Following recent setbacks, the FTC seeks a foothold for monetary remedies in the online advertising space.

By Jennifer C. Archie, Antony “Tony” Kim, Michael H. Rubin, and Marissa R. Boynton

On October 13, 2021, the Federal Trade Commission (FTC) sent a Notice of Penalty Offenses Concerning Endorsements and Testimonials to more than 700 businesses (the Notice). The Notice does not identify any alleged violations of law. Rather, it reminds recipients that fake online reviews and misleading endorsements are unlawful and highlights that the FTC intends to seek monetary relief if any of those 700 companies engages in conduct outlined in the Notice.

In citing past administrative cases, several of which date back to the 1940s and 1950s, the FTC warns brands and advertising agencies that using endorsements or testimonials in ways that run counter to these cases may expose them to civil penalties of up to US$43,792 per violation. The Notice follows on the heels of a similar warning regarding deceptive or unfair practices that was issued earlier in October to 70 for-profit higher education institutions.

Read the full Client Alert.