On the heels of a significant enforcement action against an ecommerce retailer over customer reviews, the FTC released two new guidance documents.

You might already know that the FTC has brought lawsuits against brands and marketers for hiding negative reviews, paying for positive reviews, creating fake reviews, failing to disclose incentives, and other deceptive acts.

Here are the bullet points, quoting from the new FTC docs:

For marketers:

• Don’t ask for reviews from people who haven’t used your product or service.

• Don’t ask staff to write reviews of your business unless they disclose that relationship.

• Don’t ask for reviews only from customers you think will leave positive ones.

• Don’t ask family and friends for reviews unless they disclose that relationship.

• If you offer incentives for reviews, don’t condition it on the review being positive.

• If you offer incentives, the incentive needs to be disclosed.

For review platforms and review sites:

• Don’t ask for reviews only from people you think will leave positive ones.

• If you offer incentives for reviews, don’t condition it on the review being positive.

• Don’t discourage or prevent people from leaving negative reviews.

• Have some process in place to verify that reviews are real.

• Don’t edit reviews to make them sound more positive.

• Treat negative and positive reviews equally: publish both; don’t feature some more prominently than others.

• Clearly disclose how you collect and display reviews and determine overall ratings.

When the FTC issues “guidance,” more actions typically follow.

But enforcement in this area isn’t new—some other examples:

-In 2015, the FTC sued AmeriFreight, a car shipment broker, because it showcased online customer reviews without disclosing that the reviewers were given discounts and entries into giveaways.

-In 2019, the FTC sued UrthBox for its practice of providing free products to customers in exchange for positive reviews and not disclosing the relationship.

-In 2020, the FTC obtained a $23.9M judgment against student loan debt relief operator who failed to disclose customers were paid to leave positive BBB reviews.

Ana De Armas appeared in the trailer for the 2019 film Yesterday, but she isn’t in the movie.

Fans who claim they only paid to rent the movie through Amazon because of her appearance in the trailer are suing Universal for false advertising.

The lawsuit is a proposed class action on behalf of everyone in California and Maryland who paid to see the movie.

The plaintiffs allege that “consumers were promised a movie with Ana De Armas by the trailer” but didn’t receive such a movie, so they “were not provided with any value for their rental or purchase.”

They claim that Universal couldn’t rely on the fame of the actors who actually appear in the movie to promote sales, so they used De Armas despite cutting her from the cast.

This case reminds me of the class action against Sega over the trailers for the videogame Aliens: Colonial Marines.

In that case, the plaintiffs claimed the promo videos for the game showed gameplay elements that weren’t included in the game itself.

Sega settled that case for $1.25M.

It will be interesting to see how Universal handles this one.

In the meantime, this is a good reminder to ensure that your ads don’t include claims about your products or services that might mislead some consumers as to the qualities and features of their purchases.

False advertising litigation more generally is common and expensive to deal with, even if you’re ultimately right.

Limiting risk early, where you can, will save time and money down the road.

Unless you’re the government, running lotteries is illegal in the U.S.

If you run a sweepstakes or giveaway as part of your NFT project (or anywhere else), you don’t want to risk having your promotion look like a lottery.

What’s the difference?

In a sweepstakes, entrants can win a prize for free based on chance alone.

No purchase, payment, or other consideration is needed, and the winner is picked at random.

In a lottery, the entrant has to give something of value (like buying a ticket or an NFT), called consideration.

So to avoid having your promotion be called a lottery, you need a free method of entry that counts the same as any paid methods.

It is a crime in every state to run a lottery.

And in California, you need to let people know, “clearly and conspicuously,” that no payment is necessary to enter.

As NFTs continue to grow in popularity, you can bet they will attract attention from regulators and plaintiffs’ lawyers.

It’s worth the effort to understand the risks you are taking with how you promote your NFT project, so that you can avoid a surprise lawsuit down the road.