In March 2020, Teami, LLC (Teami), a marketer of teas and skincare products, agreed to settle Federal Trade Commission (FTC) charges that, among other things, social media influencers hired by Teami failed to adequately disclose that they were being paid to endorse Teami products on social media. The FTC filed a federal court complaint against Teami and sent warning letters to several well-known influencers who endorsed Teami products on social media (including Jordin Sparks, Adrienne Bailon, Jenicka Lopez, Leyla Milani-Khoshbin and Cardi B). The letters emphasized each influencer’s obligation to disclose their material connection with a brand when endorsing products on social media. Below are a few of the social media posts that were at issue in the Teami case.

If an influencer has a connection with a brand or company that might affect the weight or credibility that consumers give the endorsement, that connection should be clearly and conspicuously disclosed. This means the influencer should use clear language and make their disclosures stand out.

In the Teami case, the FTC emphasized that the disclosure should (1) be above the “more” button, (2) not be hidden among multiple tags, hashtags, or Instagram handles and (3) be included in all related posts.

If an influencer fails to make adequate disclosures about their material connections to a brand, the individual influencer and the brand may be subject to legal enforcement action by the FTC.

Curious about the three Ws (when, where and what) of social media disclosures? Check out this blog post. If you have any questions, please reach out to me.

Have you received free (or discounted) products and/or money from a brand to mention their product(s) in a video or post? If so, certain disclosures may be required by law. As an influencer, it is your responsibility to make these disclosures.

When to Disclose

A disclosure is required when you have a relationship with a brand. You have a financial relationship with a brand if the brand gives you anything of value to mention their product (e.g. free product, discounted product, money). Telling your social media followers about this kind of relationship is important because it allows them to weigh the value of your endorsement. Note, however, if you mention a product that you paid for yourself, there is no need to disclose the absence of a relationship.

What to Disclose

A simple explanation is generally sufficient (e.g. “Thanks to [name of brand] for the free product”). If using a hashtag to identify a material connection, make it clear, such as:

>> #ad

>> #advertisement

>> #sponsored

>> #[name of brand]ambassador

>> #[name of brand]partner

Avoid ambiguous hashtags to identify material connections, such as:

>> #sp

>> #spon

>> #thanks

>> #ambassador

>> #partner

>> #collab

Where to Disclose

Make sure people will see and understand the disclosure. You should avoid burying the disclosure in a bio or among a series of hashtags or other disclosures. For an in-feed Instagram post, disclose a material connection before the “More” button. On Instagram stories, superimpose the disclosure over the picture. In a live stream, repeat the disclosure as needed to ensure that viewers see it. In a video, place the disclosure within the video itself, not just in the description of the video. In other words, place the disclosure so it is hard to miss.

Other Tips

>> Do not assume that a platform’s disclosure tool is good enough, but do consider using it in addition to your own disclosure.

>> Do not assume your followers already know about your brand relationships.

If you have any questions on disclosures (why we use them, where to put them, how to write them), please reach out to Lauren Carey.

Behind every sponsored post is an influencer agreement. Influencer agreements can range in sophistication, but are generally drafted with an objective of being relatively brief and signed by the influencer with little or no need for negotiation. That being said, these documents contain serious legal implications and should be read carefully and tailored as needed.

Understanding the terms of your influencer agreement can (1) maximize your negotiating power and (2) ensure your own compliance.

Influencer agreements should address key business terms, such as the length of the agreement (typically tied to a campaign), compensation or other incentives, frequency of posts, platforms on which the posts should be made and whether the company requires review of any content before posting. When reviewing these terms, the influencer should make sure that they accurately reflect the deal.

Agreements with influencers will also contain a number of legal terms, some of which are briefly summarized below:

Exclusivity: An exclusivity provision may limit the brands that an influencer can work with during the length of the campaign and optionally for a time period afterward. An influencer will want to limit the time and scope of this provision, or strike it altogether, in order to maximize their ability to work with other brands.

Ownership: Companies typically prefer outright ownership of the intellectual property rights in the content influencers create for them. That being said, influencers may push back and seek to keep ownership of their posts.

Use of Influencer’s Name, Likeness and Information: The agreement may include permission to use the influencer’s name, likeness and identifying information if the company wants the right to promote its connection with the influencer. Companies try to ensure they can use this information without needing to seek further consent or approval from the influencer. An influencer will want to review the scope of this provision to understand what it covers and narrow the language if needed.

Confidentiality: This provision generally requires the influencer to keep confidential certain information he or she learns in connection with the campaign. If the company is particularly sensitive about disclosing confidential information, it may require the influencer to sign a stand-alone confidentiality agreement.

Indemnification: This provision may obligate the influencer to compensate the company for losses or damages that may occur in connection with the arrangement. An influencer may try to strike this obligation or at least limit their indemnification obligations.

Other tips:

>> Read and understand the company’s social media endorsement policy, which is often incorporated into its form influencer agreement.

>> Industry-specific laws, rules or regulations may be layered into an influencer agreement.

If you have any questions on influencer agreements (how to read them, why we draft them, when to negotiate them), reach out to Lauren Carey.