The FTC takes a huge jab at Influencers

In a landmark bout of activity, the Federal Trade Commission (“FTC”) has announced that it is, in fact, watching celebrities, athletes, and other influencers on Instagram. According to a statement from the government agency, after reviewing Instagram posts by celebrities and influencers, its staff has sent out more than 90 letters reminding influencers and marketers that they must clearly and conspicuously disclose their relationships when promoting or endorsing products through social media.

According to the FTC, “The letters were informed by petitions filed by Public Citizen and affiliated organizations regarding influencer advertising on Instagram, and Instagram posts reviewed by FTC staff. They mark the first time that FTC staff has reached out directly to educate social media influencers themselves.”

The FTC’s Endorsement Guides state that if there is a “material connection” between an endorser and an advertiser (aka: a connection that might affect the weight or credibility that consumers give the endorsement) that connection must be “clearly and conspicuously” disclosed, unless it is already clear from the context of the communication. A material connection could be a business or family relationship, monetary payment, or the gift of a free product. The FTC also states, “Importantly, the Endorsement Guides apply to both marketers and endorsers.”

Influencers, Brands Put on Notice
The staff’s letters were sent in response to a sample of Instagram posts making endorsements or referencing brands. The FTC is not publicly releasing the letters or the names of the recipients of such letters at this time. However, we do know that undisclosed posts by: the Kardashian/Jenners, A$AP Rocky, David and Victoria Beckham; actresses Anne Hathaway, Blake Lively, Ashley Benz, Shay Mitchell, and Lucy Hale; models Bella and Gigi Hadid, Irina Shayk, Emily Ratajkowski, Naomi Campbell, Chrissy Teigen, and Heidi Klum; Scott Disick, Pharrell, Steph Curry, Zlatan Ibrahimovic, Drake, One Direction members Louis Tomlinson and Niall Horan; and Jennifer Lopez, among others, were specifically cited in Public Citizen’s formal complaint to the FTC.

The letters each addressed the fact that consumers viewing Instagram posts on mobile devices typically see only the first three lines of a longer post unless they click “more.” The staff’s letters informed recipients that when making endorsements on Instagram, they should disclose any material connection above the “more” button.

The FTC’s letters also noted that when multiple tags, hashtags, or links are used, readers may just skip over them, especially when they appear at the end of a long post – meaning that a disclosure placed in such a string is not likely to be deemed a valid, conspicuous disclosed.

Still yet, some of the letters addressed particular disclosures that are not sufficiently clear, pointing out that many consumers will not understand a disclosure – such as “#sp,” “Thanks [Brand],” or “#partner” – in an Instagram post to mean that the post is sponsored. In a blog post, the FTC recently held that disclosures, such as “Ad,” “Promotion,” or “Sponsored,” or with a hashtag like “#Ad,” are acceptable forms of disclosure.

According to a statement provided to TFL from Public Citizen president Robert Weissman: “Today, the FTC has validated our concerns, sending 90 letters to influencers and also to the brands that employ them, informing them that their practices are in violation of FTC guidelines. This move is welcome, but insufficient.”

He continued on to note: “Instagram has become a Wild West of disguised advertising, targeting young people and especially young women. That’s not going to change unless the FTC makes clear that it aims to enforce the core principles of fair advertising law.”

Now What?
While the FTC’s recent action does not come with any official enforcement action, the warning may be followed by a formal investigation and action that may include both permanent injunctive relief (which would bar the advertiser and influencer from engaging in such activity in the future) and disgorgement of any profits in connection with undisclosed sponsorships.

Public Citizen’s campaign coordinator, Kristen Strader, stated: The FTC’s decision to send reminder letters to influencers in violation of FTC rules is only a first step. Until the FTC takes enforcement actions against repeat offenders, the culture around influencer marketing will not change and consumers will continue to be misled.”

Here at TFL have documented the extensive FTC regulation violations within the fashion industry in the past, including by the most heavily-followed influencers (see our list of the most flagrant abusers, here), as well as the industry’s top editors.

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