United States: FTC Takes Hard Line On Social Media Endorsements: Disclose, Disclose, Disclose... (It Matters Given Growing Reliance On Social Media)

The Federal Trade Commission (FTC) has unequivocally signaled this month that compliant endorsements on social media remain a high priority for this US consumer protection agency because endorsements carry weight and affect buying decisions. A social media endorsement can be as simple as liking, tagging or picturing a brand, or a more detailed review or shout out. However, disclosing whether the plug for the brand is potentially incentivized by a payment, free product, or family, employer or other material connection with the brand may not be quite as simple according to the FTC. Details follow, but here's the takeaway up front: For influencers, that means take care with your disclosures of your relationships with brands in the context of ever evolving social media. For advertisers, that means it may be time to update your social media policy or influencer contract, and continue to monitor that influencers comply with their disclosure obligations.

What's New?

Continuing enforcement of its Endorsement Guides, the FTC announced its first settlement with individual influencers (rather than advertisers that work with influencers). Trevor Martin and Thomas Cassell (better known online as "TmarTn" and "Syndicate") allegedly engaged in deceptive practices by failing to disclose they own and operate the online gambling service "CSGO Lotto" that they widely promoted across social media. In addition, the FTC announced it issued "warning" letters to 21 influencers from among the 90 recipients of prior "educational" letters from the FTC sent this past spring. According to the new round of letters, the FTC considers some influencers previously contacted still fail to "clearly and conspicuously" disclose their business relationship with the brands or products they promote. The warning letters ask recipients to notify FTC staff by this month's end whether they do, in fact, have a material connection with the brands/products described in the letters and, if so, how they will clearly disclose such a relationship in the future. Finally, the FTC updated its "What People Are Asking" guidance on the Endorsement Guides with new examples featuring common social media advertising channels such as Facebook, Instagram, and Snapchat, which are highlighted below.

FTC Issues Updated Endorsement Guidance, Spot Lights Proper Social Media Disclosures

While the refreshed "What People Are Asking" guidance on the Endorsement Guides (or FAQs) are not "new" guidance as far as the need to disclose an influencer's relationship with a brand, this guidance further clarifies when and how the Endorsement Guides apply across social media. Here are some important learnings:

  • Not all disclosures of an influencer's relationship with a brand are equal or adequate as far as meeting the required "clear and conspicuous" standard.

    • For example, disclosures for Snapchat and other image-only platforms should be superimposed over images, not reserved off-screen.
    • Disclosure that a post is paid using solely an "#ambassador" hashtag is probably insufficient because it could be ambiguous to consumers what that means. Using "#[brand name]-ambassador" is probably more understandable, but has to be evaluated within the context of the post overall.
    • Merely thanking the company that paid the influencer (e.g., "Thanks, [brand]") likely is insufficient because the gratitude could also come from an uncompensated satisfied customer. Providing additional information that indicates some benefit was received by the influencer (e.g., "Thanks, [brand], for the free product") may be good enough.
  • Likes, tags, pins and other subtle endorsements are endorsements. The new guidance acknowledges that some social media platforms make it difficult for paid influencers to adequately disclose their material relationships, and notes that advertisers shouldn't encourage endorsements from paid influencers using such features. However, the guidance notes that whether the FTC would take action against such endorsements would depend on the overall impression of the advertising campaign, including whether the "likes" at issue have a material impact on consumers' decisions to patronize a brand or buy a product.
  • Influencers should disclose when products are received for free, even when review of the product was not a condition of receipt.
  • Section 5 of the FTC Act, which gives the FTC its endorsement enforcement authority, applies to international influencers promoting products that are sold in the United States, if it is foreseeable that their promotion would be seen by and affect U.S. citizens.
  • Remember there is no one size fits all disclosure for relationships with a brand... How the disclosure is worded, its appearance and placement should be evaluated in the overall context of the advertising message and the particular social media platform as far as meeting the clear and conspicuous disclosure requirement.

In light of this new guidance and recent FTC activity, both advertisers and influencers should consider reviewing their social media endorsement disclosure practices and contracts with one another. The FTC has a variety of investigative and enforcement powers, and it is not generally considered desirable to become a FTC test case. Even parties that settle with the FTC (neither admitting nor denying fault) may be subject to stiff monetary penalties and long-term monitoring and audit of their advertising practices by the FTC.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions