FTC Commissioner Proposes Making Endorsement Guides Into Rules, Seeking Stiffer Penalties
At least one FTC commissioner seems convinced that the agency’s Enforcement Guides are ripe for an update to address unscrupulous influencer marketing practices. Democrat Rohit Chopra proposes their codification into formal rules that would make violators liable for civil penalties and damages.
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US FTC commissioners Rohit Chopra and Rebecca Slaughter maintain that the agency’s no-money, no-fault settlement with Sunday Riley Skincare, now finalized, sends a message of FTC permissiveness regarding fake online reviews that artificially boost brands’ standing and product sales.
Non-monetary settlements are more effective than litigation at changing consumer product companies’ advertising practices, says FTC Commissioner Christine Wilson. “We see non-monetary settlements curtail behavior and require sometimes fundamental changes in the way companies do business.”
Companies should seek legal counsel when making “Made in the USA” claims, particularly if the Federal Trade Commission’s proposed rule on the subject is adopted as drafted. Published in July, the proposed rule would enable the FTC to obtain civil penalties from violating firms “more quickly and easily," attorneys say.