Last week, two advocacy groups filed a complaint with the Federal Trade Commission (“FTC”) taking direct aim at the burgeoning influencer marketing industry. The complaint implores the agency to take enforcement action against various high profile content and media companies, including Google and Disney, alleging unfair and deceptive practices in connection with influencer advertisements targeting children.
On what basis is the FTC being asked to curtail influencer marketing?
The complaint argues that digital influencer marketing directed at children is deceptive because children are less able to differentiate between content and advertising, and thus making such marketing misleading. Basing its call to action on the conclusion that children are especially susceptible to influencer techniques because they are predisposed to trust recommendations from kid-friendly celebrities or characters that they recognize, the complaint asks the FTC to set new rules of the road for influencer marketing. Typically, in order to protect consumers from deceptive influencer-related advertisements, regulatory authorities require that certain disclosures be made regarding paid endorsements. The advocacy groups maintain that this would be insufficient to protect children, however, and that the practice should be prohibited entirely with respect to advertising to minors. In addition, the groups argue that children cannot understand the basic idea that such disclosures are intended to communicate, specifically that the influencer is only promoting the product because s/he has been paid to do so. As a result, according to the advocacy groups, the practice of influencer marketing directed towards children is inherently deceptive and cannot be brought into compliance with existing law.
It is unclear how the FTC will respond to the advocacy groups’ complaint. Either way, the industry will be sure to follow how this matter develops.
Protect Yourself from Influencer Marketing-Related Liability
The influencer marketing sector is a topic on which we have extensively blogged. As influencer marketing becomes more prevalent, it is not surprising to see the space come under FTC scrutiny. Accordingly, in this regulatory climate, influencers, YouTubers and advertisers alike should always consult with a knowledgeable attorney before engaging in endorsement activity.