FTC and new guidelines for influencers
FTC guidelines to protect the proper use of advertising
Advertising is the new “yellow gold”: it represents one of the most profitable assets not only of BigTech giants, but also one of the most profitable investment channels. The total dependence on social media and everything that revolves around it, has contributed to fuel a series of phenomena, typical of the last decade: brands that, even famous ones, entrust their advertising to social sharing platforms; personalities, so fast to fame, that they have become millionaires; purchases made via smartphone or tablet, which are consumed at the same speed with which you get. In this “pantagruelic chaos”, a minimum of regulation has become not only useful but more necessary than ever.
Precisely because of the continuing expansion of these phenomena, the American Federal Trade Commission (“FTC”), in November 2019, once again clarified some guidelines, publishing a memorandum for influencers and trademarks to comply with the laws on misleading advertising, clearly revealing their relationships.
Social “Endorsement”
“Endorsement”, as they call it, in Italian we could translate it into “endorsement”, “recommendation”, “support”, “public demonstration of support, approval and/or use of a product or brand by a testimonial or endorser”. In this short FTC guide, this definition includes the presentation of a product, comment, tag, endorsement, or review, referring to any “material connection” of any kind, professional, business, or family, which may be followed by the acceptance of free sample products.
Such a connection must be made clear, in plain language, but not otherwise ignored. The FTC does more, making a list of things to do (DO) and not to do (DO NOT), in order to respect the canons issued. The document reads: “Telling your followers, this kind of relationship is important, because it helps to keep your recommendations honest and truthful, and allows people to weigh the value of your advice.
And it adds: “If a brand offers you free or discounted products or other benefits and you should mention one of its products, it should always be declared, even if you were not asked to do so”, and even if you were judged impartial. “Don’t assume that followers already know about your relationship with the brand.”
Do & Do not list
DO:
- Simple explanations such as “Thanks to the brand X, free product” are often sufficient if placed in an explicit and evident way;
- as much evidence should be given to terms such as “advertising”, “ad”, and “sponsored”;
- on photographic or video platforms, such as Snapchat or Instagram Stories, superimpose disclosure on the image, but in such a way that viewers have enough time to see and read it;
- in a video, the disclosure should be in the video itself and not just in the description, as viewers are more likely to notice disclosures in both audio and video, so as to bypass distracted views or without activated audio;
- in a live stream, repeat the endorsement several times, so as to make it explicit and clear;
- on platforms with a limited number of characters, such as Twitter, simply enter words such as “Xpartner” or “ambassadorX”;
- possible, but not necessary to insert hashtags such as #ad or #sponsored
DO NOT:
- do not place information in a place where it can be easily ignored, for example in the who we are section of the testimonial profile;
- do not place the disclosure in a group of hashtags or links;
- do not use vague or confusing terms such as “sp,” “spon,” or “collab”, or terms in isolation such as “thank you” or “ambassador,” but avoid abbreviations and shorthand;
- do not entrust disclosure only to the tools of the platform used, but highlight the business relationship with additional statements;
- do not use a language other than the one used for sponsorship.
In addition, the guidelines add some additional warnings: influencers, for example, cannot praise a product they actually find terrible, tell about experiences with a product they have not actually tried, or make unsubstantiated statements about a product that would require proof that the testimonial does not have.
Conclusions
Compliance with these guidelines is becoming mandatory, as the FTC recently filed a complaint against Urthbox, a snack bar company, for incorporating on its website positive customer reviews on TrustPilot.com, obtained in exchange for free products, charging it $100,000 for the company’s conduct in violation of the FTC Regulation.
The Federal Trade Commission also sued a Sephora affiliate for publishing reviews of the company’s products on Sephora’s website using fake accounts, making them appear as impartial reviewers. Strangely enough, no fines were imposed in this case.
These control actions show that companies that advertise online, must pay particular attention in the creation of social marketing policies, to avoid incurring measures and penalties, to deal with misleading advertising and misuse of advertising techniques.
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Raffaella Aghemo, Lawyer
