Social Media Dos & Don'ts: Endorsements


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Presented by Michael B. Schiffer, counsel at Frankfurt Kurnit Klein & Selz, on April 12, 2012 at "Social Media Dos & Don'ts: Legal Compliance You Will 'Like." Held at EisnerAmper and organized by the New York Technology Council.

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Social Media Dos & Don'ts: Endorsements

  1. 1. SOCIAL MEDIA LEGAL DO’S& DON’TS - ENDORSEMENTSPresented at NY Technology Council Event April 12, 2012 Michael B. Schiffer
  2. 2. Section 5 of the FTC Act• Prohibits “unfair or deceptive acts or practices”
  3. 3. The FTC Endorsement Guides• Updated in 2009, in part, to address new media• Endorsements = “Any advertising message . . . that consumers are likely to believe represents the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser . . .”• Celebrity, expert or regular folks like us• They are all about credibility
  4. 4. Endorsements – Material Connections• Connections between the endorser and the advertiser, which might materially affect the weight or credibility of the endorsement, should be clearly and conspicuously disclosed• Connections that are “not reasonably expected by the audience”• Does the consumer understand the relationship between the endorser and the advertiser?
  5. 5. Old Media Sony Pictures• Sony employees, posing as consumers, were used to promote the movie• Not disclosed• Consent decrees with Connecticut and Oregon (2002)
  6. 6. New York v. Lifestyle Lift• NYAG alleged that Lifestyle Lift published anonymous fake positive reviews and created fake consumer websites• The reviews appeared to be from actual consumers• Consent order with $300k penalty (2009)
  7. 7. Email of the DayTo: Lazy EmployeeFrom: Your Boss_______________________________________ “Friday is going to be a slow day - I need you to devote the day to doing more postings on the web as a satisfied client.”
  8. 8. FTC v. Reverb• FTC charges PR agency with posing as ordinary consumers and posting reviews on the iTunes store – “Amazing new game” – “ONE of the BEST”• Agency was hired by video game developers• FTC says that the agency should have disclosed that it was paid to post the reviews• Consent order (2010)
  9. 9. FTC v. Ann Taylor• “Exclusive blogger preview” event for the LOFT Summer 2010 Collection• Offered gifts to bloggers to attend• Offered gift cards (worth between $50-500) to all bloggers who posted content about the event within 24 hours
  10. 10. ESRP V. HCG
  11. 11. ERSP v. HCG cont.• ERSP also challenged claims on what appeared to be independent social media sites• Posts linked to the HCG website• ERSP said that the advertiser is responsible for the false claims
  12. 12. “simply because the marketer did not knowabout a consumer making a particular claim, it is not somehow absolved from responsibility about the accuracy of the claims” -- ERSP
  13. 13. How to Disclose Connection:• How do you effectively disclose the connection in emerging media?• Are the principles workable for text messages, Twitter, etc.?• Ad hoc disclosures
  14. 14. Who’s Watching?• FTC, competitors, other regulators, consumers
  15. 15. Questions? Michael B. Schiffer CounselFrankfurt Kurnit Klein & Selz 212-705-4827