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March 14, 2014
THIS PAID MESSAGE IS BROUGHT TO
YOU BY OUR GENEROUS BENEFACTOR:
FTC CONTINUES CRACKDOWN ON
MISLEADING ENDORSEMENTS
by Allison Fitzpatrick
Back in the media Dark Ages (i.e., pre-Twitter), millions of consumers would get their daily news from venerable
newsmen and newswomen like Walter Cronkite during “CBS Evening News” or other nightly news broadcasts
(For those too young to remember, Walter Cronkite’s CBS Evening News was that day’s “Must See TV”). Today,
consumers are turning to less traditional mediums to get their daily dose of news and current events, such as
“The Today Show” or “Live With Kelly and Michael.” Not to say one medium is better (well, one is better), but
that they are different.
Now imagine if in the middle of Walter Cronkite’s nightly report on the Watergate scandal, he praised the
Watergate Hotel’s concierge services or, when he spoke about the JFK assassination, he lauded the wonderful
training Lee Harvey Oswald received at the United States Marine Corps. At a minimum, you would expect Mr.
Cronkite to identify the paid messaging in the report by disclosing that “This commercial message was brought
to you by The Watergate Hotel,” or “This report was paid for by the U.S. Marines.” Similarly, you would expect
Kathie Lee or Hoda to disclose any paid messaging when they endorsed marketer’s products on their less
traditional news mediums. (Please note that this is only a hypothetical and we do not mean to tarnish Mr.
Cronkite’s good name and character or compare him in any way to Kathie Lee).
The Federal Trade Commission (FTC) would also expect that relationship to be disclosed, as evidenced by its
recent settlement with the home security company, ADT LLC (ADT). The settlement resolved FTC’s claims that
ADT’s spokespeople failed to disclose that they were paid spokespeople for ADT when they endorsed ADT
Pulse monitoring products on national and local television and radio news programs and talk shows, including
on NBC’s “Today Show” and on websites, blogs and other online materials. According to the FTC, ADT
scheduled the media interviews through its booking agents, often providing reporters and news anchors with
suggested interview questions and b-roll footage. Then the paid spokespersons were identified on air as an
expert in child safety, home security, or technology and were interviewed as part of a news segment on a topic
related to his or her expertise. The FTC claimed that during the course of the interviews, the paid
spokespersons provided favorable endorsements of the ADT products but failed to mention their relationship
with ADT.
Under the settlement, ADT agreed that it would: (i) not misrepresent that a discussion or demonstration of a
security or monitoring product or service was an independent review provided by an impartial expert; (ii) clearly
Reprinted with permission from The Huffington Post
Attorney Advertising
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and prominently disclose any material connection between an endorser and ADT; and (iii) take reasonable steps
to remove the demonstration, review, or endorsement by an endorser with a material connection to ADT
currently viewable by the public that did not meet these standards.
The settlement, however, is noteworthy because of its “compliance” provisions, namely, because it requires ADT
to provide each endorser with a clear statement of his/her responsibility to disclose clearly and prominently in
any televisions appearance, blog posting or other communication the endorser’s material connection to ADT.
ADT is also required to implement and maintain a system to monitor and review its endorser’s disclosures,
including monitoring their television and radio appearances, websites and blogs. Last, ADT must immediately
terminate its relationship with any endorsers who misrepresent their impartiality or fail to disclose their material
connection with ADT.
The FTC’s latest settlement should serve as reminder to all marketers that they need to ensure that their
spokespersons are disclosing their material connections (e.g., payments or free products) when endorsing the
marketer’s products in non-traditional media, such as talk shows, blogs and websites. According to the FTC, it
is not enough for marketers to remind their spokespeople about their duty to disclose but marketers should be
monitoring their spokespeople’s compliance, including their television appearances, blogs and online
communications.
Sadly, I must conclude this article, as TMZ is on and I need to get my daily dose of news and current events....
Reprinted with permission from The Huffington Post
ABOUT THE AUTHOR
Allison Fitzpatrick frequently counsels clients on new media issues, including with respect to social
networking, user-generated content, mobile marketing and other emerging media. She develops clients’
blogging and social media policies and procedures and reviews clients’ social media campaigns to ensure
compliance with the Federal Trade Commission’s Endorsement Guides and .com Disclosure Guides.
Ms. Fitzpatrick also speaks about and advises clients on all aspects of children’s advertising and privacy, including
compliance with the Children’s Advertising Review Unit’s Self-Regulatory Guidelines and the Children’s Online Privacy
Protection Act (COPPA). She routinely reviews websites, apps, privacy policies and promotions to ensure compliance
with COPPA and other privacy laws. She has represented clients in proceedings before the Children’s Advertising
Review Unit and the National Advertising Division and in state regulatory investigations, including comprehensive
multi-state actions, most notably in connection with negative option marketing and free trial offers. She may
be reached at 212.468.4865 or [email protected].
T: 212.468.4800 | F: 212.468.4888 | 1740 Broadway, New York, NY 10019 | www.dglaw.com