Who: Instagram and the Federal Trade Commission (FTC)
Where: United States
When: April to June 2017
Law stated as at: 31 July 2017
Back in September 2016, US consumer rights group Public Citizen requested the FTC to investigate the relationship between 113 social media influences for not disclosing ties with brands. The FTC identified that these ties could be a business or family relationship, monetary payment or free products.
In April this year, the FTC sent warning letters to 90 social media influencers, with the reminder that they must “clearly and conspicuously disclose their relationship to brands” when paid to promote them on Instagram or other social media and that disclosures such as “#sp”, “Thanks [Brand]” or “#partner” in a post “are not sufficiently clear”. The FTC also flagged that Instagram only shows the first three lines of text, meaning that some disclosures were only visible when consumers expanded the text. The FTC advised social media influencers to include disclosures in the first three lines and not bury the disclosure in lots of hashtags.
Under the FTC endorsement guidelines, social media users must disclose when there is some kind of relationship, often monetary, between the endorsement-maker and an advertiser. This usually takes the form of a note like “#ad” or “#sponsored“. If an account endorses a product without making that clear, it could be in violation of the guidelines. The FTC does not require specific disclosure language, so long as it is clear and conspicuous. In the social media context, the FTC suggests that disclosures such as “sponsored,” “promotion,” “paid ad” or “#ad” would be effective.
Following this crackdown, Instagram launched a new tool in July, in the form of a new “paid partnership with” heading, to sponsored posts and stories. This is to allow social media influencers to identify the sponsors of their posts in a clear way that cannot be missed by consumers. Brands will be able to verify these headings, have their accounts tagged to the posts and, crucially, access additional information about audience engagement to the post through the tool.
Instagram stated that “Partnerships between community creators and businesses are an important part of the Instagram experience, and a healthy community should be open and consistent about paid partnerships“. The headings are currently being used from a pool of brands, with plans to make the tool more widely available soon.
Why this matters:
This update by Instagram should help brands and influencers to comply with their legal and regulatory obligations in the USA and also in other territories. Further, as the new tool is rolled out more widely, this is likely to lead to changes to other platforms and increase audience awareness of sponsored or paid-for content.
As the tool is not readily available to all brands yet, brands should ensure that their social media influencers use appropriate hashtags (such as “sponsored,” “promotion,” “paid ad” or “#ad“) in the first three lines of text on Instagram, in order to try to comply with legal/regulatory disclosure requirements.