It can be wonderful and fun to be a social media influencer. But, the bottom line is that social media influencers are engaged in advertising and, as such, must comply with federal and State laws with respect to disclosure. Failure to disclose that you are being paid to endorse a product or service is considered false/misleading advertising and/or to be engaged in unfair/deceptive business practices. This can result in enforcement actions being brought by regulators. This, in turn, can result in expensive civil fines.
The best practice to avoid enforcement actions is to disclose even if your social media influencer contract does not explicitly require disclosure. (Your contract should require that, but some contracts don’t.)
Payment, of course, can come in many forms including cash, discounts, early access to products, free short-term access to (or the “borrowing”) of products/services, free products or services (even if unrelated to the product/service being endorsed), discounts, paid trips, eligibility for prizes, donations or payments made on your behalf, the promise/expectation of media/television appearances, and more.
But, disclosure is ALSO required if there is a “material connection” between you and the provider of the product/service. Payments — in the forms described above — are “material connections.” But there are other examples of a “material connections” such as employment, offers of employment, business, family, or personal relationships/connections, and more.
The Federal Trade Commission (“FTC”) is one of the main agencies that regulates false advertising at the federal level. The FTC has promulgated regulations on what constitutes a “material connection” (along with many examples). The definition is this:
“When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement, and that connection is not reasonably expected by the audience, such connection must be disclosed clearly and conspicuously.”
As can be seen, there are two aspects here. First, a material connection — like the payment or money or a family relationship — is one that could impact the credibility of the endorsement. Second, the connection is one that is “not reasonably expected by the audience.” This second aspect is particularly important for social media influencers. This is because, generally speaking, your audience will “not reasonably expect” a connection that is not disclosed. This is different from a world-famous Hollywood star or a famous sports athlete. Consumers generally expect a product/service endorsement from a Hollywood star or famous athlete IS paid for. So, for such individuals, disclosure of the “material connection” is not always required.
Again, disclosure is the best practice. Further, there is really no reason not to disclose. Your influence is based on the strength of you and your brand. If strong enough, your influence is not diminished by any sort of disclosure.
Contact the Social Media Influencer Attorneys at Revision Legal
For more information, contact the experienced Social Media Influencer Lawyers at Revision Legal. You can contact us through the form on this page or call (855) 473-8474.
