September, 6th, 2019

By Lauren C. Matturri

It is no surprise that most of us follow certain social media accounts to get advice or recommendations on fashion, cosmetics, electronics, and restaurants.  However, these recommendations are not always what we think they are.

The people who provide these recommendations are called influencers. By definition an influencer is a person who has a large social media following and uses that base to promote certain products and services. Influencers, though they may portray themselves as promoting certain services or products because they truly believe in them, in most cases are not independent sources offering unbiased opinions.

This issue is widely apparent in the fashion industry, where there is a growing problem of influencers and celebrities not being independent and the FTC has started to crack down. The FTC in the past few years has issued regulations regarding sponsored or endorsed posts.[1] Any social media post that is sponsored in anyway must disclose this. This disclosure can be the hashtags #sponsored, #advertisement, or tagging the location of the post as “sponsored.” The FTC requires that the post make it apparent the promotion of a service or product is compensated for in some manner. These regulations do not just apply to influencers but also media companies such as Vogue or NBC when they have a “sponsored” post.

For example, if Taylor Swift were to post about loving her new Stella McCartney purse, chances are that post is not out of the true love she has for that purse, but rather because she was compensated in some manner to make that post. In this example, Taylor Swift would have to disclose her “love of the purse” is sponsored because the post is a paid advertisement for Stella McCartney.

Many argue that followers know when a social media post by an influencer is promoting a service or product out of some sort of business deal. Further, it is argued that these advertising rules do not apply to traditional adverting like commercials or magazine ads. Unlike traditional forms of advertising, social media influencers are using their ability to build a community and allow people to know the details of their lives as part of these advertisements.  People follow influencers to see what their lives are like, where they go on vacations, and for fashion and beauty advice. Because of the growing popularity of influencers and brands utilizing these people to advertise to their target consumers directly, the issue of undisclosed advertising is only going to continue to grow.

The FTC regulations are meant to protect all consumers from deceptive advertising practices. Typically, the demographics of these influencers are impressionable teenagers who may not be aware that the posts about the new pair of jeans the influencer loves are sponsored. Therefore, the guidelines might seem irrelevant to savvy social media users, but the guidelines are meant to protect the masses.

The FTC’s regulations for influencers are meant to provide some transparency to an area where transparency is hard to come by and influencers are having even greater influence than the brands paying the influencers. For example, Arielle Charnas is the founder of the popular blog and Instagram account Something Navy. This influencer’s accounts are so popular that she has collaborated with Nordstrom on a few collections and just went through funding and received a $10 million investment to help Ms. Charnas build a lifestyle brand. A significant portion of her posts contain links that allow her followers to shop her outfits.

While these posts may not directly appear to be sponsored advertising, it is not far off to think a brand would pay her to wear an article of clothing in a post then have it linked to a website where it can be easily purchased given her millions of followers and massive follower engagement with each post. Additionally, brands and even restaurants will ask influencers to create content around visiting their restaurant or shopping their stores. These posts typically do not contain any evidence that they are sponsored advertisements but in reality, an influencer with millions of followers is not going to create an entire, fully edited Instagram story about visiting a specific restaurant unless they are being paid or sponsored to do so.

In the past year or so the FTC had begun to crack down on the most flagrant violators of the FTC social media guidelines by issuing warnings and even filing suits against influencers who do not disclose that posts are sponsored. This issue is seen not only with mega influencers and celebrities that have massive followings like the Kardashians or Jenners, but can be seen by influencers with smaller presences, but devoted followers. It is arguable these types of influencers are the worst violators. This is because the FTC is not aware of them due to their smaller presences, though they have loyal followings and are having a large impact because their followers believe they are part of a close-knit community that is receiving personal and honest recommendations

If you are a brand owner or social media influencer and am not sure if your current practices may be in violation of current FTC guidelines, WHIPgroup can review your current practices and provide advice.


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