The Federal Trade Commission (FTC) appears to be using its ongoing review of current rules and guides to revisit its approach to driving home the message that the relationship between a social media “influencer” and the brand he or she is endorsing must be disclosed. As we have described previously, the FTC has interpreted its Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Endorsement Guides”) to require that online advertisements — like all other advertising — clearly and conspicuously disclose material connections between endorsers (i.e., influencers) and the brands they promote because such connections may affect the credibility of the endorsement. And, in recent years, the FTC has — through enforcement actions, press releases, guidance, closing letters, and letters sent directly to endorsers (including prominent public figures) — made clear its belief that: (1) appropriate disclosures by influencers are essential to protecting consumers; and (2) in too many instances, such disclosures are absent from celebrity or other influencer endorsements.

Now, in connection with a request for comments on the Endorsement Guides, FTC Commissioner Rohit Chopra has issued a scathing statement calling on the FTC to “take bold steps to safeguard our digital economy from lies, distortions, and disinformation.” In this regard, Commissioner Chopra suggests that the FTC’s efforts to date have not been effective in “deterring misconduct in the marketplace” relating to inauthentic and fake reviews, and that, in particular, elements of the Endorsement Guides should be codified as formal rules so that violators can be liable for civil penalties and damages under the FTC Act.

Also of note is that Commissioner Chopra has asserted that the FTC should refocus its efforts on advertisers themselves, and not the influencers that promote their brands.  According to the Commissioner, “when companies launder advertising by paying someone for a seemingly authentic endorsement or review, this is illegal payola,” and “companies paying for undisclosed influencer endorsements and reviews are not [being] held fully accountable for this illegal activity.” Seeking to aggressively penalize advertisers themselves would be a shift in emphasis for the FTC, as its recent efforts to combat inadequate disclosures in influencer advertising have focused on influencers. For example, the FTC recently produced a brochure detailing the responsibility of influencers “to make [required] disclosures, to be familiar with the Endorsement Guides, and to comply with laws against deceptive ads.” The FTC also brought an enforcement action against influencers, and foreshadowed that more enforcement will happen in the future.


Continue Reading Fake News & Paid Reviews: FTC Seeks Comments on its Endorsement Guides

In the last few years, as advertising has followed consumers from legacy media such as television to online video and social media platforms, the Federal Trade Commission has been attempting to ensure that participants in this new advertising ecosystem understand the importance of complying with the FTC’s “Guides Concerning the Use of Endorsements and Testimonials in Advertising,” or the endorsement guides. The endorsement guides require advertisers and endorsers (also referred to as influencers) to, among other things, clearly and conspicuously disclose when the advertiser has provided an endorser with any type of compensation in exchange for an endorsement.

A failure to make appropriate disclosures may be a violation of Section 5 of the Federal Trade Commission Act, which prohibits unfair or deceptive acts or practices. In recent enforcement actions, press releases, guidance, closing letters and letters sent directly to endorsers (including prominent public figures), the FTC has made clear its belief that: (1) appropriate disclosures by influencers are essential to protecting consumers; and (2) in too many instances, such disclosures are absent from celebrity or other influencer endorsements.
Continue Reading The FTC’s Quest for Better Influencer Disclosures

As Socially Aware readers know, social media is transforming the way companies interact with consumers. Learn how to make the most of these online opportunities while minimizing your company’s legal risks at Practising Law Institute’s (PLI) 2018 Social Media conference, to be held in San Francisco on Thursday, February 1st, and in New

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