FTC Remains Focused on Social Media Influencer Practices

by Saul Ewing Arnstein & Lehr LLP
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Commission Settles First-Ever Complaint Against Individual Influencers, Issues Warning Letters to 21 Others, and Releases Updated Staff Guidance

This week, the Federal Trade Commission (FTC or the Commission) pursued enforcement action against a number of social media influencers over the influencers’ alleged failures to disclose material connections between themselves and the brands endorsed in their posts. 

FTC announced today that Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell, two widely-followed social media influencers in the online gaming community, settled with the Commission charges that they deceptively endorsed the online gambling service CSGO Lotto while failing to disclose they jointly owned the company.  FTC also alleged that Thomas and Cassell paid other well-known influencers to promote CSGO Lotto on YouTube, Twitch, Twitter, and Facebook without requiring the influencers to disclose such payments in their posts.  Per the terms of the settlement, Martin and Cassell must clearly and conspicuously disclose any material connections with an endorser or between an endorser and any promoted product or service.
 
The Commission also announced today that its staff has both sent 21 warning letters to social media influencers regarding their Instagram posts and updated staff guidance for social media influencers and endorsers, “The FTC’s Endorsement Guides: What People are Asking.”  In some of the letters, FTC takes the position that tagging a brand in an Instagram post is an endorsement of the brand that requires an appropriate disclosure.  With regard to the staff guidance, which was last revised in 2015, it now includes an additional 20 questions and answers on a number of topics related to disclosure of material connections in social media posts, including tags in pictures, Instagram disclosures, Snapchat disclosures, obligations of foreign influencers, disclosure of free travel, whether a disclosure must be at the beginning of a post, and the adequacy of various disclosures like “#ambassador.”  
 
The Commission’s recent actions are an extension of its move earlier this year to call attention to social media influencer practices.  As discussed previously, in April 2017, FTC sent educational letters to more than 90 celebrities, athletes, other influencers, and marketers regarding clear and conspicuous disclosure of influencer relationships with brands.  Although the Commission is not disclosing the names of the 21 influencers who received warning letters this week, the influencers were among those that received FTC’s educational letters in April.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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