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April 19, 2017

Public Citizen’s Push Leads to FTC Warning on Social Media Products

Statements of Public Citizen Experts

Note: The Federal Trade Commission (FTC) today sent more than 90 letters reminding influencers and marketers that they should clearly disclose their relationships to brands and companies when promoting or endorsing products through social media platforms. Because the FTC has consistently delayed action to enforce its own policies, Public Citizen, along with partner organizations, filed petitions in 2016 demanding the commission take action on the proliferation of undisclosed paid ads on platforms like Instagram. Today’s FTC letters mark the first time that FTC staff has reached out directly to educate social media influencers themselves.

View the November 2016 letter to the FTC, which includes a list of the posts that Public Citizen reported to the agency. (PDF)

“Nondisclosed advertising, in violation of Federal Trade Commission (FTC) standards, is rampant on Instagram. In September, Public Citizen, along with the Center for Digital Democracy and Campaign for Commercial-Free Childhood, presented the agency with information showing that 113 ‘influencers’ – celebrities, models, athletes and others with large followings, especially among young people – had endorsed a product without disclosing compensation relationships. We noted that this long list of examples was illustrative, not exhaustive.

“Today, the FTC has validated our concerns, sending 90 letters to influencers and also to the brands that employ them, informing them that their practices are in violation of FTC guidelines. This move is welcome, but insufficient.

“While many of the influencers may be unaware of FTC rules, the marketing companies are not so naïve. They should receive more than a gentle reminder of FTC standards. At a minimum, they should be given a warning that failure to cure their abuses will result in the FTC undertaking enforcement action. Ideally, the FTC should announce that it is investigating repeat offenders and quickly bring action against them.

Instagram has become a Wild West of disguised advertising, targeting young people and especially young women. That’s not going to change unless the FTC makes clear that it aims to enforce the core principles of fair advertising law.”

- Robert Weissman, president, Public Citizen

“We live in an era where celebrities and average citizens are sharing every detail of their lives on social media, from what they ate for breakfast to selfies featuring their ‘favorite’ products. It is often unclear whether an Instagram user is paid to post a product endorsement or if they genuinely use it. That’s exactly why brands are using influencer marketing as a primary way to reach young consumers. But without clear disclosure, brands are deceiving consumers and reaping the monetary benefits.

“Even worse, nondisclosed influencer advertising covertly promotes products that could harm consumers, especially impressionable teens and young adults. The FTC’s decision to send reminder letters to influencers in violation of FTC rules is only a first step. Until the FTC takes enforcement actions against repeat offenders, the culture around influencer marketing will not change and consumers will continue to be misled.”

- Kristen Strader, campaign coordinator, Public Citizen’s Commercial Alert

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