The Federal Trade Commission (FTC) recently sent warning letters to 12 health influencers and two trade associations concerning inadequate disclosures on Instagram and TikTok. The letters warned that inadequacies of this nature could result in civil penalties of up to $50,120 per violation.
The letters alleged that these influencers were paid by trade associations (American Beverage Association and the Canadian Sugar Institute) to promote the safety of artificial sweetener aspartame and the consumption of sugar containing products. The influencers posted videos and pictures on Instagram and TikTok stating, for example, that “low-cal sweetener aspartame has been repeatedly affirmed as safe” and that “aspartame is safe.” According to the FTC, each of these posts contained inadequate disclosures regarding each influencer’s connection to the sponsor.
The FTC’s Endorsement Guides state that if there is a “material connection” between an endorser (e.g., an influencer) and the marketer of a product (i.e., a connection that might affect the weight or credibility that consumers give the endorsement), that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement. Material connections include, among other things, monetary payment and the provision of free products to the endorser. “Clear and conspicuous” means that a disclosure is difficult to miss (i.e., easily noticeable) and easily understandable by ordinary consumers. Consumers should be able to notice the disclosure easily, and not have to look for it.
The FTC’s disclosure requirements apply to all influencers, from micro influencers to macro influencers and celebrities. Of note, most of the recipients of the FTC’s warning letters were in the micro influencer category, one of which currently has only about 4,500 Instagram followers.
The FTC cited a number of inadequacies in the influencers’ disclosures, including the following:
- “The videos did not include any disclosures in the videos themselves. Viewers can easily watch a video without reading disclosures in a post’s text description. There should be clear and conspicuous disclosures in the videos themselves, for example, by superimposing much larger text over the videos. In your first three videos, you made endorsements visually, so the disclosures should have been made visually. In the fourth video, the endorsement was made through both visual and audible means, so the disclosure should have been made both in the video’s visual and audible portions.”
- “You relied upon the ‘Paid partnership’ disclosure tool in making your disclosure in your July 13 Instagram post. The [FTC] has previously expressed concerns about the conspicuousness of such built-in disclosure tools alone. We think it is too easy for viewers to miss seeing the ‘Paid partnership’ disclosure in your posts. (That does not mean that you should not use such tools in addition to other disclosures).”
- “The #sponsored disclosures appear in or below the seventh line of each post description, making them insufficiently conspicuous. When people view Instagram posts, longer descriptions are generally truncated, with only the first two or three lines displayed unless viewers click on the text description. Any required disclosure should be presented without having to click. In addition, an Instagram Reel’s text description is in small print, at the bottom of the screen, sometimes poorly contrasting, and doesn’t stand out. Videos have many competing elements. We therefore do not think that a disclosure in the text description of such posts is clear and conspicuous.”
- “Even if viewers read the words ‘Paid partnership with ameribev’ and ‘#ad’ disclosures, they may be inadequate in the context of your post because you may not have adequately identified the sponsor. Viewers might not understand that the sponsor is promoting the sale of aspartame or products containing it. Also, many viewers may not understand what ‘ameribev’ is. Without knowing who the sponsor of the post is, viewers might not be able to adequately evaluate the weight and credibility of your endorsement.”
- A material connection disclosure should match the medium of the message (e.g., if a disclosure is made through visual and audible means, the disclosure should be in the video’s visual and audible portions).
- Do not rely upon the “Paid partnership” disclosure tool in making your disclosure (that does not mean that you should not use such tools in addition to other disclosures).
- The material connection disclosure should be conspicuous.
- Adequately identify the sponsor of a post. #ad alone may not be sufficient in the context of the post.
- Don’t assume that you don’t have to follow the rules because your following is small.
Influencers should revisit their practices when it comes to sponsored posts, taking into account these warning letters along with the revised Endorsement Guides. If you need assistance with material connection disclosures, feel free to reach out to Lauren Carey.