If the Federal Trade Commission (“FTC”) is serious about its recent vow to crack down on misleading celebrity endorsements, its first targets should probably be the Kardashian/Jenners. Some of the most highly followed and most influential individuals on social media, the members of the Kardashian/Jenner clan – along with “it” blogger Chiara Ferragni – are simultaneously some of the most flagrant abusers of the FTC’s guidelines when it comes to disclosures of paid-for posts.
As you may know, the FTC is the government agency that that is tasked with promoting consumer protection, and eliminating and preventing anticompetitive business practices. In this role, the FTC issues guidelines (which are legally binding) that govern “Endorsements and Testimonials in Advertising,” among other things. According to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising both advertisers and endorsers must disclose material connections (think: payments or free products in exchange for representation of the brand) that they share.
The Guidelines also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ad campaigns. If these Guidelines are not met, the FTC may file suit in accordance with Section 5 of the Federal Trade Commission Act (15 USC 45), which prohibits ''unfair or deceptive acts or practices in or affecting commerce.”
According to the fashion press and industry sources, the reality television family is known to accept compensation in exchange for posting on social media (and a lot of it … according to CR Fashion Book, Kendall, for instance, rakes in upwards of $300,000 for a single Instagram post). They can demand such rates due to their vast amount of influence over consumers, as indicated, in part, by their enormous social media followings. With this in mind, they arguably have a duty, as sophisticated parties (with sophisticated lawyers), to be informed of the regulations and be held to them.
You may recall that last July, Kim Kardashian came under fire for posting a photo of herself on Instagram holding the prescription drug Diclegis without posting a disclaimer that the posting was sponsored. While it seems that the FTC never took action, the Food and Drug Administration (“FDA”) did, holding that a review of Kardashian’s posts resulting in a finding that they were “false or misleading in that it presents efficacy claims for Diclegis, but fail to communicate any risk information associated with its use and omit material facts.” And as a result, the reality star and her mother both posted updated endorsements (labeled as “#CorrectiveAd”), complete with acknowledgement of the pill’s side effects. The new post included a caption that read:
I guess you saw the attention my last #morningsickness post received. The FDA has told Duchesnay, Inc., that my last post about Diclegis (doxylamine succinate and pyridoxine HCl) was incomplete because it did not include any risk information or important limitations of use for Diclegis. A link to this information accompanied the post, but this didn’t meet FDA requirements. So, I’m re-posting and sharing this important information about Diclegis.
If we remove the FDA from the equation and focus primarily on the FTC and its Guidelines, we have a large number of instances of potential violations to examine.
There was Kendall and Kylie’s excursion to the Ugg store last November. According to the media coverage surrounding the trip – and there was a lot of it – the sisters were compensated. However, such an endorsement did not come by way of Kendall and Kylie starring in an Ugg ad campaign or a commercial or another traditional form of advertising. Instead, they were caught by the paparazzi in a seemingly candid manner while shopping at the Ugg store (and if reports are true, they were also paid by Starbucks to carry the company’s coffee cups during the shopping trip). They subsequently shared photos of themselves in Ugg products. This seems to be EXACTLY the sort of thing to which the FTC’s Guidelines apply. As indicated above: “The Guidelines make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ad campaigns.”
That was not the first (or last) time we have seen the famous family accept some form of compensation, whether it be a check, free goods, or “something of value” in exchange for endorsing a brand’s products. Older sister, Kim Kardashian, recently took to her Instagram and Snapchat accounts to promote JetSmarter. The photos were posted without a disclaimer that indicates sponsorship or endorsement. The same can be said for their promotion of Revolve, various waist training companies, Manuka Doctor products, Funboy pool floats, and Estee Lauder, among other brands and their products.
More recently, there are the family’s forays with Airbnb, which has reportedly taken to “gifting” the family with vacation rentals in exchange for promotion. According to the New York Post, “After Kardashian kin Kylie and Kendall Jenner recently got a gratis villa rental in Turks and Caicos, and posed for endless bikini shots to maximize the publicity for the incredible Caribbean crib, the short-term rental giant is now trying to negotiate a luxury penthouse for Kimye in NYC for a few months this fall.”
An Airbnb source told Page Six: “The plan would be for Kimye to live there for a few months for free, and Kim will post on social media about the apartment, like her sisters did from Turks and Caicos. Airbnb would pick up the tab for the rent.” Another classic non-traditional advertising arrangement sans proper disclosure, which values ranging somewhere in the millions.
Your move, FTC.