How can I tell whether someone's post is a covered endorsement by an influencer?

It is covered when the recommendation is made on behalf of a sponsoring advertiser, such as when a company pays the person or gives them something of value to mention its product. By contrast, a consumer who buys the product with their own money and has no connection to the manufacturer beyond being an ordinary purchaser is not making an endorsement.

What does a business have to do once it hires an influencer?

It should give the influencer guidance, monitor the influencer's posts, and act on non-compliance, because the advertiser can be liable even when the influencer is not. How much training and monitoring is enough depends, according to FTC staff, on the risk that deceptive practices by network participants could cause consumer harm.

Does an influencer need a disclosure in every post, even under a long-term contract?

Each post needs its own disclosure, because viewers might not have seen earlier ones. FTC staff gave the same advice in the Teami warning letters, telling influencers to put a disclosure in each and every social media post and not to assume that consumers will see and associate multiple posts.

Is tagging the brand, or thanking it, enough of a disclosure?

A brand tag is not a disclosure; tagging a brand is itself an endorsement. A simple thank-you does not do the job either, because it does not necessarily communicate that the endorser got something for free or was given something in exchange for an endorsement.

Where in the post does the disclosure have to appear?

It has to appear in the post itself, where it cannot be avoided, and not behind a “more” link. For a video, FTC staff tells influencers to put the disclosure in the video itself, not just in the text portion of the post.

Can an influencer rely on the platform's built-in disclosure tool?

Not by itself, because the ultimate responsibility rests with the influencer and the brand rather than the platform. An example in the Guides shows why: a built-in tool's disclosure appeared in small white text against a light image for five seconds, and the disclosure was found easy to miss and so not clear and conspicuous.

Can I reuse a disclosure that works for adults in influencer ads aimed at children?

A disclosure that works with adults might not work with younger people, and the Guides single out child-directed endorsements for special concern.

Social ProofTerm

Influencer

Berkeley Robinson, Managing Attorney at Robinson Law Firm PLLC

Author

Berkeley Robinson, Esq.

Managing Attorney, Robinson Law Firm PLLC

Berkeley has served as the go-to counsel for many scaling businesses in a transactional and litigation management capacity. Before becoming an attorney, Berkeley grew sales teams, ran online marketing campaigns, and did everything else an entrepreneur does—and still does today as the founder of two online businesses.

Definition

The government has not defined “Influencer” in a statute or regulation.

Based on our data, “Influencer” means an individual or organization that provides an endorsement. Source: In re Warner Bros. Home Entertainment Inc., Decision and Order (FTC) In the orders that use the word, the influencer is an endorser who is paid to create or disseminate an online endorsement as part of an advertiser's campaign. Source: In re Machinima, Inc., Decision and Order (FTC issued Mar. 16, 2016)

Key legal rules

The duties below come from the endorsement guides, and the orders that follow show what particular companies were required to do, which can be applied to your own marketing:

Tags in social media posts can be endorsements, so an influencer's mention of a brand can trigger the duties below. Source: 16 C.F.R. § 255.0
When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement, and that connection is not reasonably expected by the audience, such connection must be disclosed clearly and conspicuously. Source: 16 C.F.R. § 255.5
Material connections can include monetary payment or the provision of free or discounted products (including products unrelated to the endorsed product) to an endorser, regardless of whether the advertiser requires an endorsement in return. Source: 16 C.F.R. § 255.5
A disclosure of a material connection does not require the complete details of the connection, but it must clearly communicate the nature of the connection sufficiently for consumers to evaluate its significance. Source: 16 C.F.R. § 255.5
In any communication using an interactive electronic medium, such as social media or the internet, the disclosure should be unavoidable. Source: 16 C.F.R. § 255.0
Endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser, and an endorsement may not convey any express or implied representation that would be deceptive if made directly by the advertiser. Source: 16 C.F.R. § 255.1
When the advertisement represents that the endorser uses the endorsed product, the endorser must have been a bona fide user of it at the time the endorsement was given. Source: 16 C.F.R. § 255.1
Advertisers are subject to liability for misleading or unsubstantiated statements made through endorsements or for failing to disclose unexpected material connections between themselves and their endorsers, and good faith and effective guidance, monitoring, and remedial action are not a safe harbor. Source: 16 C.F.R. § 255.1
Endorsers may also be liable for failing to disclose unexpected material connections between themselves and an advertiser, such as when an endorser creates and disseminates endorsements without such disclosures. Source: 16 C.F.R. § 255.1
Advertising agencies, public relations firms, and similar intermediaries may be liable for endorsements that fail to disclose unexpected material connections, whether by disseminating advertisements without necessary disclosures or by hiring and directing endorsers who fail to make necessary disclosures. Source: 16 C.F.R. § 255.1
Endorsements in advertisements addressed to children may be of special concern because of the character of the audience. Source: 16 C.F.R. § 255.6

For the sake of space, this page lists only the primary rules related to this term that most businesses should follow. More may apply to your situation, and your unique facts affect how they apply.

Send us a message through our online form to talk through yours.

Send a message

Response within 24 hours

Why these rules exist

A person who sees a glowing recommendation cannot tell from the post alone whether the speaker was paid or works for the company, and that is exactly the information needed to weigh the recommendation. Source: FTC Staff, FTC's Endorsement Guides: What People Are Asking (June 2023) For that reason the disclosure duty attaches to the connection the audience would not expect, and a connection needs to be disclosed when a significant minority of the audience does not understand or expect it. Source: 16 C.F.R. § 255.5

The responsibility also reaches the company that engaged the influencer, because otherwise a campaign could be run through agencies and contractors and no one would answer for a missing disclosure. Source: 16 C.F.R. § 255.1 Handing the promotional program to an outside firm does not change that. Source: FTC, The FTC's Endorsement Guides: What People Are Asking (June 2023)

Enforcement examples

In re Machinima, Inc. (YouTube influencer videos for Xbox One)

In re Machinima, Inc., Decision and Order (issued March 16, 2016); Closing Letter to Yaron Dori, counsel for Microsoft Corporation, and Amy R. Mudge, counsel for Starcom Media Vest Group (Aug. 26, 2015)

Machinima, a YouTube network, paid video bloggers it called influencers significant amounts of money to produce and upload Xbox One gameplay videos. Source: Closing Letter to Yaron Dori, counsel for Microsoft Corporation, and Amy R. Mudge, counsel for Starcom Media Vest Group (FTC File No. 142-3090, Aug. 26, 2015) The videos sat on the influencers' own channels, where they appeared independently produced, and Machinima did not require any disclosure of the payment; many, if not most, of the influencers made none. Source: Closing Letter to Yaron Dori, counsel for Microsoft Corporation, and Amy R. Mudge, counsel for Starcom Media Vest Group (FTC File No. 142-3090, Aug. 26, 2015)

Outcome. The Machinima order required the company to give each influencer a statement of the duty to disclose a material connection to the advertiser, and to obtain a signed acknowledgment. Source: In re Machinima, Inc., Decision and Order (FTC issued Mar. 16, 2016) The order also required Machinima to review an online video endorsement before it paid for it. Source: In re Machinima, Inc., Decision and Order (FTC issued Mar. 16, 2016) When a video lacked the disclosure, Machinima had to tell the influencer, withhold payment, and disqualify the influencer from future campaigns until the video contained the disclosure. Source: In re Machinima, Inc., Decision and Order (FTC issued Mar. 16, 2016) The order terminates on March 16, 2036, or twenty years from the most recent date a complaint is filed in federal court alleging a violation of the order, whichever comes later. Source: In re Machinima, Inc., Decision and Order (FTC issued Mar. 16, 2016) In a separate closing letter, FTC staff said that Microsoft, as the advertiser, and Starcom, as its agency, bore responsibility for the influencers' failure to disclose. Source: Closing Letter to Yaron Dori, counsel for Microsoft Corporation, and Amy R. Mudge, counsel for Starcom Media Vest Group (FTC File No. 142-3090, Aug. 26, 2015) Staff nonetheless decided not to recommend enforcement action against them at that time, in part because the failures appeared to be isolated incidents that occurred despite policies and procedures designed to prevent them. Source: Closing Letter to Yaron Dori, counsel for Microsoft Corporation, and Amy R. Mudge, counsel for Starcom Media Vest Group (FTC File No. 142-3090, Aug. 26, 2015)

In re CSGOLotto, Inc., Trevor Martin, and Thomas Cassell (skin-gambling website promoted by YouTube influencers)

CSGOLotto, Trevor Martin, and Thomas Cassell: Complaint - September 7, 2017

Martin and Cassell operated YouTube channels focused primarily on online gaming, and each was a 42.5% owner of CSGOLotto, Inc. Source: In re CSGOLotto, Inc., Complaint (FTC) According to the complaint, Martin did not disclose in his promotional videos or their descriptions that he was an officer and owner of the company or that he was gambling with free skins the company supplied. Source: In re CSGOLotto, Inc., Complaint (FTC) Cassell's description boxes did say the video was sponsored, but only “below the fold,” where a viewer would have to click and perhaps scroll to see it. Source: In re CSGOLotto, Inc., Complaint (FTC Sept. 7, 2017) Beyond the two owners, the company also ran an influencer program, with payments to other influencers ranging from $2,500 to $55,000. Source: In re CSGOLotto, Inc., Complaint (FTC)

Outcome. The complaint alleged that the respondents failed to disclose, or failed to disclose adequately, that Martin and Cassell were owners and officers of the company operating CSGO Lotto. Source: In re CSGOLotto, Inc., Complaint (FTC) It separately alleged a failure to disclose that the other influencers received compensation, including monetary payment, to promote the service. Source: In re CSGOLotto, Inc., Complaint (FTC)

FTC v. Teami, LLC (detox tea and skincare promoted by paid Instagram influencers)

Teami, LLC: Complaint for Permanent Injunction and Other Equitable Relief, March 6, 2020; Teami LLC: Warning Letters to Instagram Influencers to Prominently Disclose Paid Endorsements (Mar. 5, 2020)

The complaint alleged that Teami paid celebrities, including Kylie Jenner and Demi Lovato, and other influencers to promote its products on Instagram and other social media. Source: Teami, LLC: Complaint for Permanent Injunction and Other Equitable Relief (Mar. 6, 2020) Teami had a social media policy and often required approval of posts, yet the complaint alleged that numerous paid posts did not comply with that policy. Source: Teami, LLC: Complaint for Permanent Injunction and Other Equitable Relief (Mar. 6, 2020) The effect on followers was that, in most cases, someone scrolling through the feed would not have seen the text disclosing the connection without clicking to see “more.” Source: Teami, LLC: Complaint for Permanent Injunction and Other Equitable Relief (Mar. 6, 2020)

Outcome. FTC staff wrote to individual influencers Teami had paid, telling them that a “#teamipartner” hashtag that appeared only after clicking “more” was not clear and conspicuous. Source: Teami LLC: Warning Letters to Instagram Influencers to Prominently Disclose Paid Endorsements (Mar. 5, 2020) The letters added that a video needs the disclosure in the video itself, not just in the text of the post. Source: Teami LLC: Warning Letters to Instagram Influencers to Prominently Disclose Paid Endorsements (Mar. 5, 2020) They also warned that individual influencers who fail to make adequate disclosures are subject to legal enforcement action by the FTC. Source: Teami LLC: Warning Letters to Instagram Influencers to Prominently Disclose Paid Endorsements (Mar. 5, 2020)

In re Lord & Taylor, LLC (private-label dress promoted by paid Instagram influencers)

Complaint; Decision and Order (Lord & Taylor, LLC)

Lord & Taylor gifted a dress to 50 fashion influencers and paid each between $1,000 and $4,000 to post one Instagram photo of themselves wearing it during a specified weekend. Source: Complaint, In re Lord & Taylor, LLC (FTC 2016) The contracts spelled out how the company was to be mentioned in each post but did not require the influencers to disclose that they had been compensated. Source: Complaint, In re Lord & Taylor, LLC (FTC 2016) The company pre-approved each post, yet none of the posts it reviewed disclosed the free dress, the payment, or the advertising campaign. Source: Complaint, In re Lord & Taylor, LLC (FTC 2016)

Outcome. The order required Lord & Taylor to give each endorser with a material connection a clear statement of the duty to disclose, including in Instagram or blog posts, and to obtain a signed and dated acknowledgment agreeing to comply. Source: In re Lord & Taylor, LLC, Decision and Order (FTC) It also required a system to monitor and review the disclosures of those endorsers. Source: In re Lord & Taylor, LLC, Decision and Order (FTC) Under the order's definition of “close proximity,” a disclosure made through a hyperlink or pop-up did not count. Source: In re Lord & Taylor, LLC, Decision and Order (FTC)

In re Warner Bros. Home Entertainment Inc. (video game promoted by paid YouTube influencers)

Warner Bros Complaint; Decision and Order (Warner Bros. Home Entertainment Inc.)

The complaint alleged that Warner Bros., through an ad agency, hired video game enthusiasts on YouTube to post positive videos promoting its game. Source: FTC, In re Warner Bros. Home Entertainment Inc., File No. 152 3034, Analysis of Proposed Consent Order to Aid Public Comment Warner Bros. required the videos to promote a positive sentiment about the game and not to disclose any bugs or glitches. Source: FTC, In re Warner Bros. Home Entertainment Inc., File No. 152 3034, Analysis of Proposed Consent Order to Aid Public Comment Most influencers placed their sponsorship disclosures only “below the fold” in the description box, and on at least two occasions an influencer disclosed early access to the game without disclosing the payment. Source: In re Warner Bros. Home Entertainment Inc., Complaint (FTC)

Outcome. The order barred Warner Bros. from misrepresenting, in any influencer campaign, that an influencer is an independent user or ordinary consumer of the product. Source: In re Warner Bros. Home Entertainment Inc., Decision and Order (FTC) It also required Warner Bros. to clearly and conspicuously disclose a material connection between the influencer and the company, if one exists. Source: In re Warner Bros. Home Entertainment Inc., Decision and Order (FTC) To make those duties work, the order required a signed and dated acknowledgment from each influencer. Source: In re Warner Bros. Home Entertainment Inc., Decision and Order (FTC) It also required a monitoring system for influencers' posts and immediate termination and cessation of payment for influencers who misrepresented their independence or failed to disclose. Source: In re Warner Bros. Home Entertainment Inc., Decision and Order (FTC) Before terminating, however, Warner Bros. could give an influencer notice and a chance to cure if it reasonably concluded the failure to disclose was inadvertent. Source: In re Warner Bros. Home Entertainment Inc., Decision and Order (FTC)

Exposure

The Endorsement Guides themselves do not carry penalties, but practices inconsistent with them can lead to an enforcement action under Section 5 of the FTC Act. Source: FTC, The FTC's Endorsement Guides: What People Are Asking (June 2023) The first violation does not by itself bring a fine: in the Warner Bros. matter the Commission told a commenter that it was not authorized to collect fines or penalties for the initial Section 5 violations its complaint alleged. Source: FTC, Letter to Jerry Addison, In re Warner Bros. Home Entertainment Inc., File No. 152-3034, Docket No. C-4595 (Nov. 17, 2016) Penalties attach to violating an order. The Commission told commenters that a violation of the proposed Warner Bros. order would make the company liable for civil penalties of up to $40,000 per violation. Source: FTC, Letter to Jerry Addison, In re Warner Bros. Home Entertainment Inc., File No. 152-3034, Docket No. C-4595 (Nov. 17, 2016) For Machinima, it said a violation of the proposed order may carry civil penalties of up to $16,000 per violation, or up to $16,000 per day for continuing violations. Source: FTC, Letter to Devon Belgard, In re Machinima, Inc. (letters to commenters)

A company that has received a Notice of Penalty Offenses faces more. If the defendants received a Notice of Penalty Offenses regarding endorsements and then engaged in certain deceptive or unfair endorsement practices, the FTC could seek substantial civil penalties. Source: FTC, The FTC's Endorsement Guides: What People Are Asking (June 2023) Enforcement usually targets the advertiser, its ad agency, and its public relations firm, but action against an individual endorser might be appropriate, for example if the endorser hasn't made required disclosures despite warnings. Source: FTC, The FTC's Endorsement Guides: What People Are Asking (June 2023) A working compliance program can change the outcome: in the Microsoft and Starcom matter, FTC staff declined to recommend enforcement partly because the failures appeared to be isolated incidents that occurred despite policies and procedures designed to prevent them. Source: Closing Letter to Yaron Dori, counsel for Microsoft Corporation, and Amy R. Mudge, counsel for Starcom Media Vest Group (FTC File No. 142-3090, Aug. 26, 2015)

FAQs

1.Decision and Order. In re Warner Bros. Home Entertainment Inc., Decision and Order (FTC)See also Decision and Order. In re Warner Bros. Home Entertainment Inc., Decision and Order (FTC)
2.160317machinimado. In re Machinima, Inc., Decision and Order (FTC issued Mar. 16, 2016)
3.255.0. 16 C.F.R. § 255.0