The Federal Trade Commission announced they found examining Instagram posts a group of social-media influencers who may be in violation of federal trade laws. This is a part of the FTC’s ongoing effort to unmask abstruse ads on social media. Posts that don’t disclose a working relationship between influencers and brands, or that include ambiguous language that is confusing to followers, are considered to be in violation.
A material connection could be a business or family relationship, monetary payment, or the gift of a free product. As an example from the past, in March 2016, they settled with Lord & Taylor after a 2015 investigation revealed 50 fashion influencers had been paid to post photos of a dress for sale at the storied department store. Now, it’s about the Instagram posts and several celebrities, athletes, and other influencers are in trouble. The FTC informed 90 recipients that when making endorsements on Instagram, they should disclose any material connection above the “more” button. FTC observed also some particular disclosures that are not sufficiently clear, pointing out that many consumers will not understand a disclosure like “#sp,” “Thanks [Brand],” or “#partner” in an Instagram post to mean that the post is sponsored. The civil penalty for disobeying provisions of the act caps at $40,000. The Endorsement Guides apply to both marketers and endorsers.