Why Celebrity Endorsers Should Watch What They Say

Revised FTC Guidelines Hold Stars Responsible for False Claims in Ads

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Michael Mallow
Michael Mallow

"I'm not a doctor, but I play one on TV."

This near cult phrase from a 1986 cough-syrup commercial was intended to prevent consumers from confusing the actor, Peter Bergman, from the physician he portrayed in the soap opera "The Young and the Restless." Consumer confusion remains the core driving force behind advertising and marketing regulation. To that end, the Federal Trade Commission's proposed revised "Guides Concerning the Use of Endorsements and Testimonials in Advertising" expressly serves notice on expert and celebrity endorsers: The commission will not only hold an advertiser responsible for false or misleading advertising, but expert and celebrity endorsers as well.

On Nov. 21, 2008, the FTC circulated for public comment its revised endorsement and testimonial guidelines. Within these proposed guides, the FTC acknowledged that "well-known persons can appear in advertising without being deemed endorsers" of a product. In general, celebrities who do not endorse a product are not held liable for false or misleading advertising related to the product. But if a celebrity is an endorser, the celebrity can be responsible for false or misleading statements he or she makes.

To determine liability, the first question is whether the celebrity is an endorser or just a paid actor. The FTC defines an endorsement as "any advertising message (including verbal statements, demonstrations or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings or experiences of a party other than the sponsoring advertiser." So what qualifies as an endorsement? Like most issues involving advertising regulation, the answer is that it depends. But the commission's guides offer a number of examples intended to frame the endorser guidelines.

Fictional characters don't count
The commission's illustrations suggest that actors hired to perform in a commercial depicting fictional characters are not endorsers. So two actors in a commercial purchasing laundry detergent at the supermarket will not constitute an endorsement even if the characters in the commercial discuss the characteristics and quality of the product. In contrast, a celebrity serving as a host in a home-fitness-system infomercial who comments about the system, even if scripted, is an endorser. Essentially, the question is whether someone watching the commercial could reasonably believe that what the celebrity says is the celebrity's own views about the product or service.

If a celebrity is an endorser, then the endorsement must "reflect the honest opinions, findings, beliefs or experiences of the endorser; and an endorsement may not convey any express or implied representation that would be deceptive if made directly by the advertiser." For example, a celebrity could not say that she loves brand X mustard and eats it all the time when she actually hates mustard and never uses the product. Similarly, a celebrity cannot state in a commercial that a chicken roasting bag will cook a perfect chicken in 30 minutes, when prior to shooting the commercial the celebrity watched five failed attempts to cook a chicken in the bag within 30 minutes.

Michael Mallow is a business trial lawyer in the Los Angeles office of Loeb & Loeb. He represents and advises clients on issues involving interactions between businesses and consumers.

Celebrities are not only liable for what they say but also what they do not say. Given the proliferation of celebrity endorsers touting products and services on talk shows and in interviews, the commission's guidelines indicate that, when applicable, celebrities should disclose that they are paid endorsers when talking about their personal use of products or services. So if a celebrity appears on a late-night talk show and discusses a new herbal supplement he is taking and the wonderful impact it is having on his health, he must disclose he is also getting paid by the manufacturer as a spokesman for the product. Absent such disclosure, the FTC has determined that consumers are likely to be mislead, because consumers would not expect that a celebrity discussing his personal use of an herbal supplement "in a television interview to be paid for doing so, and knowledge of such payments would likely affect the weight or credibility consumers give to the celebrity's endorsement."

The commission has sought to hold celebrities liable for false and misleading advertising in the past, as seen with the lawsuit the FTC filed, and ultimately lost, against Los Angeles Dodger baseball great Steve Garvey related to his endorsement of a weight-loss product. But while the FTC's proposed revised guidelines may not necessarily constitute a new standard for enforcement actions, they are certainly a distinct warning to advertisers and endorsers of what the commission expects, and that greater enforcement activity may be on the way.

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