In June 2017 we posted a story about the Federal Trade Commission sending letters to 90 celebrities and brands for failing to properly disclose material connections with the brands or products promoted on social media. At the time, the celebrities and the companies received warning letters reminding them of their obligations to include #sponsored or #ad for promotional messaging. On September 6, 2017, the FTC sent a new round of letters to 21 celebrities, and this time, the celebrities need to respond to the FTC’s inquiry by September 30.
Unlike traditional advertising where consumers understand the relationship between celebrities and the companies whose products they describe, social media posts are different and may be perceived by the public as personal messages from the influencers and not paid product endorsements.
Under the FTC’s Endorsement Guides, the duty to disclose any “material connection” is the responsibility of the marketer, its ad agency (if any) and the influencer – who may be a celebrity, athlete, brand ambassador or other influencer. And it’s important to keep in mind that both the marketer and its ad agency are potentially liable for the conduct of their influencers.
What’s New in the Sequel?
According to news reports, the consumer advocacy group Public Citizen filed a complaint with the FTC resulting in the initial and current set of letters. Celebrities targeted include Amber Rose, Naomi Campbell, Ciara, Vanessa Hudgens, Vanessa Lachey, Lindsay Lohan, and Sofia Vergara. The current letters require the celebrities to inform the FTC as to whether any “material connections” exist between the celebrity and the products they promoted on Instagram. Only this time, it’s not just an “educational” warning, a response by the celebrity is required.
Will It Be a Trilogy?
Traditionally, the FTC has taken a hands-off approach when it comes to enforcing its Endorsement Guides with the celebrities themselves. The FTC’s previous focus was on the advertiser and the agency, but this may be changing by requiring the celebrities to respond to the FTC’s current query. The question is whether the FTC becomes more aggressive in future influencer cases and holds the individuals (along with the advertiser and the agency) responsible for their lack of proper disclosures. Even in Hollywood, that’s one list nobody wants to be on.
To learn more about the FTC’s Endorsement Guides, click here for the FAQs.