While the FTC enforces all consumer protection laws, it tends to focus on one particular area at a time in an effort to scare participants into compliance. Recent actions suggest the FTC may be turning its attention to online review sites and those people endorsing products who fail to comply with disclosure guidelines.
The FTC started stressing in 2009 that online marketers need to disclose any relationship between an advertiser and reviewer or endorser. This definition includes an affiliate relationship.
Affiliates reacted to the FTC publicity campaign by getting into compliance, for the most part. Then the FTC turned to other legal issues without really enforcing the new rules any further. Affiliates breathed a sigh of relief and started slacking off on their disclosures. The FTC may have taken notice of this development.
Is the FTC about to start an enforcement action push against review and affiliate sites? The agency has released two recent videos on its YouTube channel on the subject, which you can see below.
There have been instances in the past where the release of this type of information has been followed by major enforcement issues. It seems to be a sort of, “We warned you…” type of approach.
The web is ripe for such an enforcement push as there are millions of sites blatantly ignoring the endorsement guidelines. You should be reviewing your content to make sure you are not one of them.
FTC enforcement actions assert damages of between $11,000 and $16,000 per violation on your site. This means if you failed to disclose a relationship on 10 product reviews, you could be looking at a fine of between $110,000 and $160,000.
You’ve been warned…
Richard A. Chapo, Esq.
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