In September of 2020, the United Kingdom’s (“UK”) Committee of Advertising Practice (“CAP”) reviewed the Instagram accounts of 122 UK-based social media influencers to determine whether content was being properly flagged as advertising in accordance with applicable social media influencer laws. This past March, the UK Advertising Standards Authority (“ASA”) released its report on the subject social media influencers’ content. ASA found that many of the social media influencers were violating UK advertising rules by failing to adequately disclose advertising content. The report serves as a good reminder to U.S. social media influencers that they must comport with social media influencer laws or face the consequences.
How do I comply with social media influencer laws?
FTC Guidelines
The Federal Trade Commission (“FTC”) oversees influencer marketing in the United States through regulations that are meant to curtail deceptive advertising and protect consumers. In 2019, the FTC released “Disclosures 101 for Social Media Influencers” (the “Guide”) to instruct businesses and influencers alike on the proper way to go about endorsing products/services via social media. Influencers that endorse products on social media must be clear and conspicuous about the relationship (“material connection”) that they have with each brand. A “material connection” to a business “includes a personal, family, or employment relationship or a financial relationship – such as the branding paying [influencers] or giving [influencers] free or discounted products.” Some important Guide requirements include that endorsement disclosures should: 1) be placed in an obvious location throughout the given post, video or photo; 2) use simple and clear language; 3) not be buried in a string of hashtags unrelated to the disclosure; and 4) use terms like “advertisement,” “ad” and “sponsored,” but not vague or confusing terms such as “thanks” or “collab.” However, if influencers are expressing how much they certain products, but no relationship exists between the brands and influencers, influencers do not have to disclose that no relationship exists.
Social Influencer Law Enforcement
Historically, the FTC has taken enforcement action against businesses that have commissioned influencer endorsements, while influencers have avoided regulatory attention. Recently, the trend has changed to include regulatory scrutiny directed toward the social media influencers themselves. As such, it is recommended that influencers also take the time to educate themselves on applicable social media influencer law requirements.
The FTC’s Guides Concerning Use of Endorsements and Testimonials in Advertising is currently under review. In a statement from Commissioner Rohit Chopra, one concern of the FTC is that “misinformation is plaguing the digital economy, and recent no-money, no fault FTC settlements with well-known retailers and brands to address fake reviews and undisclosed endorsements may be doing little to deter deception.” It is possible that after review of the endorsement guidelines, stricter penalties will be put in place for both social media influencers and the brands that hire them. Therefore, from a business protection perspective, it is important that companies enter into influencer marketing agreements with each of their respective social media influencers.
We will continue to monitor any changes to FTC endorsement and advertising guidelines and update our readers accordingly.
If you are commencing a social media influencer advertising campaign, or if you are the subject of an FTC investigation, 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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Photo by Diggity Marketing.
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