FTC Cracking Down on Social Media Sponsorships

September 8, 2016

The Federal Trade Commission (FTC) recently announced that they are cracking down on celebrities and social media influencers who get paid to promote brands and fail to clearly disclose that they were compensated for the endorsement.

The FTC regulates advertising across many different mediums, including social media. So does this apply to you? If you’ve been compensated in some way in exchange for promoting a brand, then yes, FTC regulations require a clear disclosure of that relationship to consumers. Compensation doesn’t necessarily only mean receiving cash – if you receive free products in exchange for promotion, that can be enough to trigger a disclosure requirement to your audience.

As an attorney and social media user, I’m not surprised that the FTC is beginning to look at this issue more closely, especially since I’ve seen what may be rampant neglect of the FTC disclosure requirements by people I follow on Twitter, Instagram and Facebook. I’ve seen posts from celebrities, bloggers, CrossFit athletes, cyclists, technology enthusiasts and others who appear to be receiving products or services in exchange for personal endorsements, all without a clear disclosure that there is a sponsorship.

In addition, if you’re an social media influencer and you’ve signed a contract, your contract likely requires you to comply with all applicable laws, which would certainly include FTC regulations. Thus, if you do not properly disclose the relationship, you not only have a potential problem with the FTC, you may be jeopardizing your relationship with your current sponsor and future sponsors.

If you have questions about how FTC regulations apply to you and your social media presence, don’t hesitate to contact your attorney.

Matt Landis is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. He received his law degree from Widener University and works regularly with business owners and entrepreneurs.