The Federal Trade Commission (FTC) released a new publication titled "Disclosures 101 for Social Media Influencers" on Nov. 5, 2019. The publication, which was accompanied by an informational video, underscores the responsibilities of influencers relating to advertising and marketing communications.
The publication is directed at social media and online influencers and provides a helpful overview of the FTC's rules governing disclosures by influencers. It also serves as a reminder for brands and brand management companies that they should be mindful of the rules applicable to endorsements generally and that violations of those rules may result in liability for the brands and brand management companies.
The Holland & Knight alert provides a number of key takeaways from the publication, which includes best practice tips that can help influencers understand their responsibilities and help companies enhance their regulatory compliance programs to minimize their risks associated with social media advertising and marketing. It also serves as a timely follow-up to our recent alert highlighting an interview that Holland & Knight attorneys Anthony DiResta and Da'Morus Cohen conducted with Michael Ostheimer from the FTC's Division of Advertising Practices. (See Holland & Knight's previous alert, "Social Media Regulation: Advertising, Marketing and the FTC," Nov. 4, 2019.)
Do You Work with Brands to Recommend or Endorse Products?
It is important for influencers to understand what activities trigger the obligations imposed by federal and state consumer protection laws. A general rule of thumb: If you are disseminating promotional communications, you must comply with applicable consumer protection laws. Put another way, if you work with a brand to recommend or endorse its products to consumers, federal and state law impose certain obligations on you as an influencer or endorser. It is the influencer's responsibility to understand their obligations and seek advice of counsel relating to their promotional activities. An influencer's reliance on advice from the brand or brand management company is not a defense.
When to Disclose
Appropriate and compliant disclosures are the subject of the FTC's recent publication. As noted by the FTC, influencers are required to make all necessary disclosures to ensure that their promotional communications are accurate, truthful and non-deceptive. This obligation is no different than that of the brands with which the influencer is working.
Of particular importance is the disclosure of any "material connection" between the influencer and the brand. A "material connection" means any relationship that materially affects the weight or credibility that a consumer would give an endorsement if such fact was known by the consumer. Influencers are required to disclose any financial, employment, personal or family relationship with a brand. For instance, if a brand gives the influencer free product or anything of value in exchange for a positive post, the law requires that this fact be disclosed by the influencer (and the brand if it is disseminating the influencer's endorsement to consumers as well). Failure to disclose is a violation of various federal and state consumer protection laws.
How to Disclose
Given the uniqueness of various social media platforms, there may arise the question of "how to disclose." While each social media platform is functionally different, the goal remains the same: Disclosures should be conspicuous, simple and clear. Consumers should have no issue understanding the disclosure. Disclosures should also accompany the related endorsement and be placed so they are hard to miss and unavoidable. Disclosures should be in the same language as the endorsement itself. Reliance solely on the social media platform's disclosure tool is neither sufficient nor a defense to a violation of consumer protection laws. In addition to seeking advice of counsel, influencers (as well as brands) are encouraged to review the FTC's publication, as it includes practical examples for various social media platforms. While compliant disclosures vary based on the social media platform as well as the facts and circumstances of the promotional communications, practical examples provided by the FTC include:
What Else to Know
In addition to understanding their disclosure obligations, it is also important for influencers to understand other key issues relating to advertising and marketing compliance:
Simply put, any communication or action that is meant to influence a consumer is likely subject to FTC law and regulation as well as other federal and state consumer protection laws.
Holland & Knight's Consumer Protection Defense and Compliance Team includes a robust social media practice, with experienced attorneys that are recognized thought leaders in the field. From representing dozens of companies and individuals in federal and state investigations concerning advertising and marketing to compliance counseling and transactional contract matters involving celebrities, the firm's practice includes regulatory, compliance, litigation, investigation and transactional work in the social media space.
For more information or questions about the specific impact that social media advertising and marketing regulations can have on you or your company, contact the authors.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.
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