By Perry Viscounty, Latham & Watkins LLP
With the Federal Trade Commission (the “FTC”) recently cracking down on social media influencers and high profile marketing disasters like the Fyre Festival, it is more important than ever to understand the legal framework surrounding social media advertising. Here are 10 legal basics governing influencer endorsements:
1. Section 5 of the FTC Act, which prohibits “unfair or deceptive acts or practices affecting commerce,” applies to social media endorsements.
2. Any material connection between the brand and the influencer must be disclosed in the post.
3. Material connections can be small. For example, the National Advertising Division (“NAD”) found a $4 gift card offered to consumers for engagement with a brand to be material.
4. Disclosures must be conspicuous.
5. Worried about character limitations? #ad is acceptable and only uses 3!
6. However, #don’t #bury #ad #where #consumers #are #likely #to #miss #it.
7. Posts must be honest and accurate. The influencer should believe what they are saying about your product/service.
8. Choose your hashtags wisely—courts and NAD have found that certain hashtags give rise to trademark infringement or false messaging.
9. The brand is responsible for its influencers and must reasonably monitor its network for compliance.
10. Influencers themselves may be liable for statements made in their endorsements.
Want to learn more? Check out the full FTC Guidelines and be sure to attend my IMPACT17 presentation on “Disclosing Paid Endorsements: Being Mindful of the Risk and Reward.”
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