Earlier this year, we examined how changes to the FTC’s Endorsement Guides might affect influencer campaigns and suggested that companies may want to monitor FTC actions in this area to see what types of conduct grab the FTC’s attention. Yesterday, we got some initial clues when the FTC announced that it had sent warning letters to two trade associations – the American Beverage Association and The Canadian Sugar Institute – and 12 health influencers over their posts.

The letters start with a reminder that influencers must ​“clearly and conspicuously” disclose any ​“material connection” they have to a brand (unless that connection is otherwise clear from the context) and then summarize the FTC’s view of what constitutes a ​“clear and conspicuous” disclosure. With that background, FTC staff goes on to express specific concerns about the posts. Here are some of the highlights about what caught their attention:

• Some of the posts didn’t include any disclosure or any other indication that the influencer was connected to the association.
• Some posts included a disclosure in the description, but not in the video. The letters state that because viewers can watch the videos without reading the descriptions, ​“there should be clear and conspicuous disclosures in the videos themselves, for example, by superimposing much larger text over the videos.” Audible endorsements require audible disclosures and visual endorsements require visual disclosures.
• Some of the disclosures in the descriptions weren’t sufficiently clear or conspicuous since they were truncated on TikTok and Instagram, such that viewers wouldn’t see them unless they clicked on the text. Staff also wrote that they ​“do not think that disclosure in a TikTok or Instagram Reels post’s text description is clear and conspicuous.”
• Some influencers relied upon the ​“paid partnership” disclosure tool offered by the platforms in making their disclosures. Staff reiterated previous ​“concerns about the conspicuousness of such built-in disclosure tools alone” and think it is ​“too easy for viewers” to miss them. Those tools are not a substitute for the other disclosures the FTC wants to see in the posts.
• Even if viewers read the ​“Paid partnership,” “#sponsored,” and “#ad” disclosures, FTC staff thought they might be inadequate in the context of the posts, because some of the influencers did not identify the sponsor of the posts. Viewers should know who is sponsoring the posts, not just that a post was sponsored.

The letters ​“strongly urge” the associations and influencers to review their posts to ensure they comply with FTC requirements and ask the recipients to respond within 15 business days. The letters also included the FTC’s Notice of Penalty Offenses Concerning Deceptive or Unfair Conduct Around Endorsements and Testimonials with a warning that the recipients – including the influencers – are ​“on notice that engaging in conduct described therein could subject you to civil penalties of up to $50,120 per violation.”

As we noted in our original post, making disclosures in the way the FTC outlines in the revised Endorsement Guides (and now in these warning letters) may be a departure from common industry practice, which usually involves an influencer making a single disclosure in the first few lines of a post. Companies and influencers who were waiting for FTC action before changing their practices may want to factor these warning letters into their decisions.

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