November 12, 2021

eCommerceBytes Quotes Len Gordon on the FTC’s Warnings Against False Reviews and Deceptive Endorsements

2 min

On November 6, 2021, Venable partner Len Gordon was quoted in eCommerceBytes on the Federal Trade Commission’s (FTC) warning letters alerting sellers that blurring the line between authentic content and advertising can result in steep penalties.

According to the article, the FTC sent letters to more than 700 companies in October, warning them that circulating fake reviews or other forms of misleading endorsements could cost them tens of thousands of dollars in penalties. The letters don’t necessarily signal that the recipients did anything wrong, but are meant to serve as a warning that the FTC is actively monitoring the space

The letters are indicative of a more muscular approach to consumer protection at the FTC under Chair Lina Khan, according to Gordon.

“Endorsements and testimonials are powerful forms of advertising. They always have been, but they’ve become more so I think with the explosive growth of social media,” Gordon said. “It’s powerful in some ways because consumers might not understand that it’s paid advertising,” he added. “The FTC is concerned that consumers won’t apply the skepticism of that kind of speech that they might when they see a person on TV saying, “this stuff makes my clothes cleaner.””

Gordon suggests that sellers and other advertisers approach endorsements and testimonials carefully, and err on the side of transparency. “If people are endorsing your product and they’re getting paid to do that, that needs to be disclosed,” he said.

Click here to access the article.