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FTC (Federal Trade Commission) Issues First Comments on Pinterest Promotion Disclosures

Social media continues to attract millions of users—and with them, companies have quickly followed. Brands try to leverage social networks like Facebook, Twitter, Vine, Instagram and Pinterest to promote their brands through promotions like sweepstakes and contests. The regulatory and legislative guidance governing these promotions has been hazy at best.

Recently, however, the Federal Trade Commission (FTC) shed a little light on the context of a sweepstakes run on Pinterest. Like most social media services, Pinterest has “brand guidelines” that govern commercial use of its platform, but they are more focused on avoiding an over-commercialized or “spammy” use of the Pinterest platform. Until this month there has been no guidance directly from the FTC regarding how its “.com disclosures” guidelines apply to sweepstakes promotions.

Now the FTC has issued an official position on a Pinterest promotion. The FTC was concerned that a Cole Haan contest in which users were asked to pin images of Cole Haan products with a hashtag, #WanderingSole, in exchange for a chance to win a $1,000 shopping spree may have violated Section 5 of the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices.” Section 5 requires disclosure of any material connection between an endorser and the advertised product where consumers might reasonably not expect that connection. For example, in a 30-second television advertisement, consumers reasonably expect that the celebrity featured is probably being paid by the brand, but if a blogger recommends a product, consumers might not know whether that blogger had been paid or otherwise incentivized to endorse it, and it therefore must be disclosed.

The FTC held that the Cole Haan contest pins were endorsements of the products, and that the #WanderingSole hashtag failed to adequately communicate the fact that the contest entrants were incentivized to endorse them by the shopping spree sweepstakes. The FTC decided not to pursue enforcement action because it had never before addressed the question of whether entry into a contest is a material connection between the advertiser and endorser that triggers a disclosure obligation, nor had it addressed whether a pin on Pinterest constitutes an endorsement.

Now that both of these open questions have been addressed, companies will need to be cautious in structuring their promotions on Pinterest and other social media sites. Specifically, any pins, tweets, or other social media posts that are required as a condition of entry in a sweepstakes should, under the official rules, be required to be clearly designated as contest entries. Advertisers should also be particularly cautious about properly disclosing endorsements on Pinterest, as it is clearly an area of interest for the FTC.

© 2022 Neal, Gerber & Eisenberg LLP.National Law Review, Volume IV, Number 97

About this Author

Michael G. Kelber, Intellectual Property & Technology Transactions attorney, Neal Gerber law firm

Michael G. Kelber represents and counsels individuals and corporations in all aspects of intellectual property law and related transactions and litigation. He has represented clients in copyright, trademark and patent litigation, including seeking and defending temporary restraining orders, preliminary injunctions and summary judgment motions. He has prepared and prosecuted thousands of U.S. and foreign patent and trademark applications. Michael has also drafted and negotiated patent, trademark and software development licenses, and information technology outsourcing and development...

Katherine Dennis Nye, Intellectual Property & Technology Transactions attorney, Neal Gerber law firm

Kate Dennis Nye focuses her practice on assisting clients with their branding and marketing needs. Kate counsels clients on trademark clearance, and assists them with filing new trademark applications and maintaining their trademark portfolios worldwide. She also manages intellectual property policing and enforcement matters for numerous clients at all stages of such disputes, and her litigation experience includes both federal court and Trademark Trial and Appeal Board proceedings.

Additionally, Kate regularly works with clients to review and vet marketing and promotional material...