New Federal Guidelines For Social Media Influencers: Must Disclose Paid Endorsements
FORT WORTH (CBSDFW.COM) - The Federal Trade Commission issued new guidelines this week on how social media influencers should disclose paid partnerships.
It's no secret celebrities and other public figures get paid to endorse brands or products.
But with the explosion of platforms such as Instagram and SnapChat, the line between advertisement and honest review can get blurry.
Under a federal law, influencers must disclose when they make paid endorsements. The statute aims to help consumers avoid misleading advertisements, while keeping influencers honest about the products they recommend.
"If a brand pays you or gives you free stuff or discounts, tell people the relationship when you promote anything on the brand," said Amber Lee, an attorney with the Federal Trade Commission.
Brand ambassadors should include simple, clear language highlighting the paid partnerships in their posts. The law extends to Instagram stories, live streams and videos.
In 2017, the FTC sent warning notices to 21 influencers over disclosing brand relationships. The social media giants received a copy of the following letter:
Individuals who violate the FTC Act could face corrective action, which compels them to clarify any misinformation from previous posts.
Depending on the violation, social media stars could also face cease and desist orders and civil penalties.
"The potential consequences... could include the cost of defending against an investigation and lawsuit, an injunction that could subject the influencer to civil penalties if violated, payment of redress to consumers who purchased based on the influencer's post, and disgorgement of the money the influencer was paid for the post," said James Mayfield, a FTC spokesperson.
The government has pursued five cases related to influencers, taking action against Machinima, Lord & Taylor, Warner Bros., CSGO Lotto and Creaxion.