The newest group of potential outlaws in the fashion industry is not made up of tax evading Italian design houses. Instead, it is a slew of big-name brands and famous bloggers teaming up for promotional purposes that are consistently choosing to blatantly disregard the provisions of the Federal Trade Commission (“FTC”) Act.
Not up on the FTC Act? It is a federal law that aims to prevent unfair methods of competition, and misleading or deceptive acts or practices in the marketplace. In furtherance of this law, the FTC requires advertisers and endorsers to disclose material connections (think: payments or free products in exchange for representation of the brand, etc.) that they share so consumers can be made aware and make purchasing decisions accordingly. Thus, when a celebrity or influencer has been paid to endorse a product or service and they fail to disclose that fact, both the advertiser and endorser may be liable.
The most novel aspect of all of this is social media. Yet, the FTC has adapted to the development of social media advertising. In March 2013, for instance, the FTC updated its “DotCom Disclosures” Guidelines, in which it emphasizes that consumer protection laws apply to both traditional media and social media. And the FTC is prepared to go after those in violation. We saw this recently in the case that the FTC launched against Lord & Taylor in connection with its Design Lab campaign, in which it called upon (and paid) 50 influencers to post photos of themselves wearing a Lord & Taylor dress.
As such, in order to avoid violating the FTC Act, the FTC suggests using “#Ad”, “Ad:” or “Sponsored” in tweets or Instagram photos to indicate that a post or link within a post includes sponsored and/or compensated content, and by placing clear disclosures near the beginning of blog posts or videos, as well. (Note: "In collaboration with" and "In partnership with" language is still too ambiguous for the FTC and will not be deemed a sufficient disclosure! And merely disclosing on one post is not okay, either. The FTC has specifically stated that disclosures must be repeated). It really is that easy! And yet, brands and bloggers continue to disregard the law.
LEVI’S x THE MAN REPELLER x PHIL OH
Want an example? Here you go … Levi’s, “it” blogger Leandra Medine of the Man Repeller, and celebrated street style photographer, Phil Oh, teamed up this past weekend to celebrate the iconic denim brand’s 501 style of jeans on May 1st, of course.
According to a post on Levi’s website:
So, how will you 501® this 5/01? Levi’s® is setting up in New York City to capture the unique styles of 501® fans this Sunday, May 1, in collaboration with Man Repeller’s Leandra Medine and street fashion photographer Phil Oh. The event is an opportunity for our fans to get styled and photographed by some of the best in the business and celebrate the versatility of the 501® jean and the personal stories that they have associated with their own pairs.
From this little blurb, it is obvious – at least to the business/legal-minded among us – that Levi’s sponsored the event, and that both Medine and Oh were compensated for their participation. The fashion insiders reading know that professional bloggers/influencers earn a living by getting paid for attending events just like this. While this fact may be obvious to some of us, the FTC has been very clear in indicating that such insider knowledge does not allow bloggers and brands to avoid including “clear and conspicuous” disclosures in their promotional materials, whether they be blog articles or social media, etc. In short: if such posts are being used for commercial purposes (aka to advertise something, such as a product or an event) and the posts are likely to appear to the average consumer as anything other than an ad, they are required to include a “clear and conspicuous disclosure” alerting consumers to the fact that it is an advertisement.
So, what were some of the posts used to promote the Levi’s event? One tweet from the Man Repeller’s account reads as follows, “Leandra & @MrStreetPeeper are having a @LEVIS #501Day styling party at Chelsea Triangle in NYC from 11-6. COME NOW!!!”
Another from the Man Repeller reads: “Come to Chelsea Triangle in NYC today! We're here turning your rainy day blues into blue denim dreams with @levis for #501Day!”
Meanwhile, on Instagram, the Man Repeller is up to the same antics in promoting the event. One photo caption reads: “Behold, the power of @levis jeans: They even make inclement weather and wet poodle hair look cool. Thanks to everyone who came out yesterday to celebrate #501Day in the rain with @leandramedine and @mrstreetpeeper.”
Interestingly, none of the aforementioned posts include a disclosure, such as #Ad, to indicate to readers that Medine was compensated to attend and/or promote the event. The same can be said of Oh’s promotion, as well.
As indicated above, it is not enough that some might suspect that Medine and Oh were compensated to attend and/or promote the event. Because “a significant minority” of consumers (the FTC’s words, not mine) would likely be misled as to the nature of the posts, their failure to include disclosures is problematic, and their social media posts will most likely be deemed to fail to meet the FTC Act’s requirement of “clear and conspicuous disclosures.”
Note: Even if Medine and Oh were not specifically compensated to promote the 501 event (and instead, were just paid to attend), the FTC guidelines almost certainly still apply to their social media posts because they are serving as ambassadors of sorts for the brand – even if the capacity of the ambassadorship is limited to one event. If we consider social media influencers, they value lies almost entirely in their ability to reach large audience. This is why companies want to work with them.
So, given the influence of social media stars, such as Medine, nearly any contract they sign either explicitly or implicitly comes with the expectation that they will promote the event and/or draw a following to the event based on their influencer status. This is exactly why brands sign on to do projects with influencers. As such, I think it is very safe to say that anyone would be facing a very uphill battle of they wanted to show that the social media posts here fall outside of the scope of the FTC’s disclosure requirements.
This leaves Levi’s open to investigation and potential legal ramifications by the FTC for not ensuring that Medine and Oh made the required disclosures. And while the FTC is not in the business of going after influencers (yet), Medine and Oh, with their expansive influence and level of sophistication in terms of blogging and social media, could also be held accountable, as the FTC has the ability to charge influencers right along with brands.
THERE’S MORE TO IT THAN JEANS
In light of such potential violations, it is tempting to ask: Why does any of this matter? Well, aside from the fact that failure to abide by the FTC Act is a violation of federal law, and in most cases is done with willful disregard for the law (and not a mere mistake), such failure to disclose goes against the premise that consumers should be given adequate information regarding non-traditional advertisements.
By tapping influencers to promote its brand in mediums that are not traditional advertising ones, like TV commercials or ads in magazines, Levi’s certainly aimed to portray the image that such promotion was being done by independent and impartial parties. However, in reality they really were part of a Levi’s campaign to promote its event and of course, its products. This is misleading and this undermines the promotion of a fair marketplace for consumers and competing businesses, alike.
Stay tuned for our upcoming FTC violations series, which will shed light on similar violations and will also provide guidance on how to avoid running afoul of the FTC’s guidelines.