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Last Thursday (Aug. 26), the Federal Trade Commission (FTC) announced that Reverb Communications had settled charges alleging that the public relations firm had engaged in deceptive advertising practices by having its employees write and post positive reviews of clients’ games in the Apple iTunes Store, without disclosing that they had been compensated to do so.
The settlement brings to a close the Commission’s first case under its revised “Guidelines on the Use of Endorsements and Testimonials in Advertising,” which took effect Dec. 1, 2009.
Those guidelines state, in part, that advertisers (in this case Reverb) are subject to liability for failing to disclose material connections between themselves and their endorsers. In a section entitled, “Disclosure of Material Connections,” the guidelines state that: Continue reading