FOR SOCIAL MEDIA INFLUENCERS & CONTENT CREATORS
Social media influencers and content creators have a powerful connection with their followers. Consumers frequently feel a personal relationship with the influencer they like, subscribe to, or follow. Marketers tap into this relationship and attempt to use it as a proxy to sell their own products and services. This has become a major part of businesses’ advertising strategies, as brands are set to spend $15 billion a year on influencer marketing by 2022.
As with any new medium in the digital world, this type of advertising created a murky legal landscape. Now, however, regulators have established legal requirements for disclosing relationships with brands and are enforcing those rules. If you are aspiring to become an influencer or are considering working with one to build your business, it is important to be aware of the new rules for the digital world, which include Federal Trade Commission (FTC) requirements, the Childrens’ Online Privacy Protection Act (COPPA), and special rules for “kidfluencers. “
THE WILD WEST NO LONGER: FTC REACHES OUT TO INFLUENCERS
The Federal Trade Commission is the United States government body that watches the marketplace for unfair and deceptive practices, including on social media. In 2017, the FTC wrote 90 letters warning top influencers to make sure they disclose their relationships with advertisers. These letters indicated that “influencers should clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media.”
Today, individuals looking to become influencers or businesses looking to partner with them should look closely at the FTC guidelines in order to avoid legal trouble.
FTC GUIDELINES: DISCLOSURES 101
To help influencers and content creators follow the regulations, the FTC released Disclosures 101 for Social Media Influencers, which focuses on the importance of disclosing when an influencer has a “material connection” with a brand or advertiser. A material connection could be a financial, employment, personal, or family relationship with a brand, and includes free or discounted products. If a material connection exists, the influencer should disclose it. It’s that simple.
Best practices for disclosures include:
- Use simple and clear language in posts or videos that states there is a material connection.
- If making an endorsement of a product in a video, the disclosure should be in the video itself and not just in the video’s description on the platform.
- Disclosures should be at the top of a longer post or article (before a user has to scroll down or tap “more”). Remember that smart phones sometimes show less than a computer screen, so disclosures must take mobile into account. Disclosures in an “About Me” section don’t count; it needs to be with the posting.
- Avoid placing disclosure hashtags where they can be missed by consumers. For example, if an #ad hashtag is at the very end of a long post or in the middle of a long string of text, the consumer might miss it.
- If making an endorsement in a livestream, repeat the disclosure a few times, in case a viewer has started watching later in the stream.
In its endorsement and testimonial guidelines the FTC notably underscores that it is better to err on the side of disclosing a relationship with a brand. And critically, influencers should avoid making false or unsubstantiated statements in their posts to avoid legal action against them or their marketers. Therefore, if you’re endorsing a product, you should not make any claims that can’t be backed up by proof, such as scientific evidence that a product can treat a particular health condition.
So, if you’re a content creator who’s being paid to promote a new skin clearing product on your preferred platform, make sure you clearly disclose your relationship with your advertiser and avoid making statements that cannot be substantiated with facts and science.
ARMY OF BOTS: LEGAL ACTIONS REGARDING FAKE FOLLOWERS
Disclosing a material connection isn’t the only legal issue businesses and new influencers should look out for. If you are an influencer and are considering ways to build your impact, don’t be tempted to artificially inflate your followers using “bots” (a computer program that simulates human behavior) or other techniques. Some studies suggest that around 20% of followers for mid-tier influencers are artificial bots; this practice is illegal and could be subject to government investigation. The FTC has made clear, for example, that:
If “likes” are from non-existent people or people who have no experience using the product or service, they are clearly deceptive, and both the purchaser and the seller of the fake “likes” could face enforcement action.
Recently, the FTC took legal action against a company that was selling fake followers and “likes” that influencers could add to their accounts. The owner of a company called Devumi was fined $2.5 million for selling fake indicators of influence on LinkedIn, Twitter, YouTube, Pinterest, Vine, and SoundCloud. And it’s not just the federal government that’s looking into this conduct; the New York State Attorney General is also on the lookout for companies selling fake followers on social media platforms.
BEWARE OF LEGAL ISSUES RELATED TO KIDFLUENCERS
In the world of influencers and content creators, “kidfluencers” are content creators who are children. Oftentimes, they create videos that share moments of playing, posing, or unboxing a toy. Brands have tried to reach the millions of followers popular kidfluencers have. In some cases, advertisers will pay $10,000 for an Instagram post of a popular kidfluencer or $45,000 for a video on YouTube. Because the kidfluencer space involves making money from children, it has attracted the attention of lawmakers and regulators.
If your child happens to be making money as a kidfluencer, be aware of the FTC disclosure requirements discussed above. Also, consider talking to an attorney about complying with your state’s child labor laws, which may require putting earnings in a trust. Additionally, kidfluencer accounts should be managed by a parent or a guardian. Failure to do so may be a violation of a social media company’s terms of service and could lead to blocking or banning an account.
COMPLYING WITH COPPA
The Children’s Online Privacy Protection Act, also known as COPPA, is a major law in the United States that covers when you’re allowed to advertise to children online. Previously, it was generally understood that the burden usually falls on the social media company hosting kidfluencer content to comply with this law. However, this might be changing.
Recently YouTube modified its practices in the kidfluencer space as the result of a recent FTC settlement covering COPPA. Notably, the settlement also spoke to the obligations of the content creators themselves: content creators who make videos for kids have to clearly label their content as child-directed or they may face liability. This has caused some content creators to alter their practices; some have mixed up their content on YouTube to focus on teen audiences, and others have moved their videos to their own apps and websites. Therefore, if you’re thinking of having your child enter the kidfluencer space, consider brushing up with your attorney about your possible obligations under COPPA.
DON’T BE DECEPTIVE: THE DIGITAL WORLD DEPENDS ON TRUST
We all benefit from the interconnected digital world, including the new opportunities for commerce provided by the world of influencers and content creators. If you are considering becoming an influencer or are working with one to promote your business, be sure to follow the rules in order to preserve trust for both businesses and consumers.
The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this article without seeking legal or other professional advice.
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