Product endorsements in social media to be policed by US regulators

NEW YORK - Brands could be held responsible for false claims written by third parties online, including bloggers for product samples, under new guidelines currently being reviewed by the Federal Trade Commission.

The regulatory changes, which are expected to be adopted, would also hold bloggers liable for the statements they make about products that they received for free from the brand.
For example, if a blogger received a free sample of moisturising cream and then incorrectly claimed that it cured eczema, the FTC could sue the brand owner for making false statements and the blogger could be sued for making false representations.

The proposed legislation comes as advertisers continue to increase their spending on social media and viral marketing on sites such as Facebook and Twitter.

The changes were criticised by Richard O'Brien, vice-president of the American Association of Advertising Agencies, who said it was premature to regulate blogs or other forms of new media.
O'Brien wrote in a letter to the FTC: "Regulating these developing media too soon may have a chilling effect on blogs and other forms of viral marketing, as bloggers and other viral marketers will be discouraged from publishing content for fear of being held liable for any potentially misleading claim."
The FTC's guidelines on testimonials have not been altered since 1980.
The US Internet Advertising Bureau also opposed the proposals in a separate letter to the FTC. Mike Zaneis, vice president for public policy at the IAB, said: "Requiring marketers to be responsible for the actions of third parties over whom they exercise uncertain control could create unintended consequences for new media."

Source: Brand republic April