The Federal Trade Commission (“FTC”) is cracking down on trade associations and paid influencers regarding the adequate disclosure of paid promotions. Recently, the FTC sent warning letters to two trade groups and twelve health influencers regarding certain Instagram and TikTok posts that promoted the safety of the artificial sweetener aspartame and the consumption of sugar-containing products. According to the FTC, these posts did not adequately disclose that they were part of a paid promotion.
The FTC’s warning letters noted that disclosures included in the caption of videos may not be sufficient to communicate to viewers that the posts were paid advertisements. The FTC also noted that using a social media platform’s built-in “paid partnership” disclosure tool might not be conspicuous enough for viewers to understand the specifics of paid advertisements.
These warnings come several months after the FTC released updated “Guides Concerning the Use of Endorsements and Testimonials in Advertising,” which we covered here. Under the revised guides, paid endorsers of a product must “clearly and conspicuously” disclose any connections “between the endorser and the seller of the advertised product that might materially alter the weight or credibility of the endorsement.”
Running afoul of the FTC’s guides can result in repercussions and necessitate corrective action. For example, the warning letters advised that influencers could be personally liable for $50,120 in civil penalties for each future failure to comply with the guides, and also requested that the recipients contact the FTC within fifteen days to describe the actions taken to address the FTC’s concerns.