Before you dive into this blog, you must be thinking to yourself, “Influencers create social media content for are living. Are there actually laws out there that govern this?!” And the answer is yes. Yes, there are. And there are big penalties for not following the law. As an influencer attorney, I will teach you what the influencer marketing laws are and how to follow them.
There is a law called Truth in Advertising. The Truth in Advertising law is governed by the Federal Trade Commission (the “FTC”). The FTC is a department of the U.S. Government’s law that’s responsible for enforcing a law called Truth in Advertising. And in a nutshell, Truth in Advertising laws are designed to ensure people and companies advertise truthfully.
That makes senses. If I’m selling a product or a service, like, I don’t know, a white t-shirt, I want to make sure I’m accurate in how I advertise it and if I am misleading consumers about this t-shirt (maybe I say it’s 100% cotton made here in the USA, but it’s 80% cotton made in Sri Lanka), that’s not fair. And I, as a t-shirt owner that doesn’t follow the Truth in Advertising laws, can be fined by the government in order for me to comply with those laws in the future.
These Truth in Advertising laws are also extended to influencers and the companies that hire them. So let me give you an example of how this will be played out. Let’s say, I don’t know, that you were looking for an influencer lawyer. Where did I come up with that great analogy? And you search online for influencer lawyer or you type into Facebook, does anyone know a great influencer lawyer?
And all of a sudden you see a five-star review from someone that you know and trust, whether it’s a celebrity or a friend of yours. The review says something like, “The Social Media Law Firm is the best influencer law firm around. They’re easily approachable, they know the law, they keep their costs down, and help me stay protected. I’m giving them five stars.” Or maybe you scroll and you see that same person who makes a social media post and says, “Man, Ethan Wall at the Social Media Law Firm, he is awesome and he’s the best influencer lawyer that’s out there.” Is that five-star review or is that social media posts going to influence your decision as to whether to hire the Social Media Law Firm?
Hell yeah, it’s a great five-star review. But would it impact your decision about whether to hire the Social Media Law Firm if you knew that I paid that person to leave that review? Or if that person got free legal services in return for posting that online review? Of course, it’s going to impact how much weight you give that online review or endorsement. You’re going to want to know that upfront.
Now, look, you might still hire the Social Media Law Firm as your influencer lawyer because, let’s face it, we’re awesome, but at the end of the day, you would want to know when you see that social media post or when you see that online review that there was some kind of a connection between the person leaving the review or creating the social media post and the brand itself.
You’re going to want to know it’s a sponsored post, or that it’s an ad, or that somebody got paid for it, so that you could figure out how much weight to give that online review. And that’s exactly what the FTC requires in order for influencers and brands to comply with Truth in Advertising laws.
In order to comply with influencer law, you have to do two things: One, your social media posts or your online review must be truthful and personal to you. In other words, you can’t lie. That requirement should be easy to follow. Don’t let an influencer attorney catch you breaking this rule!
Two, you must clearly and conspicuously disclose the material connection between the endorser (meaning, the influencer) and the brands that hire them. Meaning, at the very top of your post you have to say this is an ad, or this as a sponsored post, or say, “I got 20 free tee shirts from The Social Media Law Firm and I’ve got to tell you these are the best tee shirts around,” meaning, you have to clearly and conspicuously disclose the fact this is a sponsored post.
If you, as an influencer, don’t follow the FTC requirements, you violate influencer laws. And if you as a brand don’t tell your influencers what they need to do, you could be held responsible. What could you be held responsible for? A fine up to $43,000 for every social media post or every review that doesn’t comply with the law.
$43,000 is the fine that the FTC can give you, and let’s say that you had 10 posts that didn’t comply, that’s $430,000. That’s crazy expensive. So, at the end of the day you need to make sure that you follow the laws so that you don’t get fined by the FTC.
Now that you know and understand the law, your next step is to learn what you as influencer, or the brands that hire them, need in order to comply with the law. You can read all about in our newest blog: How to Comply with Influencer Laws.
And if you’re not in the mood to read on, and instead need help preparing your influencer contracts or better understanding your legal needs, just reach out to us below. As an Influencer Law Firm, we’d love to help you.
