Tag archives: FTC

Pixels + Social Media Influencers – Authenticity = Virtual Influencers

Social media influencer marketing has had a significant impact in the way brands reach consumers worldwide. Social media influencers are very important to platforms such as YouTube and Instagram and even more so to brands. As independent contractors, social media influencers garner more outreach than any company’s advertising team could ever hope to accomplish. From engagements like brand awareness and product placement and “authentic reviews,” according to Business Insider, the influencer marketing industry is expected to be worth up to $15 billion by 2022—up from $8 billion in 2019. Influencers, once a niche group, are now everywhere—we can spot … Continue Reading

Deception sells: The current theme in the age of social media

In this age of social media, companies and brands have faced countless criticisms for their lack of transparency, copyright infringements disguised in the form of “flattery or inspiration” and we can’t forget the many inclusivity flops.

Brands, including beauty brands, are now dedicating more of their marketing budgets to paying influencers for their “honest” reviews in hopes that they can convince the public to purchase their products. What’s more striking is that consumers are heavily relying on social media for help in determining where to place their value and money. With these stakes, some companies have turned to deceptive practices … Continue Reading

The Right to Write

How important are online reviews in your shopping experience? Many rely heavily on consumer reviews in order to generate business. But what happens when instead of providing customers the candid information that they deserve, companies try to silence their critics in order to improve their online reputation?

In recent years, companies selling products and services have included non-disparagement clauses (“gag clauses”) in their contracts in hopes of curtailing online criticism. Gag clauses are aimed at discouraging customers from writing honest reviews that criticize the company—and punished customers for their negative reviews in the form of liquidated damages. The problem is … Continue Reading

Celebrity Endorsements, Cryptocurrencies, and Initial Coin Offerings

Our readers may recall that 2017 brought warning letters from the U.S. Federal Trade Commission to celebrities who had posted some photos on Instagram and the FTC has recently taken action regarding some undisclosed “material connections.”  A post on our sister blog, Regulation Tomorrow, describes the U.S. Securities & Exchange Commission’s recent warnings about celebrity endorsements of cryptocurrency and “initial coin offerings” and contrasts the SEC and FTC guidance and regulatory scope:

https://www.regulationtomorrow.com/us/celebrity-endorsements-cryptocurrencies-and-initial-coin-offerings/Continue Reading

FTC and Social Media Influencer Endorsements

On September 7, 2017, the U.S. Federal Trade Commission (FTC) announced that it had entered into a proposed consent agreement with two individuals and their company that allegedly ran an online gaming community website that allowed users to gamble virtual currency.  According to the FTC complaint, the two individuals promoted the gaming site and not only failed to disclose their ownership interest in the site or that they were playing with company money, but they also paid other social media influencers between $2,500 and $55,000 to promote the site.

As we had previously written, in the Spring of 2017, … Continue Reading

Advertising on the Internet – What Makes a Disclosure “Clear and Conspicuous”?

Increasingly, companies are turning to the internet and social media platforms to advertise their products, often by using native advertising or by providing incentives such as payments or free products to social media “influencers” (Instagrammers, Pinners, Bloggers and Vloggers, to name a few) in exchange for an endorsement.

As we have previously discussed, the FTC has issued Endorsement Guides that provide guidance on appropriate advertising on social media. The FTC has stated that advertising on social media platforms is subject to the same consumer protection laws that prohibit deceptive advertising and that advertising claims must be accompanied by “clear … Continue Reading

President Obama signs the “Consumer Review Fairness Act of 2016”

On Thursday, December 15, 2016, President Obama signed into law H.R. 5111, now officially titled the “Consumer Review Fairness Act of 2016.” The substantive provisions of the bill, which we discussed in a previous post, are virtually unchanged, but the law’s text provides further details regarding enforcement by the Federal Trade Commission and the states.

One noteworthy enforcement feature of the law is a cross-reference to the Federal Trade Commission Act. A violation of the Consumer Review Fairness Act of 2016 by offering a form contract containing a provision described as void in the law is also … Continue Reading

Who paid you to post that? Truth and Transparency in International Advertising

Social media personalities who have tweeted, grammed, Vine’d and snapped their way to stardom have no doubt caught the attention of businesses large and small. Much like how professional athletes and other celebrities are paid to endorse products, businesses and retailers have increasingly turned to recognized social media personalities (often called “influencers”) to recommend their products. Although social media influencers can get paid significant sums of money for product placement and rave reviews, sometimes the relationship with the company is not readily apparent to the public. Where the endorsement is not based on genuine user experience, this can have a … Continue Reading

Instant Fame and the FTC Endorsement Guides

Native advertising—or advertising that appears to match the form and function of the platform upon which it appears—and social media endorsements provide considerable opportunities for companies to strengthen their brands and reach consumers in innovative ways. More and more, “influencers” like Instagram “models,” fashion and lifestyle bloggers, “pinners,” and “vloggers” are joining the ranks of A-list celebrities in receiving substantial sums, or freebies like helicopter rides and luxury cars, to endorse products in their social media posts. Companies stand to gain sizable increases in their brand value and sales by capitalizing on the fame of social media influencers.  But … Continue Reading

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