The Truth About False Advertising

Advertisements, whether shown on social media, heard on the radio, or seen on the television, are regulated by federal law that requires truthfulness. The Federal Trade Commission (FTC) enforces so-called “truth-in-advertising” laws.  With the increasingly rapid development of new methods of advertising on social media, the rules and regulations enforced by the FTC are becoming more and more difficult to clearly define. Understanding how to effectively use advertising on social media without violating FTC regulations can be difficult without expert assistance.

How Does the FTC Regulate Ads on Different Platforms?

Regardless of where your ad appears, from Twitter to a roadside billboard, the FTC has the federal authority to review your advertisement for compliance with the truthfulness standard.  To help narrow down its focus, the FTC pays particular attention to advertisements that purport to address personal health or finances.  Even then, the sheer number of ads presents the government with a significant challenge.  With the ever-changing landscape of who can advertise on social media, the FTC and the Department of Justice are struggling to keep up with how and when to enforce federal truth-in-advertising laws.

Are Influencers Subject to Truth-in-Advertising Laws?

An influencer is a person who promotes a product on his or her widely-followed social media account. It is clear that over the last decade social media has experienced rapid growth. According to the August 2017 Global Digital Statshot, 3.028 billion people, or about 40% of the world’s population, actively uses social media. Clearly, all of the social networks are ripe for advertising and influencers have capitalized on just that.

One recent example is the massive amount of  false hype that propelled the Fyre Festival to be the massive cultural failure that it was. Kendall Jenner, Emily Ratajkowski, and Bella Hadid all posted incredible messages of support for the festival on Instagram and their followers were deceived into purchasing tickets to an event that was no more than a half-constructed campsite.

Obviously those people who purchased tickets were financially harmed by the false advertising of the festival. However, the FTC has yet to figure out how to navigate the problematic nature of influencers as advertisers.

What Challenges are There in Regulating Influencer Advertising?

The FTC has a broad jurisdiction; as noted before, every ad on the Internet, in print, and on TV is is regulated by the FTC, so keeping abreast of all of its responsibilities is difficult. Secondly, the statutes that give authority to the FTC also limit itss rule-making power.

Despite its full plate and limitations in changing laws, the FTC has taken some steps to address false advertising by influencers. For instance, Public Citizen, a nonprofit consumer advocacy organization, requested in-depth investigations into posts from more than 100 Instagram influencers and in 2017, the FTC initiated not only a robust educational campaign but also issued warning letters to many influencers, including Lindsay Lohan and Nicole “Snooki” Polizzi.

How can the Business Law Center Help Your Company Comply With Advertising Laws?

 Understanding federal FTC regulations about truthfulness in advertising can help your business operate without the threat of interference from the FTC. We can help to ensure you are complying with truth-in-advertising laws as well as help you expand your reach to social media platforms. Contact us today for more information.

Author: Seth Heyman
Seth D. Heyman is a California attorney with extensive experience in advertising and marketing law, corporate law, contracts, governmental regulations, international business, and Internet law. He has counseled numerous successful companies, both public and private, and was responsible for regulatory compliance, contract management, corporate governance, and HR best practices for multiple organizations in many diverse industries, including marketing, telecommunications, energy, and technology development. He offers insight and guidance on federal and state direct mail, TV, radio, telemarketing, and Internet marketing laws, as well as online promotions, Internet privacy, data protection regulations, and similar matters.
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