The Federal Trade Commission recently released “Disclosures 101 for Social Media Influencers.” The guidance is accompanied by informational videos and emphasizes the agency’s commitment to enforcing compliance with the Endorsement Guides.
The publication is specifically directed at social media and online influencers. It should be of interest to brands, agencies used by brands, influencers and FTC defense attorneys. Additionally, this article should be of interest to those that would like to bolster compliance programs to minimize liability exposure and prevent FTC investigations and enforcement actions.
When to Disclose
According the Federal Trade Commission, disclose when you have any “material connection” with a brand, such as a financial, employment, personal, or family relationship. Financial relationships are not just limited to money. Disclose the relationship if you received anything of value to mention a product.
If a brand gives you free or discounted products or other perks and then you mention one of its products, make a disclosure even if you were not asked to mention that product.
Also, never just assume your followers already know about your brand relationships.
Make disclosures even if you think your evaluations are unbiased. Keep in mind that tags, likes, pins, and similar ways of showing you like a brand or product are endorsements.
If posting from abroad, U.S. law applies if it is reasonably foreseeable that the post will affect U.S. consumers. And, foreign laws could also be applicable.
The FTC also reminds influencers that if there is no brand relationship and are just telling people about a product you bought and happen to like, you may not have to state that there exists no such relationship.
What is a Material Connection?
In context, a “material connection” is any relationship that materially affects the weight or credibility that a consumer would give an endorsement if such fact was known by the consumer. For example, if a brand gives the influencer free product or anything of value in exchange for a positive post, legal regulations require this fact to be “clearly and conspicuously” disclosed by the influencer – and perhaps the brand, as well.
How to Disclose
First, become familiar with the FTC’s “Dot Com Disclosure Guidance.”
Consumers need to see and understand the disclosure. Disclosures should be unavoidable and in close proximity to claims, including the endorsements themselves
The FTC reminds influencers and brands that disclosures are likely to be missed if they appear, for example, only at the end of posts or videos, or anywhere that requires a person to click MORE.
Never mix disclosures into groups of hashtags or links. Along with the FTC, experienced FTC defense attorneys recommend that if your endorsement is in a picture on a platform like Snapchat and Instagram Stories, superimpose the disclosure over the picture and make sure viewers have enough time to notice and read it.
Dot Com Disclosure guidance also covers video disclosures. When making an endorsement in a video, the disclosure should be in the video and not just in the description uploaded with the video. The FTC believes that viewers are more likely to notice disclosures made in both audio and video. Some consumers may watch without sound and others may not notice superimposed words.
The FTC also recommends that when making an endorsement in a live stream, the disclosure should be repeated periodically so viewers who only see part of the stream will be certain to see the disclosure.
In terms of the substance of disclosures, the FTC recommends using simple, clear and easy to understand language. And, again, such disclosures should be difficult to miss. Terms like “advertisement,” “ad” and “sponsored” may be sufficient.
Do not use ambiguous or confusing terms like “sp,” “spon” or “collab.”
Platforms with limited real estate are no defense for inadequate disclosures. Also, never assume that a platform’s disclosure tool is good enough. Consider using it in addition to your own compliant disclosure.
Other Things to Know
Never talk about your experience with a product if you have not tried it. Also, if you are paid to talk about a product and thought it was terrible, you cannot say it was great.
Never fabricate claims about a product that would require proof the advertiser does not possess. For example, scientific proof that a product can treat or prevent a health condition.
How Hinch Newman Can Assist
Experienced FTC defense attorneys represent digital marketers to minimize liability exposure. Hinch Newman utilizes comprehensive knowledge of FTC regulations to design and implement strategic compliance plans for companies and individuals engaged in social media brand campaigns. Contact the author at rnewman@hinchnewman.com if you would like to learn more about FTC advertising requirements.
Takeaway: It is critical to know what marketing activities trigger applicable consumer protection laws. Generally speaking, if you work with a brand to recommend or endorse its products to consumers, it is highly likely that federal and state law governs your activities. Brands, agencies and influencers are all potentially liable for the failure to comply with applicable legal and regulatory obligations. Seek the advice of an experienced FTC defense attorney.
Richard B. Newman is an FTC defense attorney at Hinch Newman LLP. Follow him on Twitter @ FTC Defense Lawyer.
Informational purposes only. Not legal advice. May be considered attorney advertising.
