iDuchess here with a quick update on a case I brought to you back in November of last year where the FTC and multiple state AGs brought an action against Google and iHeartMedia for deceptive endorsements in their advertising, read it here.
This case is now settled for a whopping 9.4 million dollars, ouch! If you will recall Google paid iHeartMedia 2.6 million dollars to run ads of radio personalities giving personal endorsements of the Pixel 4 phone and specifically the photo capabilities. Turns out none of them even had the phone and all the glowing reviews were fictitious. Eventually, very few phones were delivered maybe around 4 or 5 compared to the 29,000 times ads promoting the product aired a crossed the country in 10 major markets.
Not only did both Google and iHeartMeadia get hit in the pocket they now also have a series of recordkeeping and compliance monitoring obligations they must comply with which arose from the order. For instance, Google must meet the following recordkeeping requirements centered around endorsements, which honestly seems easy enough.
F. For any Endorser who is paid by or on behalf of Respondent for, or who is contractually obligated to provide, an endorsement subject to this Order: (a) records indicating the Endorser’s name and contact information used to communicate with the Endorser, or if Respondent and its agents and representatives did not communicate directly with the Endorser, then the name of the Endorser’s agent or representative and contact information used to communicate with that agent or representative; (b) records indicating whether Respondent or its agents or representatives provided the Endorser with the endorsed Covered Product; and (c) a copy of each unique endorsement by the Endorser.
If you are going use testimonials or endorsements to promote your products make sure you can substantiate all claims and that the product was actually delivered and used. Be sure to check out the FTC guide created to assist marketers in this area.
