New updates with FTC disclosures

The FTC recently came out with a new guidance piece directed specifically at social media influencers. The brochure, “Disclosures 101 for Social Media Influencers,” is housed on a new “influencers” page on the FTC site that also features three videos highlighting information from the brochure.  

Section 5 of the Federal Trade Commission Act prohibits, among other things, unfair and deceptive acts or practices in advertising. In the past few years, the FTC has made considerable efforts to emphasize that this prohibition extends to advertising in any medium, including social media. In 2017 the FTC published “The FTC’s Endorsement Guides: What People are Asking,” in an attempt to explain how their revised endorsement and testimonial guides apply to endorsements on social media. 

What’s New in the Disclosures 101 for Social Media Influencers Brochure?

For the most part, the brochure simply reiterates the FTC’s previous guidance.

What’s new is that this piece is directed specifically at Influencers, re-emphasizing that they, in addition to the brands that they promote, are responsible for meeting FTC disclosure requirements. The brochure also offers more clear, concise direction as to when and how to disclose. 

The When

In the “When” section, the FTC stresses that if an influencer has a “material connection” with a brand, they are responsible for disclosing that connection anytime they endorse the brand or one of its products. A material connection definitely exists if an influencer receives payment or free products from a brand, but it doesn’t stop there. According to the FTC, a material connection includes any personal, family, employment or financial relationship.

What Constitutes an Endorsement?

The brochure makes clear that endorsements are not limited to product mentions. Anything an influencer does that suggests it favors a brand or product qualifies as an endorsement, triggering the obligation to disclose. This includes likes, tags, pins and anything similar.  

The How

As for how to disclose, the FTC gives some clear practical guidance: influencers need to make their disclosures simple, clear and hard to miss. Using simple, direct hashtags like #ad is okay, assuming they can be easily seen. Posts that thank a brand for free product are also acceptable. However, the FTC cautions influencers to avoid using confusing hashtags with abbreviations that viewers won’t readily understand. Influencers should also avoid jumbling their disclosures in with lists of links or hashtags or placing them later in text such that viewers have to click “more” in order to see them. 

The brochure also calls out specific endorsement formats and advises influencers on how to handle them. For example, endorsements in the form of pictures or stories should have the disclosure superimposed on the image. Videos with endorsements should have the disclosure in the actual video not just the video description. Live-streamers should make their disclosures several times throughout a stream so that viewers who see only a portion of the stream won’t miss them.

Some Remaining Areas of Confusion

Uncertainty still exists, however, as the brochure doesn’t offer guidance for every situation. For example, it’s unclear if an influencer with a past connection to a brand or campaign would still be required to make a disclosure for mentioning that brand or product after the campaign is over. And, if they are, it’s hard to say what would suffice because the examples given (#ad, #sponsored, #ambassador etc.) don’t really apply. It’s also unclear as to how an influencer making an endorsement by liking a product would be expected to make their disclosure.

Consequences?

Probably the most important area of uncertainty, however, is what the real penalties will be for influencers who fail to make the proper disclosures. In the past couple of years, the FTC has taken an educational approach to disclosures, sending educational letters, (and in some cases following up with warning letters) to several influencers instead of bringing enforcement actions. In cases where the FTC has brought actions, most of these complaints, even particularly egregious ones, have settled without hefty fines. With the release of this latest brochure, it appears that the FTC is sticking with an educational approach to disclosures for now, but for how long?