Who is afraid of the Federal Trade Commission (“FTC”)? Not many celebrities, influencers or fashion brands. With that in mind, the ramifications – or lack thereof – of the letters that FTC sent to brands and individuals taking issue with allegedly undisclosed sponsored posts on Instagram are certainly proving interesting.
You may recall that in March, the FTC announced that it had sent 90+ letters urging influencers and brands to familiarize themselves with federal advertising law, including the need for clear and conspicuous disclosures of compensation and/or other relationships when promoting or endorsing products on social media. The letters specifically took issue with allegedly undisclosed sponsored posts on Instagram – and the aftermath is continually developing, but not in a terribly promising manner.
Over two months after the FTC’s letters went out, no shortage of the celebrities and brands named in the letters continue to flout the government organization’s advertising guidelines. In some cases, individuals have taken to social media to call out the FTC for singling out posts that were, in fact, not sponsored at all. So, what changes – if any – have been underway since the FTC’s letters went out and what is standing in the way of uniform observation of federal truth in advertising regulations amongst some of the world’s biggest stars?
Diddy, Pretty Little Liars actresses Shay Mitchell, Ashley Benson, and Lucy Hale; the brands of influencers Chiara Ferragni and Rach Parnell; models Behati Prinsloo, Naomi Campbell, Nina Adgal, Emily Ratajkowski, and Heidi Klum; Ciara, Kristin Cavallari, Sofia Vergara, Victoria Beckham, Scott Disick, Lindsey Lohan, Bella Thorne, Zendaya, and Jennifer Lopez, among others were some of the individuals on the receiving end of the FTC’s letters. Brands, such as Chanel, Yves Saint Laurent, Puma, and Adidas, also came under fire.
However, despite such official action by the FTC – even if it was merely educational, in nature – little change is underway. As we noted last month, fashion industry-specific influencers have been largely undeterred by the looming federal attention.
While some of the celebrities targeted by the FTC have changed their ways – Diddy, for instance, has begun including #ad on posts about his vodka brand, Ciroq; actress Bella Thorne has taken to prominently including proper disclosure language in her posts; and models Nina Adgal and Emily Ratajkowski have started adding “#ad” and “#Sponsored” to their posts – most of the individuals named by the FTC are not disclosing sponsored posts in the appropriate manner (as set forth by the FTC in its letters) or making their connections with brands clear at all.
This makes sense considering that recent reports suggest that roughly 93% of social media content by celebrities takes the form of undisclosed sponsored posts.
A look at Scott Disick’s Instagram page, for example, demonstrates that little – if anything – has changed since he received an FTC letter, as his posts still lack disclosures. Zendaya has also seemingly continued to flout disclosure rules, posting about Cover Girl – a brand with which she has a material connection – without proper language. The same can be said for Pretty Little Liars actresses Ashley Benson and Shay Mitchell, among others, who continue to promote brands sans disclosures.
And do not forget one of the fashion industry’s most flagrant truth-in-advertising outlaws, mega-influencer Chiara Ferragni. One of the few fashion bloggers to receive an FTC warning letter (by way of her long-time Blonde Salad/Chiara Ferragni Collection business partner Riccardo Pozzoli), Ferragni – who boasts 9.7 million Instagram followers – has continued to run afoul of FTC regulations. She has begun adding #ad to some of her posts, but commonly places it in between a bunch of other hashtags, which the FTC has held is not “clear and conspicuous,” and thereby amounts to improper disclosure.
It has also held that language, such as “#sp,” “Thanks [Brand],” or “#partner”, as well as the inclusion of disclosures at the end of lengthy posts - or below the Instagram "more" button - will not suffice.
So, with celebrities/influencers’ behavior running the gamut in terms of legally-sound disclosures, what is really going on here? Well, according to the National Law Journal (“NLJ”), which requested copies of responses sent by brands and individuals that received letters from the FTC, the response has, in fact, been a mixed bag. Per the NLJ, while a few companies, such as FabFitFun and Muscle Milk, did respond to the FTC’s letter, its “request turned up no records of correspondence from any celebrities or their representatives.”
In addition to the lack of corrective action by celebs, the FTC is not without fault. Problematic is the fact that some of the instances that the FTC identified in its letters were, in fact, not sponsored at all. FTC attorney Michael Ostheimer told the NLJ that the agency learned that some of the celebrities were not paid to promote a product featured on their Instagram accounts. “Some influencers just posted on their own,” he said.
Model Heidi Klum took matters into her own hands to set the record straight, editing the Instagram post with which the FTC issue. The caption now reads: “This is NOT a sponsored Dunkin Donuts post ....and I did NOT get paid for this !!!”
Additionally, posts identified by the FTC, such as one of Bella Thorne in Puma sandals, Jen Selter in an adidas jersey, or the Kardashians eating Popeyes, might not have been sponsored. The fact that the nation’s advertising authority – an inherently sophisticated entity – cannot distinguish between sponsored and authentic posts is quite telling – and indicative of the need for better oversight in this area for the benefit of consumers.
In fact, the lack of clarity as to what is and is not sponsored is a key reason why disclosures are so important in the first place. Consumers should be able to easily identify content that is sponsored and at the same time, be able to assume that the lack of “#ad” or similar language means that such content is not sponsored.
According to the FTC, the landmark bout of activity came after it received “petitions filed by Public Citizen and affiliated organizations regarding influencer advertising on Instagram.” The Instagram posts were subsequently reviewed by FTC staff, and the corresponding letters mark the first time that FTC staff has reached out directly to educate social media influencers themselves.
In addition to the complaint that Public Citizen filed with the FTC, Truth in Advertising Inc., a Madison, Connecticut-based organization, filed a formal complaint last year, alleging that Kris Jenner and the Kardashian/Jenner family "are engaged in deceptive marketing campaigns." The FTC has seemingly failed to take action in connection with that letter – and its 100+ examples of potential violations – entirely.
It is both interesting and potentially foreshadowing of an impending Kardashian/Jenner-specific initiative by the FTC that some of the most influential figures on social media and routine abusers of the FTC’s guides (think: the Kardashians/Jenners, Hadids, and co.) were not on the receiving end of FTC letters. The FTC does not, however, comment on pending investigations.
So, where will the FTC go from here? Its enforcement thus far has proven inconsistent and arguably ineffective, leaving consumers vulnerable to confusion when viewing brands’, celebs’, and influencers’ posts. While it is commendable that some celebrities have begun to include proper disclosures, it is unlikely that most will follow suit without official enforcement action taken by the FTC.