Endorsements

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Brands and influencers could unknowingly be violating the FTC’s endorsement rules by using TikTok to promote paid posts and sponsored content without including the necessary disclosures. TikTok offers native direct download and social sharing tools that enable users to share TikTok videos on other social media platforms without the caption and hashtags from the original video description, which may include disclosures that were included as required by the FTC to identify paid advertising.
Continue Reading Native TikTok Tools May Create Liability for Brands and Influencers

In April 2018, the Federal Trade Commission (“FTC”) wrote to Florida-based Teami LLC (“Teami”), a Florida-based producer of Teami tea and skincare products, reminding it of the requirement set forth in the FTC’s Endorsement Guides, that any material connections, including compensation, between advertisers and internet end-users need to be disclosed “clearly and conspicuously” to consumers.  The letter noted that endorsers should use unambiguous language and consumers should be able to notice the disclosure easily without having to look for it; and that because consumers viewing posts in their Instagram feeds typically see only the first few lines of a larger post unless they click “more,” endorsers should decide any material connection above the name look.[1]
Continue Reading FTC Cracks Down On Deceptive Social Media Campaign By Teami LLC

On February 12, 2020, the Federal Trade Commission (“FTC”) announced that it had voted 5‑0 to approve a proposed Federal Register Notice, seeking comment on whether to make changes to its Guides Concerning the Use of Endorsements and Testimonials in Advertising (“the Endorsement Guides”), which were enacted in 1980 and amended in 2009, as part of a systematic review of all current FTC rules and practices.  The FTC’s Endorsement Guides have evolved over the past forty years from regulating celebrity endorsements and testimonial advertisements to policing social media advertising, including influencer endorsements and native advertising.  The Endorsement Guides have steadfastly required transparency in advertising and that, if there is a connection between an endorser and the maker of a product being advertised or promoted which, if disclosed, might affect the weight or credibility of the endorsement, such connection must be disclosed clearly and conspicuously.  In the proposed notice, the FTC requested comment on a variety of questions, including the following:
Continue Reading After Four Decades, FTC Announces Regulatory Review of The Endorsement Guides: What Does This Portend for Digital Advertisers and Social Media Platforms?

On November 5, 2019, the United States Federal Trade Commission (“FTC”) issued a guide entitled “Disclosures 101 for Social Media Influencers”[1] and a video “Do you endorse things on social media?” to alert influencers to the laws governing endorsement or recommendation of products or services and provide social media influencers with “tips on when and how to make good disclosures.”[2] The FTC’s written guide states that “[a]s an influencer, it’s your responsibility to make these disclosures, to be familiar with the Endorsement Guides, and to comply with laws against deceptive ads.”[3] The guide explains to influencers that disclosures must be made when an influencer has a “material connection,” that is “any financial, employment, personal, a family relationship with a brand” and that receiving “free or discounted products or other perks” requires a disclosure.[4] In addition, the FTC notes that “tags, likes, pins, and similar ways of showing you like a brand or product are endorsements.”[5] The FTC guide also instructs influencers that “[i]f posting from abroad, U.S. law applies if it’s reasonably foreseeable that the post will affect U.S. consumers. Foreign laws might also apply.”[6] The FTC notes that disclosures must be in simple and clear language that is placed “so it’s hard to miss” and should be placed with the endorsement itself. Disclosures that “appear only on an ABOUT ME or profile page, at the end of posts or videos, or anywhere that requires a person to click MORE” will not be sufficient.[7] The FTC gave the following guidance with regard to endorsement posts in photographs, video and live streaming:
Continue Reading FTC’S New “Disclosures 101” Publication And Video Is A Shout Out To Influencers

In our previous blog post, “#CAUTION: FTC Ramps Up Enforcement of and Education on Social Media Influencer Disclosure Requirements,” we discussed a recent Federal Trade Commission (the “FTC”) settlement and the FTC’s increased focus on misleading advertising and endorsements on social media platforms.

The complaint, brought by the FTC’s Bureau of Consumer Protection (“BCP”), was against two online gaming influencers, Trevor Martin (a/k/a TmarTn), Thomas Cassell (a/k/a TheSyndicateProject, Tom Syndicate, and Syndicate), and their corporation CSGOLotto, Inc. (“CSGOLotto”).  The BCP alleged that Martin and Cassell (1) did not disclose their ownership in CSGOLotto, (2) were paid to endorse the online platform’s gambling service and (3) asked other gaming influencers to promote the service in exchange for payments between $2,500 and $55,000 without making them disclose such payments. In response to the complaint, neither Martin, Cassell, nor CSGOLotto admitted or denied the allegations, but instead agreed to enter into an Agreement Containing Consent Order with the FTC (the “Order”). The Order prevents them from misrepresenting an endorser of the product or service as an independent user or ordinary consumer of same and requires them to clearly and conspicuously state if the endorsers have a material connection to the product or service.
Continue Reading Paid to Post? #FTCAdvice for Influencers

In 2017, being a “social media influencer” can mean big bucks. Companies are increasingly eager to pay individuals with large social media followings substantial sums to promote products in the hopes of reaching millions of potential customers quickly. And consequently, the Federal Trade Commission (the “FTC”) is paying attention more than ever. If you’re being paid to promote a product on your Instagram account, the FTC wants you to let the world know. . . or else.
Continue Reading #CAUTION: FTC Ramps Up Enforcement of and Education on Social Media Influencer Disclosure Requirements

In response to a petition from a coalition of consumer groups last year complaining about the need for disclosures by social media influencers, the FTC recently announced on April 19, 2017 that it had issued more than ninety letters reminding influencers and brands that “if there is a ‘material connection’ between an endorser and the marketer of a product – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement.” The FTC explained that material connections could “consist of a business or family relationship, monetary payment, or the provision of free products from the endorser.” A copy of the form of the letter, which explains that clear and conspicuous disclosures are required can be found here.
Continue Reading Brands Beware!!!! FTC Scrutinizing Influencer Posts for Compliance with Endorsement Guides

Last month, Sofia Vergara, star of ABC’s Modern Family, reached a settlement in a lawsuit brought by the actress against beauty company Venus Concept for alleged improper use of her likeness on television and in social media, which Vergara alleged created the false impression that she endorsed the Venus Concept brand or its treatment products. In the lawsuit, Vergara claimed $15 million in damages.
Continue Reading #ShowMeTheMoney: Sofia Vergara’s Settlement of Social Media False Endorsement Lawsuit Highlights Modern Legal Issue

Web businesses have fueled the natural cynicism that consumers have when reading online reviews. There are too many reported instances of businesses or PR firms using employees or paid reviewers to post glowing reviews, and, in addition, mark as unhelpful negative reviews of their respective businesses.
Continue Reading ‘Astroturfing’ With Fake Reviews Exposes A Company to Legal Risk