Locke Lord QuickStudy: FTC Issues Guide for Social Media Influencers

This month, the Federal Trade Commission issued a plain English guide ‎“Disclosures 101 for Social Media Influencers”‎ (the “2019 Guide”). The 2019 Guide is a clear and unambiguous warning to social media influencers that they, themselves, must be aware of the law and are responsible for their own words and actions. The focus of the 2019 Guide is to insure that influencers make adequate disclosure of material relationships that they have with the manufacturer, distributor, brands, products and services they endorse, and that the disclosures are clear and readily visible to the reader or viewer.

The 2019 Guide includes links to shareable videos that explain what the Commission is concerned about when well-known individuals and others (“influencers”) endorse (orally or visually) or voice opinions concerning brands, products, services and companies. The 2019 Guide and the videos provide a clear explanation and examples concerning how influencers can comply with the Commission’s original Guides Concerning the Use of Endorsements and Testimonials in Advertising¹which were the subject of our Quick Study in 2010,² and the September 2017 “What People are Asking” frequently asked questions ("FAQs") that the Commission staff issued to help the public work with the original Guides.³ 

With social media advertising becoming more and more important in the marketing plans of many companies, this new plain English guide for social influencers lets the influencers know where the lines between appropriate behavior (proper disclosure) and improper behavior (inadequate disclosure - risk of prosecution) may be found. For this purpose, “influencers” are not limited to those specifically identified as social media influencers, but also include “brand ambassadors”, endorsers and others using their social media credibility and notoriety for the benefit of a company, brand, product or service.

The key requirement that is the focus the Commission’s attention is the need for the influencer to tell her or his followers the true relationship between the influencer and the brand, product, service or company (be it a manufacturer, service provider, licensor, distributor or retailer).  The disclosure must be made in a clear, easily found and easily understood way. It is important for the influencer to disclose any “material connection” that the influencer has with the product, service, brand or company. In the words of the Commission, “A “material connection” to the brand includes a personal, family, or employment relationship or a financial relationship – such as the brand paying you or giving you free or discounted products or services.”⁴

The Commission’s position is that “As 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. Don’t rely on others to do it for you.”⁵ The Commission's 2019 Guide provides guidance on when, where and how to make the proper disclosures, and makes clear that the disclosures made by the influencer must be truthful and easily found.

The 2019 Guide provides examples of what is good disclosure and what is not adequate in the eyes of the Commission staff.  Stating that the influencer received the product or other products or services free, that the influencer was paid, that the endorsement is “sponsored” or if the statements are an advertisement, etc., is important. The use of abbreviations such as “sp”, “spon” or “collab”, or the use of “ambassador” alone are not sufficient.  The 2019 Guide clearly suggests that the influencer not rely solely on a social media platform’s suggestions for disclosure terms or abbreviations, but that the influencer follow the 2019 Guide, the original Guide and the FAQs with more clear indications of the relationship, payment or other compensation (e.g., free products, or other promotional consideration) that the influencer received or will receive. 

In recent years, a number of companies and influencers have been the subject of Commission action for deceptive advertising practices. Numerous warning letters have been issued by the Commission staff to influencers and to the companies manufacturing or distributing the products or services that were endorsed. The 2019 Guide provides guidance to help influencers and the companies that use them comply with federal law and builds upon the original Guides and September 2017 FAQs, both of which continue in effect.

The 2019 Guide does not relieve the companies for whom the influencers work of the companies’ responsibilities under the law for what the influencers may do or say.

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_{1 16 CFR Part 25. https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-publishes-final-guides-governing-endorsements-testimonials/091005revisedendorsementguides.pdf
2 https://www.lockelord.com/newsandevents/publications/2010/02/broad-new-ftc-guidelines-for-‎endorsements-‎and-testimonials-create-risks-for-manufacturers-advertisers-bloggers-and-others
3 https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-endorsement-guides-what-people-are-asking
4 https://www.ftc.gov/tips-advice/business-center/guidance/disclosures-101-social-media-influencers
5 https://www.ftc.gov/tips-advice/business-center/guidance/disclosures-101-social-media-influencers}