How do I keep my influencer (and my company) out of trouble with the FTC?

With the rise of streamers on Twitch and mega celebrities endorsing games, many video game companies are considering hiring influencers. An influencer, defined as a person who has a significant following related to a certain topic, can be a great source of publicity and exposure for a video game. For example, Apex Legends received a lot of attention when the game was first released because popular Twitch (now Mixer) streamer Ninja was playing it

Video game companies may want to contract an influencer and give them money or a copy of their game in exchange for promoting the game on the influencer’s social media accounts. This can grow a game’s userbase more quickly as the network effect ensues. 

However, there are consumer laws instituted by the Federal Trade Commission regulating these types of promotions and endorsements. If a company is not careful with their influencers, fines upwards of $11,000 can be issued to both the influencer and the company that hired them. Look no further than 2016 to see the consequences of video game companies using influencers and getting in trouble with the law for insufficient disclosures: Popular YouTuber PewDiePie got in trouble with the FTC for his video covering the Middle Earth: Shadow of Mordor game without disclosing that Warner Bros. had paid him to promote it on his channel. This can be easily avoided by making sure that an influencer is following the disclosure rules, which may be set forth in a contract ahead of time. 

Here are some tips to stay safe from these fines while simultaneously keeping a good relationship with influencers:

  1. Instruct the influencer to mark every post with “#Ad” or “#Sponsored” in a way that stands out. The disclosure should be before the “more…” pops up on social media posts and YouTube videos so that it is seen on first impression—a person should not have to click “read more” in order to see the disclosure. This can apply to Instagram posts, Facebook posts, Tweets, and other text-based platforms.
  2. If using a platform that is not text-based, such as Twitch, Youtube, Instagram Stories or Snapchat, the disclosure must be adapted to the platform. If it is a video, instruct the influencer to create text on the video or audibly mention “THIS IS AN AD” that makes the disclosure clear. This is extremely important for streaming platforms such as Twitch that can last hours on end: disclosures must be made periodically throughout the stream. This can mean every 30 minutes—the goal is for anyone who begins to view the stream at any moment to be alerted to the disclosure.
  3. Advise the influencer to use plain English when making the disclosure. A legalese disclaimer in all caps at the bottom of the video, or the post, will very likely not qualify as a sufficient disclosure. 
  4. If possible, incorporate these terms into the contract with the influencer. By laying out what is expected of the influencer ahead of time, many of these issues can be avoided. 

Ultimately, the FTC’s goal is for consumers to know when social media posts are sponsored endorsements. The gist of disclosures is that they must be “clear, conspicuous, and unambiguous.” This should be the mantra for all video game companies looking to use influencers for their products. 

For more information, please refer to the FTC Code of Federal Regulations, the FTC .com Disclosures Guide, and the FTC’s FAQ section.

Veda Cruz

Veda Cruz is a recent JD/MBA grad from Miami. Follow her on Twitter, check out her retro video game collection on Instagram, or connect with her on LinkedIn.

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