United States: An Influencer Award For A Kardashian, But Not From The FTC

Last Updated: May 22 2018
Article by Jessica L. Turko and August T. Horvath

If you've ever lamented that Kim Kardashian West just doesn't receive enough recognition for her efforts at promoting her own and other brands, we have exciting news for you. Women's Wear Daily reports that the Council of Fashion Designers of America (CFDA) announced last week that Kim will be the recipient of its first ever "Influencer Award" at the CFDA Fashion Awards on June 4.

CFDA's decision to bestow an Influencer Award reflects the reality of marketing in the age of social media: celebrities who share branded content in sponsored social media posts wield enormous marketing power to reach and influence consumers. In fact, some celebrities today achieve their celebrity status entirely through the power of social media, finding fame by amassing large numbers of followers on Instagram, Twitter and other platforms. And CFDA's decision to honor Kim with the award is not surprising – with over 111 million Instagram followers, she is an influential social media force; it is speculated that she commands more than $250,000 for each of her sponsored posts. Indeed, Kim's May 9 Instagram post announcing that CFDA had chosen her for the Influencer Award, in which she eloquently expresses her gratitude and excitement with "OMG OMG OMG", has almost 3 million likes.

Not Playing by the Rules

It's hard to know the judging criteria that CFDA used in choosing Ms. Kardashian West, but we suspect that whether the influencer has a history of paying the most scrupulous attention to the rules of full disclosure was not high on the list.  Those rules are the guidelines that have been set forth by the Federal Trade Commission (FTC) for social media influencers. In 2016, consumer protection organization Truth in Advertising (TINA) filed a complaint with the FTC against the members of the Kardashian family, including Kim, alleging that they violated FTC endorsement guidelines by failing to disclose that they were compensated for branded social media posts. A year later, TINA followed up and reported that the Kardashians had only corrected or removed approximately 45% of their social media posts that failed to disclose their material connections to the brands they promoted, and that some of their corrections, for example by adding "#ad" to posts, came days after the posts had been published, when they had already been liked by millions of followers.

FTC Guidelines for Influencers

So as we look forward to Kim's acceptance of the CFDA Influencer Award, when she will somehow find herself yet again, OMG, in the media spotlight, we thought this would be a good opportunity to remind her, and other social media influencers, of the rules for posting sponsored content, as set forth by the FTC:

  1. If you have a material connection with a brand that you endorse on social media, you must disclose it in your post. Tagging a brand qualifies as "endorsing" the brand. A "material connection" can mean that the brand paid you for creating a post featuring its goods or services, that the brand gave you its product as a gift in exchange for your post, or that you work for the brand.
  2. An opportunity to win a contest is a material connection, even if you do not win. If you post branded content to enter a hashtag contest, your post must make it clear that you have been incentivized to post branded content by the possibility of winning the contest, and you are not an impartial consumer of the branded product you are showcasing. Brands running contests should require both their branded hashtag and #contest for posts to qualify for entry into the contest.
  3. If you are required to make a disclosure, it must be "clear and conspicuous". To be clear, use #ad or #sponsored, not #sp. Ambiguous tags like #ThankYou, #partner and #ambassador are unlikely to be effective. To be conspicuous, place your disclosure prominently. The #ad or #sponsored should not be buried within a sea of hashtags, should not be part of a larger hashtag, e.g., #brandxad, and should not appear after the "more" line of the post.
  4. Make the disclosure on every post. A blanket disclosure that you often receive free products from brands, somewhere on your profile, is not specific enough.

For a more detailed analysis of the FTC's concerns about and guidelines for social media influencers, check out our Trademark and Copyright Law blog here and here.

What happens when social media influencers don't comply with the FTC guidelines? In April 2017, the FTC sent warning letters to over 90 celebrities, influencers, and brands sponsoring them, advising them to make the disclosures described above on their sponsored posts. FTC followed up with over 20 of those influencers in September 2017, requesting responses that identify the brands with which the influencers have material connections and the steps they will take to ensure they clearly and conspicuously disclose those connections. FTC did not disclose the name of the celebrities and influencers who received the warning and follow-up letters. Nor has it taken any more significant actions against the offending influencers, to date, aside from imposing strict monitoring requirements on individuals who failed to disclose their ownership of an online gambling site in social posts promoting that site.

Kim May Be Starting to Comply – But ...

It does appear that Ms. Kardashian West may be moving her social media presence in the direction of FTC compliance. Kim's recent Instagram posts, such as a post featuring Kim in Calvin Klein underwear, bear the #ad hashtag right at the start of the post. But another of her recent posts, though also clearly marked with #ad, raises different problems and reminds us that the old advertising rules of claim substantiation apply equally to new-media advertising. On May 15, Kim posted an Instagram ad for Flat Tummy Co.'s "Appetite Suppressant Lollipops."  Her posts immediately prompted outrage with Instagram users arguing that she was promoting an unhealthy way to lose weight to her many young and impressionable followers.  Commenters have accused her of promoting eating disorders and inappropriately helping to market a product oriented to what is, or should be, an adult issue – weight management and body image – to her millions of teen and pre-teen fans and followers.

It is also worth asking if Kim's Flat Tummy post makes a product performance claim that requires substantiation.  The text of her post is:

#ad You guys... @flattummyco just dropped a new product.  They're Appetite Suppressant Lollipops and they're literally unreal.  They're giving the first 500 people on their website 15% OFF so if you want to get your hands on some... you need to do it quick!  #suckit

Let's set aside the fact that "literally unreal" is literally meaningless and therefore almost certainly non-actionable puffery.  Also, we'll just note in passing that attempting to follow or search the hashtag "#suckit" on Instagram returns no hits, no doubt for excellent reasons, no matter how many people use it.  More importantly, Kim's commenters are onto something:  the issues many of them are raising, relating to the marketing of what should be an adult product in a way that may be attractive to adolescents and children, occasionally spur the Federal Trade Commission to question the practice under its authority to challenge "unfair" commercial practices, even if they don't make any deceptive representations.

Then there are the claims made for the product.  Although Kim doesn't make a performance claim for the lollipops in the form of a declarative sentence, it's a settled rule that a product's name can also be a performance claim.  "Appetite Suppressant Lollipops" is a pretty straightforward express claim that would have to be substantiated.  Moreover, the maker's name, "Flat Tummy Co.," used in conjunction with Appetite Suppressant Lollipops or any of its other products, may very well add up to an implied weight loss claim for the product.  Has Flat Tummy substantiated these claims?  Well, they claim that the lollipops include "SATIEREAL," which "works to maximise [sic] satiety (which helps control food intake, cravings and weight)."  Satiereal is a saffron extract claimed by its suppliers to have proven appetite control and weight management benefits, but even taking that at face value, has it been studied in the dosage delivered by sucking Flat Tummy's recommended 1 to 2 lollipops per day?  We don't know.  But we hope someone on Kim's staff has had a look and is satisfied that there is a reasonable basis for the claims before letting Kim repeat them.

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.

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