In its November 13 letters, the FTC issued warnings to the American Beverage Association (ABA) and the Canadian Sugar Institute, as well as to twelve registered dieticians and other health influencers, about the lack of adequate disclosures in their social media posts. The posts in question were Instagram and TikTok videos in which the influencers discussed the safety of aspartame or endorsed consumption of sugar-containing products but failed to adequately disclose their paid connections to the trade associations.
The FTC’s recently revised Endorsement Guides, published on July 26, 2023, require any “material connection” between an endorser and an advertiser to be clearly and conspicuously disclosed. (Our article on the revised Endorsement Guides and FTC’s proposed rule regarding fake reviews is available here). For a disclosure to be “clear and conspicuous,” it must be easily noticeable and understandable by ordinary consumers. Furthermore, if an endorsement is made through both audible and visual means, the disclosure should similarly be made both audibly and visually. Failure to appropriately disclose a connection between an endorser and the seller of an advertised product or service could amount to an unlawful deceptive trade practice under Section 5 of the Federal Trade Commission Act.
The alleged failures of the influencers to sufficiently disclose monetary connections varied in terms of severity. The FTC stated that some influencers failed to include any indication of their connection to the trade associations at all, while others included disclosures in the captions of videos but not in the videos themselves (which the FTC believed to be an inadequate disclosure of the affiliation). The FTC also commented that the following actions may constitute insufficient disclosures: relying solely on a platform’s built-in disclosure tool if it is not sufficiently conspicuous; use of the disclosure “Paid partnership with ameribev” alone (as many viewers may not understand what “ameribev” is); the hashtags “#sponsored” or “#ad” in the context of the particular posts at issue because such posts did not identify the sponsors thereof; and the hashtag “#safetyofaspartame” because it did not disclose a paid relationship.
The FTC warned that failure to disclose a material connection with an advertiser could result in liability for both the endorser and the advertiser. It further put the letter recipients on notice that continued failure to follow the Endorsement Guides could subject the entities and individuals to civil penalties of up to $50,120 per violation.
To avoid running afoul of the FTC’s revised Endorsement Guides, advertisers should be sure that endorsers disclose material connections in a way that is likely to be noticed and understood by consumers. For guidance on social media advertising and endorsement policies and best practices, please contact us.
Authored by Meryl Bernstein, Veronica Colas, MK Barker, and Connie Potter.