May 28, 2023

The FTC Continues its Enforcement Actions Against Deceptive Endorsements

$9.4 Million Settlement

On November 28, 2022, the FTC, along with Attorneys General from six states, announced a settlement for $9.4 million with Google and iHeart Media for deceptive endorsements by radio personalities.

The FTC claimed that Google hired iHeartMedia and 11 other radio networks to record and broadcast endorsements promoting Google's Pixel 4 phone.

The catch: the endorsers weren't actual users of the Pixel 4.

According to the FTC's Consumer Protection Director, Samual Levine: “Google and iHeartMedia paid influencers to promote products they never used, showing a blatant disrespect for truth-in-advertising rules.”

The FTC alleged that Google provided iHeart Media with scripts promoting the Pixel 4.

    *  “It's my favorite phone camera out there, especially in low light, thanks to Night Sight Mode.”

    *  I've been taking studio-like photos of everything.”

    *  “It's also great at helping me get stuff done... .”

However, the Pixel 4's weren't provided to the endorsers until after most of the ads had been aired.

Takeaway

Previously, the FTC's claims against deceptive endorsements had focused on the following:

    *  An endorser's failure to disclose payment (or other benefits) as compensation for an endorsement, and

    *  Suppression of customer reviews.

In this case, the claim was that the endorsers were not bona fide, actual users of Google's Pixel 4 phone.

Another noteworthy takeaway is that the FTC filed not only against the advertiser (Google) but also the media company (iHeart Media) as well.