Earlier this month, the Federal Trade Commission (FTC) and the U.S. Food and Drug Administration (FDA) issued warning letters to four companies using social media influencers to post on their behalf. According to the FTC and the FDA, the social media influencers’ posts were in violation of advertising and labeling laws due to misbranding and failure to disclose material information. The letters highlight the importance of companies following all advertising laws when using social media influencers.
The Federal Food, Drug, and Cosmetic Act (FD&C Act) prohibits the misbranding of a product through false or misleading labeling. The FTC Act prohibits unfair or deceptive acts or practices in or affecting commerce. Thus, social media advertisements that mislead, are unfair, or fail to disclose material health or safety risks violate these acts. What should companies relying on social media influencers do? Educate influencers on disclosure obligations and monitor all advertisements. Companies are responsible for ensuring all advertising, including advertisements promoted through social media, is in compliance with all legal obligations.
The FTC also provided additional guidance to companies relying on social media influencers. According to the FTC’s Guides Concerning Use of Endorsements and Testimonials in Advertising, 16 C.F.R. § 255.5 (2018) (Endorsement Guides), social media influencers must state if there is a “material connection” between an endorser and the marketer of a product. Connections that might affect the weight or credibility that consumers give the endorsement should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement. As the FTC explained:
If your company has a material connection to someone endorsing your products, that relationship should be clearly and conspicuously disclosed in the endorsements, unless the relationship is otherwise apparent. To be both “clear” and “conspicuous,” the disclosure should use unambiguous language and stand out. Consumers should be able to notice the disclosure easily, and not have to look for it. For example, consumers viewing posts in their Instagram streams on mobile devices typically see only the first two lines of a longer post unless they click “more,” and many consumers may not click “more.” Therefore, an endorser should disclose any material connection above the “more” button. In addition, where there are multiple tags, hashtags, or links, readers may just skip over them, especially where they appear at the end of a long post.
If your company has a written social media policy that addresses the disclosure of material connections by endorsers, you may want to evaluate how it applies to the posts identified in this letter and to posts by other endorsers of your products. If your company does not have such a policy, you may want to consider implementing one that provides appropriate guidance to your endorsers. You may also want to review your company’s social media marketing to ensure that posts contain necessary disclosures and they are clear and conspicuous.
“These letters are a reminder that companies who use social media influencers to promote their products must comply with all applicable advertising requirements,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection.
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