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FTC Revamps Endorsement Regulations

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With the rise of Web 2.0 tools, advertisers have a plethora of new opportunities to promote products and, unfortunately, dupe online users. For this reason, the Federal Trade Commission (FTC) has proposed new regulations regarding misleading online endorsements, which could hinder online advertisers' ability to use social networking sites and blogs to promote products. The last time the FTC updated the Guides Concerning the Use of Endorsements and Testimonials in Advertising was 1980. To find out how the regulations would be received, the FTC opened the topic for public comment on its Web site. While some question the necessity of the revisions, others think they are a much-needed modernization of outdated regulations. According to the FTC, the new revisions will continue to be assessed in the coming months.

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    FTC Revamps
    Endorsement Regulations
    and Puts Bloggers on Thin Ice
           ome internet scams are easy to spot—pop-ups boasting        While this may put a stop to blatant false advertising, bloggers
    S      miracle weight loss or emails claiming you’ve won the
    lottery—but other, more subtle scams aren’t as easy to identify.
                                                                       who review products will have to watch their backs as well. “In
                                                                       revising the guides, which are nearly 30 years old, the
    With the rise of Web 2.0 tools, advertisers have a plethora of     commission will address current marketing techniques, such as
    new opportunities to promote products and, unfortunately,          blogging and word-of-mouth advertising. Those who are
    dupe online users. For this reason, the Federal Trade              compensated to promote or review a product using these
    Commission (FTC) has proposed new regulations regarding            techniques are not exempt from the laws governing truthful
    misleading online endorsements, which could hinder online          advertising,” says a statement from Richard Cleland, assistant
    advertisers’ ability to use social networking sites and blogs to   director of the division of advertising practices at the FTC.
    promote products.                                                     David Meerman Scott, marketing strategist and contributing
       “Testimonials that do not describe typical consumer             editor for EContent, wrote about the nuances of these new
    experiences should be accompanied by clear and conspicuous         regulations on his Web Ink Now blog. In a post titled
    disclosure of the results consumers can generally expect to        “Bloggers in Handcuffs,” Scott wrote about these new
    achieve from the advertised product or program,” says a press      regulations: “This is an important potential worry for people
    release issued by the FTC regarding the proposed revisions.        who talk about products that have been provided to them by a
    The last time the FTC updated the Guides Concerning the Use        company. … I’ve been an advocate of full disclosure when
    of Endorsements and Testimonials in Advertising was 1980.          doing a review on an expensive product that you have
    “The guidelines with respect to endorsements predate all of        received for free. But now that I think about it, I do not
    this online marketing, social networking sites, and a whole host   disclose that I received a book for free if I write about the
    of litigation that has happened since,” says
    Roberta Jacobs-Meadway, an intellectual
    property attorney, and a member of the
    firm of Eckert Seamans Cherin & Mellott.
    Almost 30 years later, these guides are
    being revamped.
       “What the [new] guidelines are saying is
    that you have to obey the same basic principles
    of disclosure when you are in a social
    networking situation and when you are using
    newer media to plug the
								
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