As part of its ongoing monitoring program, the National
Advertising Division (NAD) reviewed endorsements by Kourtney and
Khloe Kardashian and Kylie Jenner (the Kardashians) that failed to
disclose that they were paid to endorse a dietary supplement known
as "Fit Tea" in their social media posts. In response to
the NAD's action, Fit Tea revised its social media posts to
disclose Fit Tea's material connections with its celebrity
The Federal Trade Commission (FTC) Endorsement and Testimonial
Guides (FTC Endorsement Guides) require clear disclosure of any
material connections between an advertiser and its influencers and
other endorsers, including when their endorsements are posted on
social media platforms such as Twitter and Instagram. The FTC
contends that, in the absence of such disclosure, consumers might
believe that an endorsement on social media is a spontaneous
recommendation of a product made without any compensation rather
than a paid endorsement.
Regulatory and self-regulatory agencies, including the NAD, have
indicated that disclosing whether an influencer has been paid for
his or her endorsement is even more important when the influencer
is a well-known celebrity because consumers – and, in
particular, a celebrity's fans – may afford more weight
to a celebrity's endorsement than to the endorsement of other,
lesser known individuals.
Fit Tea Case
The NAD reviewed the Kardashians' endorsements posted on
Twitter, Instagram and other social media platforms because it was
concerned that the "material connections" between the
Kardashians and Fit Tea – that is, the fact that the
Kardashians were paid to endorse Fit Tea – had not been
adequately disclosed to consumers. In many cases, the Kardashians
took selfies with the Fit Tea products, described the products as
their 'favorite,' or touted the products as staples of
their daily routine. The NAD explained that adequate disclosure was
critical because "[c]onsumers are likely to weigh an opinion
differently if it is a paid endorsement for a product. As a result,
such a payment is a connection that is material to consumers and
should be disclosed."
In response to the NAD action, Fit Tea agreed to revise its
celebrity endorsements to disclose that its celebrity endorsers
were paid to endorse Fit Tea and agreed that its future advertising
would comply with the FTC Endorsement Guides.
Because Fit Tea voluntarily agreed to modify its social media
posts, the NAD did not review the matter on the merits. Although
the NAD said that, for compliance purposes, it would treat Fit
Tea's voluntary decision to modify its advertising as if NAD
had recommended changes to Fit Tea's ads and Fit Tea had agreed
to comply with that recommendation. Therefore, the NAD could
initiate a compliance proceeding against Fit Tea if the Kardashians
fail to include proper disclosures in their future Fit Tea
This NAD action comes on the heels of another NAD action against
Fit Tea, where the NAD recommended that Fit Tea discontinue certain
customer testimonials which claimed that Fit Tea "boosts
energy" and "supports metabolism" because the
advertiser did not have adequate support for these claims. The NAD
cautioned Fit Tea that it should 1) ensure that its paid endorsers
avoid conveying messages for which the advertiser lacks support and
2) that it should not repost testimonials on its web pages that
make claims for which the advertiser lacks support. The NAD also
required that Fit Tea separate its paid endorsements and
testimonials from its authentic user reviews on its website and
conspicuously disclose that its user reviews were not edited by Fit
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Marketers and their agencies are seeing increased regulatory scrutiny of their influencer campaigns as the popularity of influencers continues to grow and influencer networks become a greater marketing force.
The continuing growth in native advertising is leading to increasing regulatory scrutiny into whether consumers can distinguish native advertisements from surrounding non-paid content, and whether disclosures are being used effectively.
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