Press "Enter" to skip to content

Full Disclosure: The Federal Trade Commission now requires that product endorsers disclose company relationships on social media

The Federal Trade Commission is now requiring that those with the power to influence a brand on social media do so with full disclosure if there is a financial arrangement or other connection to a company – or if products or other incentives have been given free-of-charge or at a discounted price.

A new FTC guide, Disclosure 101 for Social Media Influencers, lays out the responsibility of those promoting products and services online, and explains the agency’s new rules for how those with a relationship or financial connection to companies must now disclose those relationships.

The change would also apply to product testing personalities as well as teachers and school systems who are compensated or given gifts or deals with the companies.

In recent years, schools have promoted education technology software with shout-outs and photos of students using school vendor products and new technologies  If teachers or employees are paid or given gifts or incentives by those companies, they are now required to disclose the connections.

The FTC says, “[The] responsibility to make disclosures about endorsements lies with the influencer…” And those influencers “cannot assume that followers are aware of their connections to brands.”

‘If you endorse a product through social media, your endorsement message should make it obvious when you have a relationship (‘material connection’) with the brand. A ‘material connection’ to the brand includes a personal, family, or employment relationship or a financial relationship – such as the brand paying you or giving you free or discounted products or services,” The FTC says.

Endorsers of products must also disclose the relationship prominently if they have any financial, employment, personal, or family relationship with a brand. But the FTC says that the financial relationships are not limited to money.

“Disclose the relationship if you got anything of value to mention a product. If a brand gives you free or discounted products or other perks and then you mention one of its products, make a disclosure even if you weren’t asked to mention that product,” the FTC says.  Influencers are also asked to make the disclosure even when those evaluating a product online believe it is done without bias.

The FTC now requires that product endorsers with influence, who are directly benefiting from a company relationship, must also make it clear and prominent in individual written messages, videos or live stream videos. Simply stating the connection in an “about me” or profile page will not suffice. “The disclosure should be placed with the endorsement message itself,” the FTC says.

The FTC also says that product endorsements cannot be made for products not actually evaluated.  “You can’t talk about your experience with a product you haven’t tried. If you’re paid to talk about a product and thought it was terrible, you can’t say it’s terrific. You can’t make up claims about a product that would require proof the advertiser doesn’t have – such as scientific proof that a product can treat a health condition.”

Tagging, “likes” and pins are also ways of endorsing products and disclosure must be made.

However, the FTC says that if there is no brand relationship and someone is simply mentioning a preferred product, then a declaration that there is no brand relationship need not be mentioned.

More information about the FTC’s Advertising Disclosures Guidance for Online Influencers can be found here.

The Gunpowder Gazette, LLC - P.O. Box 183, Monkton, Maryland 21111 - All Rights Reserved