By Anthony DiResta, WOMMA General Counsel & Partner at Winston Strawn

Within the past few days, a Complaint was filed with the FTC concerning the social marketing by PepsiCo, that can be found here.

The Complaint against PepsiCo makes three arguments:

1. The campaigns are represented to be a contest, video game, or concert performance, rather than advertising for Doritos.  The company’s marketing efforts are “disguised” and accordingly deceptive.  Apparently, the argument is that the company’s not disclosing to teens the fact that the entertainment is advertising is deceptive under Section 5 under the FTC Act;

2. The manner in which Frito-Lay collects and uses personal information violates Section 5, by (i) making representations that it will protect teens’ personal information and then acting inconsistently with that policy; and (ii) deceiving teens by collecting personal information without adequately disclosing the extent or purpose of that data collection; and

3. The company’s use of personal information to generate Facebook and Twitter endorsements from teens playing its games violates the FTC Guides on Testimonials/Endorsements.

The Complaint and Request for Investigation was written by the Institute of Public Representation.  It is noteworthy that this Institute was headed by David Vladeck, the current Director of the FTC’s Bureau of Consumer Protection, when he was a Professor at Georgetown before coming to the FTC.

It will be interesting to see how the FTC reacts to such far-reaching arguments that, as a practical matter, apply to just about all ad campaigns by major brands.  Nonetheless, it highlights the interest of consumer groups to advertising and marketing on social media platforms.

Read more about social media and word of mouth law at Tony’s WOMMA blog, DiResta-the-Law