**cross-posted on It’s Abby’s World After All **

Katy: Hey y’all, my name’s Katy (@sometimesivacay), I’m an attorney (yes, Elle Woods is my role model), & for the past 3 years, I’ve worked at a law firm that almost exclusively practices in the federal arena. This means that we don’t tackle your typical DUI and personal injury suits, our clients are prosecuted by federal agencies, like the DEA, FBI, & yes, even the FTC. I’ve worked on more than a handful of Federal Trade Commission cases and they’ve all come down to one thing: truth in advertising.  A quick legal disclaimer, since we’re on the subject: be advised that this article does not constitute an attorney-client relationship, nor does it qualify as formal legal advice.

Abby: Hi! My name is Abby (@itsabbysworldafterall) and I’ve been on social media in the capacity as a content creator since 2012. As I started to work with more and more brands to supplement my income, I wanted to make sure that I was doing everything by the books. 

After communicating with brands about their required disclosures… I was confused. I felt that every single brand/company did things differently! I started to do some research and kicked things off by talking to other content creators – to say that their information was even more split on what is compliant vs. not… my head was spinning! Thus began my independent research into FTC Disclosures and what is LEGAL and, most importantly, what is NOT LEGAL.

One of the FIRST things, in my experience, that both brands and content creators turn to regarding FTC disclosures is the FTC Influencer Disclosure Guide. This is an 8 page PDF put out by the FTC to cover these disclosures! As a content creator, I felt that this guide left a LOT to be desired – especially in terms of specific examples, verbiage, and most importantly situations in which FTC disclosures are necessary!

I reached out to Katy and after sending her a list of what felt like a million questions and situations, we decided that a LOT of people might be in the same boat with not understanding FTC Disclosures and that it was time to help everyone get their heads above the water!

Katy: With the new year upon us already, Abby & I have been seeing more and more sponsored posts that, while super fun content, don’t always explicitly disclose that the creator has been compensated for the content in accordance with the FTC’s written rules and precedent-set policies. It’s so tempting to show y’all examples, but since we like to shower the world with kindness, and we are all part of a shared community, I don’t want to call anyone out specifically, so we’ll just be explaining what is and isn’t okay.

Abby: We have decided to split this guide into two separate blog posts. The first one (hey, you’re reading it!) is going to be the nitty gritty details of WHAT THE HECK IS THE FTC and WHAT IS TRUTH IN ADVERTISING, and most importantly, why the HECK SHOULD YOU CARE? Part two will include common situations that you might encounter and the proper FTC disclosures. We will site all of our research for you along the way and can even update this post with more situations/examples as they arise.

Katy: Let’s start with the basics!

What is the FTC?

The Federal Trade Commission (FTC) investigates and prevents unfair methods of competition as well as unfair or deceptive acts that impact commerce. (FTC). Basically the FTC exists to protect consumers and to make sure things are legit. With social media usage and marketing on the various platforms at an all time high, these regulations and consumer protections are more important than they have ever been! As consumers/buyers we depend on the FTC to uphold proper standards and to make sure that we are getting honest information about products, services, and so much more!

What are disclosures and why do they need to be a thing?

Disclosures are making facts or information known to the public. (Investopedia). According to the FTC, content creators/influencers need to let their followers/audience know about a business relationship and they need to do it the right way – location of your disclosure in your post is EVERYTHING. (FTC). 

What needs to be disclosed?

We will cover this more fully in our second post with some situations and examples, but basically… you need to disclose ANY BUSINESS relationship — PAID, FREE, FAMILIAL– or PRODUCT EXCHANGE!

Who is responsible for knowing the law (the creator or the brand)?

The FTC makes is VERY clear that the responsibility to make proper disclosures about endorsements lies with the content creator/influencer. (FTC). An influencer is a person who has the ability to influence potential buyers of a product or service by promoting and recommending it on social media. If we break that down, an influencer: (1) has a platform like a social media page (do you notice how non-committal this is? There’s no minimum number of followers, no required amount of time spent, no specific media mentioned) and (2) promotes products or services on that platform. That’s it. Those are the only requirements, an influencer has the ability to influence potential buyers. I have personally heard from MANY content creators/influencers that they feel that it is the responsibility from the brand to inform them as the bigger fish. However, could NOT be further from the truth and it can be confusing as a small account – so PLEASE be protected!!!

What could happen if you don’t disclose properly?

The FTC is cracking down on big companies because they view their paying a pittance to influencers as laundering advertising by paying influencers “to pretend that their endorsement or review is untainted by a financial relationship.” (Source) As recently as February, 2020, the FTC charged a major department store for paying fifty influencers to post about a dress on Instagram but didn’t require disclosure on the part of the creator. The FTC commissioner wants to focus more penalties on the platforms (eg. Instagram), marketing companies (eg. Heartbeat), and Companies (eg. Target) rather than on individual smaller accounts that might not be well-versed. 

However, just because their focus is on bigger brands, doesn’t mean that the FTC is ignoring smaller accounts. While the FTC monitors smaller accounts, more of these breaches are caught when consumers notify the FTC of an account that isn’t disclosing properly. This means that someone could file a consumer complaint against YOU! There is even a hotline for consumers to file formal complaints against businesses and against a content creator/influencer; remember: you are a BUSINESS (even if you don’t have a “ton” of followers. Size matters not!). (FTC).  And although you might skirt financial penalty, you’ll still be required to update your post, and it could result in penalties if you’re blatantly ignoring the policies or if you do it frequently, and I see a lot of accounts frequently violating — even really big accounts! 

This means that you could be fined by the federal government! 

In February 2020, the FTC voted that influencers posting marketing materials without proper disclosure should trigger financial penalties. (Source) The FTC is  “Codifying elements of the existing endorsement guides into formal rules so that violators can be liable for civil penalties under Section 5(m)(1)(A) and liable for damages under Section 19.” (Id.)  “When companies launder advertising by paying an influencer to pretend that their endorsement or review is untainted by a financial relationship, this is illegal payola,” Chopra writes. “The FTC will need to determine whether to create new requirements for social media platforms and advertisers and whether to activate civil penalty liability.” (id.)

Katy:

One last thing before we sign off… Be aware of where you are and the local rules in other countries. (FTC) For example #ad doesn’t translate universally but [advertisement] will, and it’s always best to use the local language along WITH your native language AND English.. German regulations are much higher than in other countries. The UK, US, Australia, and Canada all have fairly similar regulations. Note that you are always subject to the jurisdiction of a place where your advertisements might have an affect, eg. if you’re posting about a German product in the US. So if you are a travel blogger remember two things for jurisdiction: you are subject to the jurisdiction of your country of citizenship AND your country where you are advertising. 

For example, an American blogger who has a large Spanish-speaking following and is traveling to Thailand who is hosted at a hotel in Chiang Mai should clearly write “advertisement / anuncio / โฆษณา “ 

We hope that this post is helpful as you navigate the waters of proper FTC Disclosures! Have questions? Find us (Katy & Abby) on Instagram and shoot us a DM!