It’s no secret that social media influencers work. By leveraging influencers, companies can grow their social media influence and reach, increase brand awareness, loyalty, and foster brand engagement. This can lead to thousands of new followers, increased traffic to our websites, and substantially more sales.
But what laws apply to influencers on social media?
Let’s find out.
Suppose you read a friend’s Facebook post about a new amazing product. She tells how wonderful it is and of all of its great features. Would that recommendation factor into your decision to buy the product? Probably.
Now suppose you come to learn that your friend works for the company that sells the product – or has been paid to tout the product. Would that change your perception of your friend’s glowing recommendation? You bet.
To help prevent misleading endorsements, the Federal Trade Commission (FTC) enforces various rules and advertising regulations over social media related endorsements and testimonials to ensure they are honest and not misleading.
First, the connection between the influencer and the company must be clearly disclosed. Consumers have a right to know when someone is being compensated for endorsing someone else’s product. This is the most common violation of social media influencer laws because influencers (and the brands that hire them) want to be seen as genuine and organic, as opposed to a sponsored post. But failing to clearly and conspicuously display this material connection is a clear violation of the law.
Second, an influencer’s endorsement must reflect their honest opinion and can’t be used to make a claim that the company couldn’t legally make. Companies and influencers alike commonly violate this regulation by telling an endorser what to say about its products.
So what happens if influencers fail to comply with influencer law? Both the company AND the influencers are subject to:
Worst of all, liability for violations of the FTC may extend to the company, marketing or advertising agency, or to the individual influencer.
To avoid liability, companies and advertising agencies need to develop influencer contracts, guidelines, and training to make sure everyone follows the rules. These risk management procedures will ensure that everyone understands how advertising laws and regulations apply to social media and how to prepare the proper disclosures that must be included for social media compliance.
Before your influencers post another tweet, you should conduct a social media risk assessment to determine what legal risks your company and influencers may be creating. Start by asking yourself the following questions:
Depending on your answers to these questions, you may need to act fast. Each new social media post, tweet, or like could lead you one step closer to a lawsuit, fine, or public relations nightmare. An experienced social media influencer lawyer can help.
