It is important to remember that the Endorsement Guides are administrative interpretations of the FTC Act but are not binding laws themselves. Therefore, while the Endorsement Guides set forth general principles that the FTC uses in evaluating endorsements and testimonials, the question of whether a particular endorsement or testimonial is deceptive will depend on the specific facts of the advertisement in question. MORE FTC UPDATES: PROPOSED REGULATIONS ON CONSUMER REVIEWS AND TESTIMONIALS Following the release of the updated version of the Endorsement Guides, the FTC also proposed a new regulation titled Rule on the Use of Consumer Reviews and Testimonials. The Proposed Rule would officially prohibit certain types of conduct that are described in the Endorsement Guides. Examples of conduct that would be prohibited under the Proposed Rule include: 1. Fake consumer reviews, consumer testimonials or celebrity testimonials, 2. Repurposing a review written for one product so that it appears to have been written for a different product, 3. Compensation for positive or negative consumer reviews, and 4. Consumer reviews written by officers or managers of a business absent “clear and conspicuous” disclosure of the individual’s relationship to the business. 5. These are just a few examples of conduct that would be covered by the Proposed Rule. Once the Proposed Rule is published in the Federal Register it will be open to the public for a 60-day comment period. The FTC will consider the public comments when deciding how to implement the Proposed Rule. NEXT STEPS FOR DEALERSHIPS The updated Endorsement Guides and possible implementation of the Proposed Rule require businesses to closely evaluate their internal and external advertising policies, including consumer reviews and presentations on social media platforms. To the extent you have additional questions, we recommend reviewing the Endorsement Guides with legal counsel to determine if any changes to your practices are necessary. Our attorneys are available to answer questions and provide further counsel on whether your business’s advertising and marketing efforts are meeting FTC guidelines. WHAT DO DEALERSHIP TRANSACTIONS IN NEW ENGLAND LOOK LIKE? The Phillips Report is the only publication that specifically speaks to auto dealership transaction values, trends and trajectories in the New England and New York market areas. DOWNLOAD THE REPORT WWW.NANCYPHILLIPS.COM/BLOGS Please contact Hilary Holmes Rheaume at hrheaume@bernsteinshur.com or Afra Danai at adanai@bernsteinshur.com. 17
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