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.