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]
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After Four Decades, FTC Announces Regulatory Review of The Endorsement Guides: What Does This Portend for Digital Advertisers and Social Media Platforms?
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?
California’s Fair Pay to Play Act: This is Only The First Quarter
We previously wrote about California Senate Bill 206, the “Fair Pay to Play Act,” back in April, and now Gov. Gavin Newsom has signed that bill into law.[1] The law becomes effective on January 1, 2023. After numerous revisions to the bill since our last post, here is a quick look at the final product.
The new Fair Pay to Play Act allows California student-athletes to earn compensation from licensing their name and image and to obtain professional representation by lawyers and agents to assist with that effort, all without losing scholarship eligibility or amateur status under the National Collegiate Athletics Association’s (NCAA) Division I and II eligibility criteria. Importantly, the law specifically prohibits colleges, athletic associations and intercollegiate conferences from paying such compensation to prospective student-athletes.
Continue Reading California’s Fair Pay to Play Act: This is Only The First Quarter
Using Hashtag #Disclosures in Social Media Advertising
The Federal Trade Commission (“FTC”) has been cracking down on brands for paying Instagram users to endorse their products or to share brand content without disclosing the relationship. Indeed, the recent settlements entered between the FTC and several media and entertainment companies as well as a specialty retailer make it clear that the FTC is paying close attention to endorsements of all kinds – whether by celebrities, sponsors, or paid “influencers.”
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