Earlier this year, we examined how changes to the FTC's Endorsement Guidelines could affect influence campaigns and suggested that companies may want to monitor the FTC's actions in this area to see what types of conduct catch the FTC's attention. We got some initial clues yesterday when the FTC announced it had sent warning letters to two trade associations (the American Beverage Association and the Canadian Sugar Institute) and 12 health influencers for their posts.
The letters begin with a reminder that influencers must “clearly and visibly” reveal any “material connection” they have to a brand (unless that connection is clear in the context) and then summarize the FTC's view of what constitutes a “clear and visible disclosure.” Against that background, FTC staff continue to raise specific concerns about the posts. Here are some of the highlights of what caught their attention:
- Some of the posts did not include any disclosure or other indication that the influencer was connected to the association.
- Some posts included a disclosure in the description, but not in the video. The letters state that because viewers can watch the videos without reading the descriptions, “there should be clear and eye-catching revelations in the videos themselves, for example by overlaying much larger text over the videos.” Audible endorsements require audible disclosures and visual endorsements require visual disclosures.
- Some of the revelations in the descriptions were not clear or eye-catching enough as they were truncated on TikTok and Instagram, so viewers would not see them unless they clicked on the text. The staff also wrote that “Don’t think the disclosure in the text description of a TikTok or Instagram Reels post is clear and eye-catching.”
- Some influencers trusted him “paid partnership disclosure tool offered by platforms when making their disclosures. The staff reiterated the above “concerns about the notoriety of such integrated outreach tools alone” and I think it is “"It's too easy for viewers" to lose them. Those tools are not a substitute for the other disclosures the FTC wants to see in publications.
- Even if viewers read the “The paid partnership,” “#sponsored,” and “#ad” disclosures FTC staff thought might be inappropriate in the context of the posts, because some of the influencers did not identify the sponsor of the posts. Viewers should know who is sponsoring posts, not just that a post was sponsored.
Letters ““We strongly encourage” associations and influencers to review their posts to ensure they meet FTC requirements and ask recipients to respond within 15 business days. The letters also included the FTC Notice of Penalty for Offenses Related to Deceptive or Unfair Conduct Regarding Endorsements and Testimonials with a warning that recipients: including influencers - are “under notice that engaging in the conduct described therein could subject you to civil penalties of up to $50,120 per violation.”
As we noted in our original post, making disclosures in the way the FTC describes in the revised Endorsement Guidelines (and now in these warning letters) may be a departure from common industry practice, which typically involves an influential person Make a single disclosure in the first few lines of a post. Companies and influencers who were waiting for FTC action before changing their practices may want to factor these warning letters into their decisions.
