FTC new rules on endorsement

[sunward]

For information for all:

FTC has published new rules and guidelines regarding the Use of Endorsements and Testimonials in Advertising.
FTC Guidleines
The pdf is at:
pdf notice
This is not directed to anyone or any company, but for the record.

The site is a little busy today and most do not apply to rocket companies as last I checked, there is noone getting endorsements from "famous" people or running TV commercials. What would seem to be most relevant would be:

Disclosure of material connections.
When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.

Example 7:

Example 7: A college student who has earned a reputation as a video game expert maintains a personal weblog or "blog" where he posts entries about his gaming experiences.....the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog......Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge.

Example 8:

An online message board designated for discussions of new music download technology is frequented by MP3 player enthusiasts.....Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturer's product....Therefore, the poster should clearly and conspicuously disclose her relationship to the manufacturer to members and readers of the message board.

Substitute rocket for video game or MP3 player. The pdf is 80 pages long, and I am not going to review it all or what the penalties owuld be, but just so everyone knows.

Sunward will make sure all products sent free to bloggers, web sites, etc, etc will have a disclaimer attached or posted.

[UMRS]

Please note this about FTC rulings


The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.

[troj]

It may not be a legal document, but it's just good ethics.

For that very reason, Extreme Rocketry didn't want reviews of products from people who had received the products for free. It prevents bias.

-Kevin

[sunward]

...The Guides are administrative interpretations of the law intended to help advertisers comply....

Posted as guidelines.

... Extreme Rocketry didn't want reviews of products from people who had received the products for free. It prevents bias....

I am not sure that position is accepted by all.

And there is an easy way around it. Have the reviewer "purchase" what they are reviewing, but help out in the future.

[shrox]

I wouldn't be too worried about any of it, if Neil Young wants to promote his Lionel Trains in a song, that's fine.

[evil ed]

And there is an easy way around it. Have the reviewer "purchase" what they are reviewing, but help out in the future.

I see nothing wrong with someone honestly reviewing a product that they received for free as long as:
1) The reviewer stated the circumstances under which he received the free goods.
and
2) The goods offered are not part of a quid pro quo for a good review.

The offer of "purchase" now but will "help out in the future" could be misconstrued.

Evil Ed

[stickershock23]

It may not be a legal document, but it's just good ethics.

For that very reason, Extreme Rocketry didn't want reviews of products from people who had received the products for free. It prevents bias.

-Kevin

Thats a good rule of "thumb" how about demo flights? dont our "rules" state that the person flying the demo must "work for the company" (on the payroll)
Isn't that kind of opposite of that rule? not only did they get the "demo" for free, they get paid to fly it too? now thats gotta show some real "bias"
same goes for me, If I give you a set of decals for free or pay you to put them on your "rocket" of course your going to have a biased opinion.

Am I getting this correct or am I way out in left field again?

"that don't make no sense"

[sunward]

Thats a good rule of "thumb" how about demo flights? dont our "rules" state that the person flying the demo must "work for the company" (on the payroll)
Isn't that kind of opposite of that rule? not only did they get the "demo" for free, they get paid to fly it too? now thats gotta show some real "bias"
same goes for me, If I give you a set of decals for free or pay you to put them on your "rocket" of course your going to have a biased opinion.

Am I getting this correct or am I way out in left field again?

"that don't make no sense"

You are confused.

What demo rules?

If you give away free decals to a whole bunch of people, say for an event, then it is clear what the intent is. If you give to one person, they fly, and then do a review, they are biased.

As always, these are guidelines. I don't see the FTC coming after you for one decal.

[falingtrea]

Nothing in the FTC examples says that something is wrong. Just that relationships need to be disclosed. As long as you explain the circumstances, there is no issue. That is why you see notes like "Paid Endorsement " on some advertisements.

[stickershock23]

You are confused.

What demo rules?

If you give away free decals to a whole bunch of people, say for an event, then it is clear what the intent is. If you give to one person, they fly, and then do a review, they are biased.

As always, these are guidelines. I don't see the FTC coming after you for one decal.

Got it, (thats what I had hopes at least)

I cant remember where but in one thread we talked about Having to be a "Paid representative" of any company when flying DEMO's at sanctioned launches. (thats what I could be wrong about)