Legal Perspective on Influencer Sponsorship and Testimonials

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Legal Perspective on Influencer Sponsorship and Testimonials- KMT
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The Federal Trade Commission released an influencer sponsorship guide in 2019, “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 influencer sponsorship?

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.

I’m John Doe, and I Endorse this Product

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.

Transparency is the Best Policy

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 Guide is specifically directed at influencers suggests that the FTC will be including influencers in future investigations for deceptive conduct. For example, 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.

Avoiding Investigation into Influencer Sponsorship

Businesses that fail to ensure that their promotions are compliant with FTC regulations, as well as the many rules governing the use of social media websites, will be exposed to the risk of regulatory investigation and other legal action.  Therefore, it is recommended that both businesses and influencers retain qualified legal counsel to assist during the planning stages of any marketing promotion, contest or sweepstakes launch.

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.

Attorney Advertising

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