FTC Puts Hundreds of Businesses on Notice about Fake Reviews and Other Misleading Endorsements
On October 13, 2021, the Federal Trade Commission (“FTC”) issued a warning to over 700 businesses regarding the use of deceptive endorsements, particularly in the context of fake reviews and misleading advertising. This move is part of the FTC's efforts to address the growing issue of misleading content on social media and online platforms, where the distinction between genuine user feedback and paid promotions has become increasingly unclear.
The FTC is utilizing its Penalty Offense Authority to inform these companies that they could face significant civil penalties—up to $43,792 per violation—if they engage in practices that have previously been deemed unlawful by the agency. The notice outlines various deceptive practices, including falsely claiming endorsements, misrepresenting the status of endorsers as actual users, and failing to disclose material connections between endorsers and the products.
Samuel Levine, the Director of the FTC’s Bureau of Consumer Protection, emphasized that such deceptive practices harm consumers and undermine honest businesses. While the notice serves as a reminder of existing laws, it does not imply that the listed companies have violated these laws. The FTC has also made available resources on its website to help businesses navigate compliance when using endorsements in their marketing efforts.
For more information, see here: https://www.ftc.gov/news-events/press-releases/2021/10/ftc-puts-hundreds-businesses-notice-about-fake-reviews-other
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