For the first time, the Federal Trade Commission (the “FTC” or “Commission”) has contacted, and questioned the product endorsement practices of, dozens of social media influencers – individuals who are powerful, popular and relevant enough to influence others within their online social sphere. Influencers provide product endorsements through social media platforms, such as Facebook, YouTube, Instagram, Twitter, Snapchat, Pinterest and Twitch, often in exchange for free products and/or compensation.
How can social media influencers properly post product endorsements?
Regulation of Product Endorsements
Dating back to the 1980s, the FTC has prohibited certain endorsement activity that could be construed as dishonest or misleading. In recent years, through revisions to the Commission’s Endorsement Guides and related guidance, the FTC has made clear that its regulations extend to online endorsements made via social media platforms.
Under the Endorsement Guides, Instagram and other social media influencers are generally required to disclose their advertising relationships, including when the influencers receive free products and/or compensation in exchange for endorsements, testimonials or reviews. Further, a number of social media platforms require influencers to make additional, platform-specific disclosures. Please note that product endorsement disclosure language should be carefully tailored to the applicable product, platform and compensation structure in question.
FTC Targets Social Media Influencers
On April 19, 2017, the FTC announced that it delivered more than 90 “educational letters” to various social media influencers and affiliated marketers. The subject correspondence references specific Instagram posts made by social media influencers and encourages the contacted influencers and marketers to familiarize themselves with the FTC Endorsement Guides.
In addition, the Commission has called on consumers to seek out and report social media influencers who are believed to be receiving free products or payments in exchange for endorsements without making proper disclosures.
Are Your Product Endorsements Compliant?
As the FTC’s recent campaign demonstrates, the Commission is now actively seeking out non-compliant social media influencers – and enforcement actions against unwary influencers appear imminent. In light of recent crackdowns, social media influencers can expect more and more advertiser written agreements to hold influencers responsible for product endorsement disclosure mishaps.
To date, however, most regulatory action concerning social media endorsements (including the 2016 enforcement action against Lord & Taylor) has targeted marketers, their ad agencies and public relations firms. Such advertisers should ensure that their marketing practices – as well as the endorsement practices of their social media influencers – comply with applicable laws, rules and regulations. Considering these regulatory and contractual risks, influencers and marketers alike should always consult with a knowledgeable attorney before engaging in endorsement activity.