In recent years, the FTC has ramped up efforts to deter deceptive marketing practices on social media and customer review websites by issuing guidelines that apply to marketers and influencers alike and instituting enforcement actions against the guidelines’ most blatant violators.  These actions have largely placed the onus on brands and companies to ensure that any material relationships with influencers and reviewers who endorse or recommend their products or services are clearly disclosed, even if that means monitoring influencers’ social media accounts and review websites to confirm that all necessary disclosures have, in fact, been made.

Just this month, the FTC approved final settlements in enforcement actions against a PR company and a publisher in relation to a media campaign which used the mosquito-borne Zika virus outbreak and the 2016 Summer Olympics in Brazil to promote a mosquito repellant product.  According to the complaint, the companies hired athletes to promote the mosquito repellant on Instagram and other social media platforms.  The athletes’ social media posts failed to disclose that they were paid for their endorsements, and the companies themselves reposted many of the endorsements, again without any disclosure.  The complaint also alleged that the companies reimbursed employees and “friends” for posting positive reviews on ecommerce websites like Walmart.com.  According to the FTC, these practices constitute unlawful unfair or deceptive acts or practices.

The case highlights the FTC’s continuing interest in deterring deceptive marketing practices on social media by aggressively pursuing brands and companies that fail to ensure compliance with FTC guidelines.  Companies engaged in social media marketing can protect themselves by reviewing the FTC’s Endorsement Guides, which provide guidance for marketers and influencers alike.  Some takeaway points include:

• Material connections must be disclosed.  Any “material connection” between an endorser and an advertiser must be disclosed unless it is already clear from the context of the communication.  A “material connection” is one that might affect the weight or credibility that consumers give the endorsement.  This could be a business or family relationship, a monetary payment, or the gift of a free product.
• Disclosures must appear clearly across all devices and platforms.  Disclosures must be clear and prominent regardless of the device or platform that a consumer uses to view the post.  Understanding how consumers interact with posts differently depending on these variables is important because what works in one context might not in another.  For example, consumers viewing Instagram posts on mobile devices typically see only the first three lines of a longer caption unless they click “more,” which many users do not do.  As a result, any material connections must be disclosed above the “more” button.
• Use plain, straightforward language.  The language used must also Disclosures are not effective unless they communicate the nature and existence of the material connection to reasonable consumers.  As such, disclosures should be in plain language that is as straightforward as possible.  Acceptable terms include “Ad,” “Advertisement,” “Paid Advertisement,” and “Sponsored Advertising Content.”  Commonly used terms that do not satisfy FTC guidelines include “#sp,” “Thanks [Brand],” and “#partner.”

Much like the sphere they are meant to regulate, the FTC’s rules for social media endorsements are still evolving.  Companies can protect themselves by keeping informed of changes to the Enforcement Guides and by regularly auditing their social media practices.

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