For years the Federal Trade Commission (FTC) has made clear to advertisers that they are responsible for messages on social media by their employers or by consumers and celebrities and other influencers with which they have a material connection (e.g., they are employed, paid or given anything of value, even discounts, samples, coupons and sweepstakes entries). We have blogged many times about how the FTC applies its deception authority to use of social media and native advertising to promote products and services, most recently here. However, the FTC has now turned its attention to the influencers themselves, recently sending almost a hundred warning letters to individuals who have apparently promoted brands for personal gain without disclosing that in their social media messages.
On April 19, 2017, the FTC issued a press release stating that more than 90 letters had been sent to influencers and marketers regarding potential social media endorsements (an example letter is available here). The FTC press release, available here, was prompted by a petition by public interest groups, led by Public Citizen, which notified the FTC that hundreds of certain specifically identified celebrities and influencers were using social media platforms such as Instagram to engage in “disguised advertising directed toward young consumers.” (The Public Citizen letter to the FTC is available here.) According to Public Citizen, social media users were being deceived by celebrities and influencers that promoted products while claiming they were enthusiastic users of such products without disclosing their paid sponsorship.
An influencer’s failure to disclose the endorsement of a brand or product has been heavily regulated by the FTC, though it is the advertiser that had previously received all the FTC’s attention. The FTC requires that an influencer or endorser of a product provide clear and conspicuous disclosure of the material connection between the product and the endorsement on social media, and holds the sponsor responsible for making sure the influencer effectively does so. A “material connection” is a “connection that might affect the weight or credibility that consumers give the endorsement.” To address the FTC’s concerns with endorsements and material connection, the FTC updated its Endorsement and Testimonial Guides in 2009 to guide spokespersons or influencers on when disclosure would be required and what would be sufficient disclosure. The FTC Endorsement and Testimonial Guide is available here, with a helpful follow-up FAQ from the FTC concerning the guide here. We previously discussed this topic in a blog article available here.
However, with the rise of social media influencers and celebrity endorsements on a variety of social media platforms, the FTC’s recent letters to influencers and marketers indicate the FTC’s renewed focus on this form of deceptive advertising to consumers. If an influencer has a material connection to the marketer, the FTC’s letter reminds influencers that (1) the disclosure must be conspicuous, be clear and use unambiguous language to make the disclosure stand out (e.g., on Instagram, the consumer should not have to click “more” to see the disclosure) and (2) if there are multiple hashtags, tags or links, the disclosure of #ad or another advertising disclosure should be conspicuous and clearly communicated to the consumer without getting buried in other text.
BakerHostetler lawyers Alan Friel and Stephanie Lucas, along with Andy Marcus, the general counsel of a leading social media influencer promotions agency, recently wrote an article for Los Angeles Lawyer Magazine detailing the FTC’s regulation over influencers and native advertising, and provided practical tips and examples of how to comply in an organic way that does not disrupt the message. Published in the magazine’s 2017 entertainment issue, the article details the specific issues surrounding the FTC’s Endorsement and Testimonial Guides, native advertising, and the legal issues surrounding influencer marketing on social media (available here).
For more information, contact the authors. Alan Friel and Stephanie Lucas are members of the firm’s Advertising, Marketing and Digital Media and Content and Platforms practices, and regularly advise brands, retailers and ad agencies on legal compliance issues.