The Federal Trade Commission (“FTC”) recently updated its Endorsement Guides: What People are Asking, a source of guidance to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Endorsement Guides”), which were last revised in 2009. The Endorsement Guides reflect the basic truth-in-advertising principle that product and service endorsements must be honest and not misleading.
The FTC has made it clear that the Endorsement Guides apply to social media, which includes Facebook, Twitter, Instagram, and Pinterest. Thus, if a company incentivizes or rewards a consumer to endorse its product or service on social media sites — even though the endorsements may not look like traditional advertising — those posts are subject to the Endorsement Guides. Hence, if a company or advertiser compensates (e.g., through money, discounts, free products) or otherwise incentivizes (e.g., through a contest or sweepstakes or opportunity to be featured in an advertisement) a consumer’s social media post (e.g., Facebook or Pinterest post, Instagram picture, YouTube video, Tweet, blog or online review, the endorsement must comply with the Endorsement Guides. The social media endorsement must (1) be truthful and not misleading, (2) reflect the typical experience of a consumer, and (3) disclose any material connections to the advertiser of the product or service in a clear and conspicuous manner. Companies and advertisers are responsible for making sure that endorsements in social media posts comply with the Endorsement Guides. Failure to comply with the Endorsement Guides can lead to a FTC enforcement action for deceptive advertisements.
The following are tips for ensuring compliance with the Endorsement Guides based on the recent update and FTC actions:
- Social Media Likes and Pins. Using social media features such as likes and pins to endorse a company’s products or services probably requires the necessary disclosures if the consumer is being compensated or incentivized for the endorsement (g., getting a discount on a future purchase or being entered into a sweepstakes for a prize). Since some social media platform features do not allow for the required disclosures, the FTC advises that a company should not encourage such endorsements. The FTC, however, makes it clear that buying fake “likes” and “likes” from non-existent people or people who have no experience using the product or service, are clearly deceptive trade practices subject to an enforcement action by the FTC.
- Pictures. The FTC previously addressed pictures as endorsements in its letter to Cole Haan regarding its Wandering Sole Pinterest Campaign. If a consumer is compensated or incentivized to post a picture of the product or the consumer using the product on sites such as Pinterest or Instagram the post is an endorsement subject to the Endorsement Guides.
- Social Media Contests. Clear and conspicuous disclosers are required for companies engaging in social media contests and sweepstakes (g., giving consumers the opportunity to win a prize in exchange for social media posts). Companies must require entrants to include a disclosure as part of their post explaining that they are getting a chance to win by posting. Moreover, in order for the disclosure to be clear and conspicuous, the FTC recommends using a disclosure of “contest” or “sweepstakes”— abbreviations such as “Sweeps” is likely insufficient.
- Employee Endorsements. When an employee endorses his or her employer’s products on social media, the employee should clearly disclose the relationship with the employer— listing your employer on your profile page is insufficient. Moreover, companies should periodically remind their employees not to post positive reviews online without disclosing the relationship between the employee and employer.
- Video Uploads: Video uploads on sites such as YouTube and Facebook that constitute an endorsement must include the required disclosures in the video itself, preferably at the beginning of the video and throughout the video if it is long. Disclosures in the video description or at the end of the video are insufficient.
- Soliciting Reviews. Soliciting online reviews and blogs is permissible. If the review was “incentivized” (g., the consumer is given the opportunity to be featured in an advertisement) or compensated (e.g., free or discounted hotel stay), then the required disclosures must be made. Endorsements must reflect the honest opinions or experiences of the endorsers; thus, companies should not incentivize or encourage reviewers to post positive reviews.
- Social Media Disclosures. Even if space is limited such as in a Tweet, the required disclosures must be made. Starting the Tweet with “Sponsored”, “Promotion”, “Paid ad” “Ad:” or “#ad” would likely be effective. Moreover, the FTC indicated that social media disclosures made through website hyperlinks or buttons with the words DISCLOSURE or LEGAL are likely insufficient means of disclosing material connections as consumers may not click on the link and they may not understand the important nature or relevance of the information to which the hyperlink refers. No special wording is required to disclose the material connection, a simple disclosure such as “Company X gave me this product for free to try . . . .” will usually be effective.
It is important for companies and advertises to implement a social media policy and structure social media contests and sweepstakes to ensure compliance with the Endorsement Guides. Culhane Meadows can assist your company to ensuring compliance with all FTC rules and regulations.
Michelle Tyde is a Partner in Culhane Meadows’ Atlanta office. Clients rely on Michelle’s counsel for a number of marketing, advertising, and FTC regulatory issues, including truth-in-advertising rules, Children’s Online Privacy Protection Rule, Telemarketing Sales Rule, and data security and privacy regulations and standards. She is Certified Information Privacy Professional (US) through the International Association of Privacy Professionals and an adjunct professor with Emory Law School.