing law issues, please contact Jeffrey A. Greenbaum at (212) 826 5525 or jgreenbaum@fkks.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
What the Advertising Industry Can Learn from Kim Kardashian’s Settlement with the SEC
On October 3, 2022, the Securities and Exchange Commission (SEC) announced that it entered into a $1.26 million settlement with Kim Kardashian over her social media promotion of the EMAX token without disclosing payment she received from token issuer, EthereumMax. The matter provides important lessons for advertisers. Read more.
October 10 2022
Get Ready for California’s New “Automatic Renewal” Rules
California recently amended its Automatic Purchase Renewals law. The amended statute - effective July 1st -- require marketers to provide consumers of automatic renewal or continuous service offers with more information and easier ways to terminate. Read more.
June 22 2018
“Made in the U.S.A.” Claims Continue to be Scrutinized
In 2016, California amended Section 17533.7 of the California Business and Professions Code ("Section 17533"), liberalizing the standard for selling products labeled "Made in U.S.A" to California consumers. Read more.
June 4 2018
