New International Online Reviews and Endorsements Guidelines Give Practical Guidance to Marketers, Reflect Competition Bureau Policies

by Practical Law Canada Competition
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This Featured Update discusses the recent Online Reviews and Endorsements Guidelines issued by the International Consumer Protection and Enforcement Network (ICPEN). It includes a summary of key principles and guidelines for review administrators, traders and marketing professionals, and digital influencers. It also highlights how these new Guidelines reflect the Canadian Competition Bureau's approach to online reviews and endorsements, as well as other major consumer protection agencies.
Major competition and consumer protection agencies have been increasing their focus on digital marketing, including specific issues, such as online reviews and endorsements.
For example, the Competition Bureau (Bureau) has been increasing its guidance relating to reviews and endorsements. See Competition Bureau: Bulletin, The Deceptive Marketing Practices Digest (Volume 1) (2015). The U.S. Federal Trade Commission (FTC) also recently updated its Endorsement Guides FAQs. See The FTC's Endorsement Guides: What People Are Asking.
Both the Bureau and FTC, as well as other consumer protection bodies, have also been increasing their enforcement efforts in relation to online reviews. See, for example, Federal Trade Commission: Press Release, Warner Bros. Settles FTC Charges It Failed to Adequately Disclose It Paid Online Influencers to Post Gameplay Videos (June 11, 2016) and Competition Bureau: Announcement, Bell Canada reaches agreement with Competition Bureau over online reviews (October 14, 2015).
In the latest major development in this area, on June 30, 2016, the International Consumer Protection Enforcement Network (ICPEN) published three new Online Reviews and Endorsements Guidelines in ICPEN: Online reviews guidelines mark end of CMA's ICPEN presidency (June 30, 2016) (Online Reviews Guidelines). ICPEN's new guidelines are focused on review administrators (organizations or individuals that process consumer reviews), traders and marketing professionals, and digital influencers (for example, bloggers and online publications).
While the Online Reviews Guidelines reflect international best practices and are not law, the Bureau is an ICPEN member, a member of the ICPEN working group that developed the Guidelines and recently announced its support and participation in the preparation of them. For more information, see Competition Bureau: CB in Brief (June 2016).
The Online Reviews Guidelines also reflect a number of key principles set out by the Bureau in its own guidelines and enforcement matters. See The Competition Bureau's Approach to Online Reviews and Endorsements.

Key Principles and Guidelines

ICPEN's new Online Reviews Guidelines are organized according to three types of online marketing participants: review administrators, traders and marketing professionals, and digital influencers.
In general, the Guidelines emphasize that online reviews and endorsements should be based on genuine user experiences (for example, no fake reviews), not be biased (for example, not only display positive reviews) and include adequate disclosures (for example, whether a review or endorsement has been paid for or otherwise compensated).
The Online Reviews Guidelines contain both key principles and guidelines, which include the following:

Review Administrators

The Endorsement Guidelines set out the following key principles for review administrators:
  • Be equal and fair in the collection of reviews.
  • Be alert and proactive in the moderation of reviews.
  • Be transparent in the publication of reviews.
Specific guidelines for review administrators include publishing terms and conditions before collecting reviews, verifying that consumer reviews are authentic, disclosing where administrators or businesses have offered incentives for reviews, maintaining procedures to identify and remove reviews, acting on trader complaints, and disclosing commercial relationships for reviews.
For more information, see ICPEN: Online Reviews & Endorsements: ICPEN Guidelines for Review Administrators (June 2016).

Traders and Marketing Professionals

The Endorsement Guidelines set out the following key principles for traders and market professionals:
  • Do not prevent consumers from seeing the whole picture of genuine, relevant and lawful reviews.
  • Do not write, commission or publish fake reviews.
  • Disclose paid-for content clearly and prominently.
  • Disclose other commercial relationships where they may be relevant to the content.
Specific guidelines for traders and marketing professionals include being fair and impartial when soliciting customer reviews, not pretending to be a consumer or writing fake reviews, identifying advertising and other commercial relationships, and being fair when challenging reviews.
For more information, see ICPEN: Online Reviews & Endorsements: ICPEN Guidelines for Traders & Marketing Professionals (June 2016).

Digital Influencers

The Endorsement Guidelines set out the following key principles for digital influencers:
  • Disclose clearly and prominently whether content has been paid for.
  • Be open about other commercial relationships that might be relevant to content.
  • Give genuine views on markets, businesses, goods and services.
Specific guidelines for digital influencers include disclosing all paid-for content clearly and prominently, disclosing other commercial relationships, giving genuine reviews on markets, businesses, goods or services and saying “no” to non-compliant businesses.
For more information, see ICPEN: Online Reviews & Endorsements: ICPEN Guidelines for Digital Influencers (June 2016).

The Competition Bureau's Approach to Online Reviews and Endorsements

The new Endorsement Guidelines reflect a number of key online review-related issues raised by the Bureau over the past several years, some of the most important of which include:
  • Fake reviews (for example, the person giving the testimonial does not exist or has not used the product).
  • Misleading reviews (for example, they are being made by a person with a material financial or other connection with the company marketing the product, such as employees).
  • Astroturfing (online advertisements disguised as independent consumer reviews).
For more information, see Practice Notes, Misleading Advertising under the Competition Act and Testimonials and the Competition Act and Testimonials and the Competition Act Checklist. See also Competition Bureau: Bulletin, The Deceptive Marketing Practices Digest (Volume 1) (2015) and Competition Bureau: Bell Canada reaches agreement with Competition Bureau over online reviews (October 14, 2015).
The Endorsement Guidelines, however, are broader than the Bureau's guidance to date in that they set out best practices for three specific groups of market participants (review administrators, traders and market professionals, and digital influencers).
Given that ICPEN's members include major international competition authorities, including Canada, the United States, the European Commission and the UK, the Online Reviews Guidelines should prove practically useful to reduce the risk of violating consumer protection laws in connection with reviews and endorsements.
Advertisers and marketers in Canada should, however, also consider the application of the Competition Act, R.S.C. 1985, c. C-34 and the Bureau's specific guidelines when using reviews and endorsements in marketing campaigns.
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Published on 18-Jul-2016
Resource Type Legal update: archive
Jurisdiction
  • Canada (Common Law)
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