Increasingly, influencers are being used by social media-savvy advertisers to encourage consumers to buy their products. And it works: these influencers have an outsized impact on what we buy. In this week’s podcast Meghan Stoppel and Hannah Cornett discuss warnings from the FTC to advertisers about how and when they should disclose influencer endorsements, while considering the likelihood that where the FTC leads, state AGs will follow.
(00:24): Meghan introduces herself and her colleague, Hannah Cornett, for this final episode in season 3.
(02:22): She explains that this episode goes behind the headlines of a situation where the FTC identified “influencers” that were posting across multiple social media platforms.
(03:16): Hannah provides additional detail: the FTC sent warning letters to two trade associations and 12 health influencers alleging that influencers were posting without adequately disclosing the fact that they were being incentivized to promote the products.
(03:44): Meghan clarifies that the influencers were allegedly being paid by the trade associations.
(03:57): Hannah explains that in some instances there were disclosures that the endorsement was an advertisement, but the FTC took issue with whether the disclosures were sufficiently clear and conspicuous.
(04:19): Meghan notes that the FTC letter went not just to the trade associations but also to the influencers themselves, who were dieticians being paid to promote the safety of aspartame-containing products, i.e. the influencers themselves were being put on notice that they are equally liable for potential violations of federal law.
(05:42): She reiterates that a key concern of the FTC is the conspicuousness of the disclosures. The FTC is suggesting that where a video is posted it is necessary for the disclosure to appear on the video itself, not just in the accompanying comment, a sea change from the FTC’s prior position on endorsements. She postulates that state attorneys general will take the same position.
(07:01): Meghan goes on to summarize the discussion at a recent NAAG Consumer Protection Conference, where the topic of endorsements by social media influencers came up in the context of fake reviews.
(07:53): Hannah advises businesses to keep an eye out for more updates in this rapidly changing area of law.
(08:09): Meghan agrees and adds that businesses should be sure to look at the FTC’s most recent version of its endorsement guidelines for new disclosure standards.
(10:00): They caution that these guidelines can apply at the state level too, since state AGs look to these guides to decide what is a violation of their respective trade practices statutes.
(10:47): Meghan cites the Google, iHeartMedia multistate as evidence that state AGs are becoming more active in this area, and teaming up with the FTC to bring joint actions.
(12:38): Meghan asks how businesses can start to get their arms around the compliance challenges and speculates that technology may offer solutions.
(13:07): Hannah responds that Amazon is at the forefront and has announced that they have been using advanced AI to identify fake reviews and take them down, consistent with their business interest in ensuring that reviews of their products and services are legitimate.
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To read more about the news story on which this podcast is based, click here.