The Federal Trade Commission (FTC) has been cracking down on social media influencers and dietitian creators related to endorsements and disclosures.
It began last November, when the FTC sent warning letters to a dozen social media influencers – as well as the trade groups that paid the influencers – urging creators and sponsors to review social media posts for “sufficiently clear and conspicuous disclosures of any material connections.”
The letters went on to warn influencers and content creators that violations of the FTC Act can result in federal injunctions and civil penalties of up to $50,120 per violation.
In years prior, using a platform’s disclosure tools and/or use of “#ad” or “#sponsoredcontent” was considered sufficient disclosure to consumers; however, FTC standards have recently changed, placing more onus on the creator to ensure full and proper disclosure and compliance with federal regulations.
Why Were Registered Dietitians Targeted?
“Consumers are likely to give greater weight to the opinions of health professionals,” wrote the FTC in a November 2023 blog post, “which compounds the potential for injury when material connections aren’t properly disclosed.”
That said, the FTC is not only targeting Registered Dietitian Nutritionists (RDNs) or the dietetic and nutrition industry. The FTC has sent similar warning letters to celebrities, athletes, and other influencers over the same issue: failure to disclose a material connection.
How and Where To Disclose A Material Connection
In its letter to influencers and the trade associations, the FTC wrote, “if there is a ‘material connection’ between an endorser and the marketer of a product – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement.”
As defined in FTC’s Endorsement Guides (updated in June 2023), “clear and conspicuous” means that a disclosure is difficult to miss (i.e., easily noticeable) and easily understandable by ordinary consumers.
The FTC advises that, under this new definition, the disclosure must be unavoidable by the consumer. For example:
- If a claim is made in video format, the required disclosure must be present on the video itself, and if the content is audio, there must be an audio disclosure.
- If the post contains both an audio and video element, the disclosure must be made both audibly and on the video itself.
- A written disclosure should stand out from any accompanying text or other visual elements so that it is easily noticed, read, and understood.
More tips for compliant disclosures:
- Always include the name of the brand or company that is the sponsor of the post; tagging a brand alone is not sufficient.
- You can use a built-in disclosure tool, but do not rely on it as the only form of disclosure.
- Do not mix your disclosure into a group of hashtags or links; add the disclosure at the beginning of a post or caption.
- A single disclosure in your bio, profile, or home page that products are provided free or that you have a partnership is not enough.
- Superimpose a written disclosure (such as ‘#ad’ or “Sponsored by [BRAND]”) over photos or videos in visual platforms.
It’s important to note that there is no bright-line rule or answer for what meets FTC’s definition of a “clear and conspicuous” disclosure. Digest the rules and make the assessment in light of the format and platform of your paid endorsement. Your goal should be to make the disclosure difficult to miss and easily understandable by ordinary consumers.
What Counts As A Material Connection?
You should disclose your partnership or collaboration with a brand or business if you are (or have):
- Paid to promote a product or nutrition message in social media – from blogs or podcasts to TikTok videos or Instagram posts;
- Paid to include a brand or ingredient in a recipe or meal plan;
- Received free product samples;
- Participated in a sponsored event or tour;
- Provided with compensation via contests or affiliate links;
- A Family relationship; or
- Any financial relationship to a company, including investments.
The overarching principle is that if social media users would evaluate your review or endorsement differently knowing that it was motivated in part by a gift or incentive from the brand or advertiser, there should be a disclosure.
Both Advertisers and Influencers Have An Obligation To Disclose Material Connections
Companies, brands, and industry associations also bear responsibility for partnerships with influencers who are not disclosing their relationships.
Advertisers should make a reasonable effort to instruct social media partners on clearly and conspicuously disclosing material connections, especially if deceptive practices could cause consumers harm. Advertisers also have a responsibility to monitor their influencer partners for compliance.
How Does the FTC Monitor Social Media Influencers for Improper Disclosures?
The FTC does not actively monitor social media for endorsement violations.
According to their FAQs, “if concerns about possible violations of the FTC Act come to our attention, we evaluate them case by case. If law enforcement becomes necessary, our focus usually will be on advertisers or their ad agencies and public relations firms. However, action against an individual endorser might be appropriate in certain circumstances – for example, if the endorser hasn’t made required disclosures despite warnings.”
Confused About FTC-Compliant Social Media Endorsements?
Don’t let FTC enforcement actions discourage you from exploring paid sponsorship and endorsement opportunities. Instead, enter into these relationships with confidence with the counsel of a lawyer well-versed in social media legal and regulatory matters.
Our social media law team has served as counsel to a number of online influencers and brand ambassadors, including trade and professional associations seeking guidance for their members and events. We can review your campaigns for compliance and counsel you on other legal matters, including business or LLC formation, influencer agreement reviews, intellectual property protection and defense, and more.
Call (713) 909-7323 today or contact us online to get started.
