FTC Brings First Ever Enforcement Action Against Individual Social Media Influencers; Updates Warnings and Guidance for Influencers and Marketers

by International Lawyers Network
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On the heels of issuing more than 90 letters to celebrities, bloggers and other influencers in April 2017, as well as receiving continued petitions by watchdog organizations such as Public Citizen, the Federal Trade Commission (FTC) brought its first direct action against individual influencers for failing to disclose their material connections on social media.

At the same time, the FTC sent a second round of warning letters to a subset of the original 90 letter recipients, and also updated its staff publication “The FTC’s Endorsement Guides: What People are Asking” (the FAQs) with additional guidance and clarification for both influencers and marketers.

The FTC’s Complaint

According to the FTC’s complaint against Trevor “TmarTn” Martin (Martin) and Tom “Syndicate” Cassell (Cassell), Martin and Cassell owned and operated the CSGOLotto.com website (CSGO Lotto), which capitalized on certain features of the first-person shooter video game “Counter-Strike Global Offensive” (CS:GO). CS:GO allows players to collect virtual items that can be bought, sold and traded for real money.

The FTC alleged that, since 2015, both Martin and Cassell have posted YouTube and social media videos stating that they had discovered the site, describing their experience and touting their purported winnings. For example, Martin made statements in his videos such as, “We found this new site called CSGO Lotto … they’re like talking to me about potentially doing like a skins sponsorship,” and, “Made 13k in about 5 minutes on CSGO betting. Absolutely insane,” while Cassell posted similar videos and screenshots of himself winning betting pools of over $2,100 on the site with captions such as, “Not a bad way to start the day!” However, in none of these posts or videos (some of which were viewed more than five million times on sites such as YouTube) did Martin or Cassell disclose their “material connection” to the company – in this case, the fact that they co-owned and co-operated the site.

Read more: http://bit.ly/2xqOkyp

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