Recognizing the growing role of social media and influencers in marketing today, the Federal Trade Commission announced on April 19 that it sent more than 90 letters to social media influencers and marketing executives reminding them to disclose relationships between brands and endorsers when promoting products on social media. Although the FTC has taken action against brands and marketers for endorsement-related violations before, the letters mark the first time the FTC has directly contacted influencers.
The letters follow on the FTC's Final Guides on Endorsement and an updated FAQ document titled "The FTC Endorsement Guides: What People are Asking." Under the Guides, an endorsement is defined as "any advertising message . . . that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser." Simply posting a picture of a product on social media without any text can constitute an endorsement if it conveys that the poster likes and approves of the product.
The Guides make clear that an endorsement "must reflect the honest opinions, findings, beliefs, or experience of the endorser," and if the advertisement represents that the endorser uses the endorsed product, the endorser must have actually used the product. Additionally, if there is a "material connection" between an endorser and an advertiser (a connection that might affect the weight or credibility that consumers give the endorsement), the connection must be "clearly and conspicuously" disclosed. Examples of a material connection can include a business or family relationship, monetary payment or providing the endorser with free products. If such a connection is not disclosed, or if false or unsubstantiated claims are made in an endorsement, liability may attach to both the advertiser and the endorser.
The FTC's recent wave of letters reminds both influencers and marketers of the need to "clearly and conspicuously" disclose any material connection between the endorser and advertiser, unless it is already clear from the context of the communication. The letters explain how Instagram posts can meet the "clear and conspicuous" standard for disclosures, instructing influencers to make this disclosure above the "more" button on Instagram. The FTC demonstrated its familiarity with Instagram, explaining that many consumers "viewing posts in their Instagram streams on mobile devices typically see only the first three lines of a longer post unless they click 'more.'" The FTC recognized that consumers on Instagram sometimes may not click "more" or may skip over multiple tags, hashtags or links at the end of a long post. Also, simply saying "#sp," "Thanks [Brand]," or "#partner" does not constitute a sufficiently clear disclosure, according to the FTC.
The letters emphasize the FTC's position that brands and influencers are responsible for ensuring that adequate disclosures regarding endorsements are made. In the letters to marketers, the FTC advised that they inform endorsers of their disclosure responsibilities and monitor endorsements to ensure that appropriate disclosures are made. The FTC also encouraged marketers to implement a social media policy to address disclosure of material connections by endorsers, or if marketers have an existing social media policy, to evaluate how this policy applies to posts by endorsers.
The FTC did not publicly identify the influencers and marketers to whom it sent the letters, but did say that the list of recipients was developed from petitions filed by Public Citizen and affiliated organizations, as well as the FTC's own browsing of Instagram.
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.