FTC Sends Warning Letters to Influencers and Updates Guidance Document for Endorsements
Yesterday, the Federal Trade Commission (FTC) announced that it sent warning letters to 21 Social Media Influencers regarding their Instagram posts. In April, the FTC had, for the first time, sent letters to Marketers and Influencers to educate them about their use of Instagram to promote goods and services. According to the FTC, that was the first time that it had contacted Influencers directly to educate them about their use of social media. The FTC has now taken a further step by sending some of these same recipients warning letters in which they are specifically asked to respond in writing whether they have material connections with the brands that they are endorsing and what actions they will take to ensure that all of their posts to social media clearly and conspicuously disclose their relationships, if any, with those brands.
Social media personalities, bloggers, artists, and athletes (Influencers) frequently post photographs of themselves on Instagram using and enjoying recognizable products and services. Some of these "spontaneous" posts may actually be endorsements for which the Influencer received something of value from the Marketer.
In this week's warning letters, the FTC reminds the Influencers that "material connections could consist of a business or family relationship, your receipt of payment, free products or services or other incentives to promote the brand."
Even merely "tagging" a brand is an endorsement of the brand according to the FTC staff. If there is a material connection between the brand and the Influencer, this connection must be disclosed. The letter makes clear that a post that simply states "thank you" is not adequate to disclose that this is a paid endorsement, nor is a mention that appears so late in a post that it is unlikely to be seen by consumers viewing Instagram streams on a mobile device.
In addition to announcing that warning letters have been sent to Influencers, the FTC also announced that it has updated its guidance document, The FTC Endorsement Guides: What People are Asking. The updated document includes additional topics such as making disclosures in Snapchat and Instagram, "tags" in pictures and disclosure tools built into some platforms.
Finally, the FTC settled its first law enforcement action against individual online Influencers who failed to disclose that they were owners of the product that they were endorsing and failed to require that their network of paid endorsers disclose to consumers that they were paid for their endorsements of the online games.
If you have any questions about how this latest action by the FTC may impact your company's use of Influencers as well as making proper disclosures and having appropriate language in your company's social media policy, please contact your Baker McKenzie attorney or any of the contacts below.