USA Law and Practice Contributed by: Katelyn Patton, Frankfurt Kurnit Klein & Selz
2.3 Substantiation of Advertising Claims Advertisers are generally responsible for ensuring that they have proof for their advertising claims prior to the dissemination of those claims. As a general matter, advertisers must have a “reasonable basis” for their claims. Where advertisers claim to have a specific type of support for their claims (such as “tests prove” or “studies show”), they must have that support. What constitutes a “reasonable basis” will depend on a variety of factors, including the type of claim, the product, the consequences of a false claim, the benefits of a truthful claim, the cost of developing sub - stantiation for the claim, and the amount of substan - tiation that experts in the field believe is reasonable. In some cases, such as claims involving consumers’ health or safety, the FTC expects advertisers to have “competent and reliable scientific evidence” to sup - port the claims. 2.4 Product Demonstrations When the performance of a product is shown in adver - tising, advertisers are generally responsible for ensur - ing that the performance shown is real (without any special effects or other modifications) and that the performance shown reflects the performance that consumers can generally expect to achieve when using the product. 2.5 Endorsements and Testimonials The primary guidance on the use of endorsements and testimonials in advertising is set forth in the FTC’s “Guides for the Use of Endorsements and Testimoni - als in Advertising” (the “Endorsement Guides”). The FTC also recently promulgated a Trade Regulation Rule on the Use of Consumer Reviews and Testimo - nials (the “FTC Consumer Review Rule”). Although the FTC and others have issued a great deal of guidance on this topic, when using endorsements in advertising, advertisers should keep in mind three key principles as a starting point. First, the endorse - ment should reflect the endorser’s honest opinions, findings, beliefs and experiences. Second, endorsers should not make advertising claims that the advertiser could not make itself. In other words, if an endorser makes a claim about the performance of a product, the advertiser must be able to substantiate that this
This has led to some self-regulatory enforcement in this area as well. 1.11 Politics, Regulation and Enforcement The laws governing advertising and marketing have remained relatively consistent over time and there has been a remarkable continuity in enforcement priorities as well. That being said, when the government leader - ship changes at either the federal or state level, regu - latory enforcement priorities ‒ and the ways in which enforcement is engaged in – do change. The FTC is currently engaging in an aggressive enforcement programme (seeing bigger damages and tougher remedies) and has been using a wide range of methods (including engaging in rule-making, issuing notices of penalty offences, and issuing new guid - ance) to address practices that it is concerned about. One of the main issues that the FTC is particularly concerned about right now is how big tech, emerg - ing technologies and the online ecosystem can harm consumers. In general, whether an advertising claim is deceptive or misleading is determined from the perspective of the “reasonable consumer”. The FTC defines decep - tion as a material misrepresentation or omission that is likely to mislead a consumer acting reasonably in the circumstances. Some state laws, however, define deception more broadly ‒ considering claims from the perspective of the ignorant, unthinking and credulous consumer. 2.2 Regulation of Advertising Claims 2. Advertising Claims 2.1 Deceptive or Misleading Claims Advertisers are generally responsible for ensuring that all express and implied claims communicated by their advertising, where material to consumers’ pur - chasing decisions, are truthful and substantiated. No substantiation is required for “puffery”. Puffery is an exaggerated or hyperbolic claim ‒ expressing an obvi - ous statement of opinion ‒ that is not subject to proof and that consumers would not rely on when making a purchasing decision.
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