FTC Warns Celebrities Over Social Media Endorsements

Two weeks after presenting Keys to Celebrity & Paid Endorsements in Social Media at the ABA Business Law Section Spring Meeting, the Federal Trade Commission has sent out over 90 letters to celebrities, athletes, marketing firms and other influencers, warning them to clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media (see, FTC Staff Reminds Influencers and Brands to Clearly Disclose Relationship).   An advocacy group, Public Citizen, which petitioned the FTC to act, said Instagram had become “a Wild West of disguised advertising” and in connection with its own investigation last year, named celebrities including Kim Kardashian and Rihanna, among over 100 influencers who the group claimed made endorsements without proper disclosures.

The potential for misleading consumers was raised after a review of Instagram posts reviewed by the FTC, recognizing that if consumers knew that a celebrity was being paid, gained a benefit or was somehow associated with the product, service or brand, it may well affect their perception and the weight accorded any claims made through such endorsements.  As mentioned in the presentation to lawyers at the ABA meeting, the FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising applies to individual endorsers, as well as to bloggers, marketing companies and sponsoring advertisers.   The letters sent out by the FTC noted that if a post includes “more” to indicate there is additional content available, the disclosure must be before or above that reference and that some disclosures weren’t clear even when made conspicuously. For example, “#sp” referring to ‘sponsored’ or “Thanks (name of product/service/brand)” or similar oblique references, especially when placed in a string of other symbols, abbreviations, links, hashtags (#), emoticons and emojis are not likely to be conspicuous or easily understood by many consumers.

Although the FTC did not publicly disclose the names of the recipients of the letters or the actual letters themselves, this is the first time the FTC has directly targeted social media influencers themselves, highlighting the requirements set out in the Guides that any “material connection” (e.g., paid sponsorship, contractual obligation, gifts, ownership interest, etc.) must be clearly and conspicuously disclosed unless the context already makes the connection clear.

Understanding the nuances of national and international advertising, marketing, promotions and sponsorships can be daunting.  Implementing practical policies and practices to avoid problems before they arise, while meeting your marketing objectives, building brand recognition and strengthening your intellectual property assets is never simple or easy.   The FTC’s jurisdiction includes everything from multicultural marketing, promotional campaigns involving user-generated content, sweepstakes and contests, as well as the privacy and data mining implications of marketing and promotional activities.  Whether you are reviewing your current slate of endorsements, native advertising, product placement or branded entertainment, trying to enhance customer loyalty, affinity, co-branded marketing or reward programs, or if you are simply looking at new and innovative ways to use technology, including mobile and social media, to advertise, promote and market your brand, your products or your services – you need to understand the law and regulation that surround these activities.

As always, if you need or want to know more about the information or subject of these Legal Bytes, always feel free to contact me, Joe Rosenbaum, at Rimon Law!

 

Social Media: Celebrities & Paid Endorsements

On Thursday, April 6, 2017, I had the privilege of participating and presenting, together with a panel of distinguished lawyers, on the subject of the legal issues, implications, challenges and opportunities resulting from the use of celebrities in social media to provide endorsements for products and services.  My partner, John Isaza, who heads the Records and Information Governance practice at Rimon Law, chaired the session sponsored by the Cyberlaw Committee.  The program was held in New Orleans as part of the ABA Business Law Section Spring Meeting and the other presenters and panelists were Adam Nadelhaft, a senior litigation associate in the Washington office of Winston & Strawn LLP and Valerie Surgenor, a partner in the Glasgow, Scotland, law firm MacRoberts LLP.

In addition to my presentation on the use of celebrities in social media for endorsements, marketing and promotional purposes, Adam reviewed the law relating to paid endorsements and ‘buying buzz’ on social media, whilst Valerie focused on the similarities and differences in approach taken by UK and EU law.

You can view and download a personal copy of the presentation in PDF form right here “2017.04.06 Keys to Celebrity & Paid Endorsements in Social Media – Presentation at ABA Spring Meeting.

As always, if you have questions or want more information, feel free to contact me, Joe Rosenbaum, at Rimon Law.