The FTC Punishes Influencers Who Fail to Disclose Their Sponsorships

Influencer

The FTC has new requirements for celebrity endorsements on social media. Amazon also revealed its new social media “influencer” program.

The FTC Has Its Eyes on Social Media Celebrities

The Federal Trade Commission recently sent letters to 90 celebrity social media influencers, reminding them that they are subject to the same truth-in-advertising rules as any other marketing platform. Celebrities and social media influencers who fail to disclose their sponsored product endorsements are in violation of consumer protection laws. The FTC has ruled that anyone with a “material connection” to a given product must “clearly and conspicuously disclose relationships to brands” when promoting it.

This is the first time that the FTC has directly contacted celebrity endorsers. While no official investigations have been made, huge fines await any influencer who continues to ignore the FTC’s guidelines. When asked why it chose to focus on this issue, a spokesperson from the Commission explained:

“Instagram has become a Wild West of disguised advertising, targeting young people and especially young women. That’s not going to change unless the FTC makes clear that it aims to enforce the core principles of fair advertising law.”

Disclosures Must Be Clear and Conspicuous

Attempting to bury disclosures in fine print or webpage elements is just as bad as failing to disclose in the first place. The FTC requires that all sponsorship declarations be made where they can be clearly seen by visitors on any device, including mobile devices. This means that disclosures cannot be relegated to a sidebar, expansion element, “more” button, etc.

Amazon’s Influencer Program

In the latest episode of Amazon’s conquest of the American marketplace, the company has been concentrating on the fashion industry. Unsurprisingly, its plan of attack included enlisting social media influencers to market and promote its products.

According to Amazon, the program is still in an invitation only testing phase, and participants can’t yet decide which products they get to promote.

When deciding which influencers to invite to participate, Amazon has reportedly considered follower count, average engagement, quality of content, and level of relevancy to Amazon’s platform. Amazon was also sure to include influencers “across all tiers and categories.”

Legal Concerns in Social Media Marketing

Here are some helpful tips for promoting products online legally:

  1. Burying disclosures after a long string of hashtags is considered deceptive marketing.
  2. Simple hashtags such as #sp (for sponsored), #partner, or #Thanks [Brand] are not clear enough to consumers to meet FTC truth-in-advertising standards.

Click here for a more in-depth list of social media marketing dos-and-don’ts.

Contact an E-Commerce Business Consultant

If you’re an Amazon influencer or social media promoter who needs answers for your online marketing questions, get in touch. Our team has helped many online businesses and entrepreneurs with everything from affiliate marketing contracts to FTC investigations. Our rates are exceptional and our expertise is invaluable.

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