FTC’s First Action Against a Social Media ‘Influencer’ Might Not Be Last
The National Law Journal
This week, the FTC brought its first enforcement action against an influencer—and took the opportunity to issue new guidance for disclosing the business relationships behind promotional social media posts.
The FTC targeted Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell, co-owners of the online gambling service CSGO Lotto, who allegedly endorsed the company without disclosing their joint ownership of it. According to the FTC, Martin and Cassell enjoy wide followings in the online gaming community and paid other well-known influencers thousands of dollars to promote their online gambling service on YouTube, Twitter and Facebook without requiring them to disclose the business deals behind the posts.
Cassell and Martin resolved the allegations by agreeing to clearly and conspicuously disclose such business interests in future posts.
“Consumers need to know when social media influencers are being paid or have any other material connection to the brands endorsed in their posts,” FTC Acting Chairman Maureen Ohlhausen said in a prepared statement. “This action, the FTC’s first against individual influencers, should send a message that such connections must be clearly disclosed so consumers can make informed purchasing decisions.”
In addition to announcing the settlement, the FTC updated its guidance for disclosing business relationships behind promotional social media posts. The new guidance advised that influencers using Snapchat or Instagram Stories superimpose words over the images that disclose their business relationships—whether it be a payment or a free sample of a product. The guidance also acknowledges a new built-in feature Instagram introduced to make it easier for celebrities and influencers to more clearly disclose that a post is sponsored. But the FTC said that tool is “not necessarily” an adequate disclosure.