FTC Clarifies Influencer Law with New Sponsorship Disclosure Guide

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On November 5, 2019, the Federal Trade Commission released a new guide, “Disclosures 101 for Social Media Influencers” (the “Guide”), in an attempt to curtail the scourge of deceptive ads published by social media influencers. In the past, we have blogged about how advertisers and influencers have come under investigation for failing to adequately disclose their professional relationships. To avoid future investigation from the FTC and state attorneys general, advertisers and influencers should consult the Guide and otherwise comply with developing principles of “influencer law.”

What tips does the Guide provide for advertisers and influencers?

Complying with Influencer Law

The Guide explains that whenever there exists any manner of financial, employment, personal or family relationship between a brand and one of its influencers, a conspicuous disclosure needs to be included in any influencer post/video/photo in simple and clear language. Disclosures are required even where the compensation that the influencer receives in connection with his/her promotion is not monetary. In fact, the FTC requires that disclosures be included when promoting products that were received for free or at a discounted price, even if there is no agreement between the brand and the influencer to mention the subject products. It is important to note that the FTC considers tags, likes, pins, and other alternative ways of supporting a brand as endorsements.

According to the FTC, disclosures should be included in all endorsement messages, and influencers should be as transparent as possible about their brand affiliations when promoting on social media. To accomplish this, influencers should use simple explanations, such as “thanks to Acme brand for the free product,” or terms such as “advertisement,” “ad” and “sponsored.” Influencers should not use abbreviations, such as “sp,” “spon” or “collab,” or stand-alone terms such as “thanks” or “ambassador.” In addition, influencers should reference the Guide when making endorsements across different mediums, including photography, video and live streaming. It is important to also point out that when engaging in social media advertising, businesses (and their influencers) should, in addition to the Guide, closely follow the FTC’s Product Endorsement and Testimonial Guidelines.

Avoiding Investigation

Beyond requiring certain disclosures, influencer law prohibits influencers from making deceptive statements about products that they have not tried, lying about their experiences with products, or making up claims “that would provide proof the advertiser doesn’t have – such as scientific proof that a product can treat a health condition.”

Historically, the FTC has focused more on investigating advertisers and publishers for deceptive advertising. Given that the new Guide is specifically directed at influencers suggests that the FTC will be including influencers in future investigations for deceptive conduct. Recently, the FTC settled an investigation involving Devumi , LLC (“Devumi”) for selling fake indicators of social media influence to boost the number of followers, subscribers, views, and likes of their influencer customers. Devumi customers have since been directed by the FTC to remove their Devumi-related social media followers, connections, likes and views.

Given the foregoing, businesses and their social media influencers should work closely with knowledgeable counsel before commencing any online advertising campaign.

If you are interested in learning more about this topic, or if you have been served with legal process related to deceptive advertising, please email us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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