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Deeper Dive Into FTC Crack-Down on Social Media Influencers: What You Should Know Before You Post

In our previous blog post, “Brands Beware!!! FTC Scrutinizing Influencer Posts for Compliance with Endorsement Guides,” we reported that the Federal Trade Commission (“FTC”) had issued more than 90 letters to brands and influencers, making it clear that it is paying close attention to influencer-based marketing.  More recently, the letters have been made publicly available, providing valuable insight into the types of disclosures that the FTC considers unacceptable or inadequate.

Several FTC letters were sent to influencers that could potentially be seen as having a personal relationship with a brand’s owner, such as Victoria Beckham with Dr. Harold Lancer of Lancer Skincare or Lucy Hale with Chiara Ferragni of Chiara Ferragni Collection. The agency reminded these celebrities that disclosure is required even in the absence of a business connection or if product is simply received free of charge.

Another group of letters addressed the inadequacy of disclosures consisting of influencers expressing gratitude to the brands. The FTC expressed concern that these types of disclosures fail to sufficiently explain the nature of the endorser’s relationship to the company. For example, Emily Ratajkowski’s “thanks @nipandfab” or Troian Bellisario’s “Thank you @understatedleather” were not considered appropriate disclosures.

Some influencers, known to the FTC for having existing business relationships with the brands, were singled out for lack of appropriate disclosures. For example, Ashley Benson was put on notice for her use of a hard to understand #sp hashtag in her endorsement post; Scott Disick, affiliated with Pearly Whites Australia, also was admonished for using an otherwise acceptable #ad hashtag, but placing at the end of his post; and Caroline Manzo, a paid spokesperson for HelloFresh, received a warning letter for using the #sp hashtag despite including a statement encouraging consumers to try her code ‘FreshCaroline.’

The FTC also indicated that using #[brandname]ambassador may be inappropriate, at least in certain contexts. Shay Mitchell, a brand ambassador for Biore, was cited for not validly disclosing her relationship with the brand even though she included “BioreAmbassador” in her post. The FTC did not provide an explanation as to why “BioreAmbassador” was insufficient, or whether it may be sufficient in other contexts (i.e., if she had included it more prominently, rather than at the end of the post, following emojis and a potentially confusing #TBT hashtag).

In other letters, the FTC made it clear that, while the #partner hashtag by itself is likely an insufficient disclosure, it may nonetheless be appropriate to use #[brand name]_partner. However, the agency also indicated that an abbreviated version of the brand name in that context may be insufficient due to consumers potentially not understanding the meaning of the abbreviation.

The FTC emphasized the importance of disclosing relationships, including in situations where the brands or products are owned by influencers and are “non-eponymous” (meaning that the brands are not named after the celebrities or influencers) because the public may not be aware of the relationship. For example, Sean Combs’ endorsement of AQUAhydrate water was flagged by the FTC as lacking disclosure, despite the fact that Mr. Combs is an owner and director of AQUAhydrate.

Takeaways:

  • All material connections should be disclosed, including:
    • Non-business relationships and friendships;
    • Free products;
    • Products owned by endorsers.
  • Disclosures should be clear and conspicuous, meaning:
    • Placed above the “more” button in an Instagram post;
    • Not hidden in a string of other hashtags and/or links.
  • Avoid vague and/or confusing disclosure hashtags:
    • Use #ad, #sponsored or #[brand name]_partner and place it at the top of the post;
    • Do NOT use, #sp, #thankyou, #SponCon, #partner, #collab;
    • Do NOT abbreviate brand name.
Copyright © 2019, Sheppard Mullin Richter & Hampton LLP.

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About this Author

Ilona Wheat, Sheppard Mullin Law Firm, Intellectual Property Attorney
Attorney

Ilona Wheat is an attorney in the Intellectual Property Practice Group in the firm's San Diego (Del Mar) office.

858-720-8937
Partner

Ms. Martens' practice focuses on the protection and enforcement of brands for clients ranging from start-ups and emerging companies to Fortune 500 corporations. She has particular expertise in the food service, healthcare, e-commerce, semiconductor, sporting goods and retail clothing industries.

Ms. Martens counsels clients on a variety of trademark issues, including the development of U.S. and foreign trademark portfolios, global brand strategy, and licensing. She has also successfully handled numerous domain name disputes in the U.S. and worldwide. In addition, Ms. Martens regularly provides advice on advertising substantiation and rights of publicity and has successfully litigated false advertising and right of publicity cases in federal court.

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