It sounds surprising that the Federal Trade Commission (FTC) would have any role to play with Influencers, but the FTC had found itself in a unique situation.
In the past, there was a lack of transparency with influencer content, misleading and unmarked advertisements and sponsorships. This led to a demand for more transparency, authenticity, communication and regulation.
Which led to the FTC releasing a document in November of 2019.
FTC guidelines for Influencers
The “Disclosures 101 for Social Media” details various laws, set out by the FTC, that influencers have to comply with.
The document emphasises the importance of transparency. If an influencer is endorsing a product through social media, then the influencer should be honest, truthful and responsible with their disclosures (per Endorsement Guides).
You have to know:
a) When to disclose
Do not assume that your followers already know about your relationship with the brand.
You have to disclose any ‘financial, employment, personal or family relationship with a brand.’ Financials are not limited to monetary gain but also products that they got for free or at a discounted rate.
However, if you bought the product and posted it simply because you liked it you do not have to state that you do not have a brand relationship.
b)How to Disclose
The disclosure should be placed in a way that is not hard to miss; it should not be mixed in with a group of links and hashtags. The document breaks down the way endorsements on social media applications like Snapchat and Instagram should go. When you are promoting the brand/product then you should use simple and concise language that your audience can understand. The document adds that you should use direct (and not vague) language.
FTC Instagram guidelines: If you are an Instagram Influencer and you post a picture on your story then you need to give your audience ample time to read through the endorsement.
If you are posting a video on your story then you should consider attaching a text on the video; in case there is no audio on the video or your audience cannot hear the audio from the video.
If you are live streaming from your Instagram account then you should periodically mention that you are streaming to promote the product or brand.
c) What else to know
The document also discourages influencers from talking about an experience with a product you have not tried. You cannot and should not make up claims about a product; you should not falsely misrepresent the product either – by giving false information about a product to sell it.
It is important to note that this will amount to misrepresentation if your audience buys the product based on false information (and they discover the product they purchased was not, technically, the product you sold to them).
Violation of the FTC guideline rules will amount to penalties, fines and legal fees .
In 2014 the FTC charged Sony Computer Entertainment America with misleading their consumers for PlayStation Vita Gaming Consoles. They falsely advertised that the PlayStation included “game-changing technological features” to sell the consoles. This tactic worked, but the advertisements were false, and consumers were refunded.
It is for this reason that Influencers should pay close attention to the FTC guidelines. The FTC will crack down on you if you fail to comply with its rules; ensure that you are transparent, not putting out false information and using clear, concise language in your endorsement.