Will FTC Crack Down On Instagram Ads?

For many years now, the Federal Trade Commission has told companies to present paid endorsements by bloggers, reviewers, Instagram users and other social media influencers as ads.

But the FTC recently went one step further: The agency said this week that it directly contacted around 90 Instagram influencers and reminded them to disclose that their posts are, in fact, paid promotions.

"Consumers should be able to notice the disclosure easily, and not have to look for it," Mary Engle, associate director division of advertising practices, wrote in one of the letters. She added that the disclosure should come above Instagram's "more" button.

The most significant aspect of the FTC's letter may be their timing: They mark the first major move regarding online transparency taken by the FTC since Donald Trump became president.

But whether the FTC's initiative signals a new crackdown is up for debate, according to Jeff Greenbaum, an advertising lawyer with Frankfurt Kurnit Klein & Selz.

"This sweep sends a mixed message," Greenbaum says. "On the one hand, it says this is still an issue we're really serious about."

But, he adds, the letters could also signal that the current FTC intends to focus more on education than prosecution -- especially given that acting FTC Chairmwoman Maureen Ohlhausen has said she wants the agency to concentrate on cases where consumers have suffered a concrete harm.

Greenbaum adds that in the past, the FTC has suggested it's more interested in targeting companies than individual influencers. "It's a lot more efficient to try to go after big companies than to go person by person," he says.

The FTC didn't name the recipients of the most recent letters. But some high profile celebrities have already been identified in connection with other cases.

For instance, last year the controversial PewDiePie -- who currently boasts almost 55 million YouTube subscribers -- was at the center of the FTC's prosecution of Warner Bros. That company allegedly paid PewDiePie and other influencers to tout "Shadow of Mordor" in advance of its September 2014 launch.

Also, in 2015 the Food and Drug Administration warned the drug company Duchesnay USA over an Instagram ad by celebrity Kim Kardashian. She initially touted the the morning-sickness drug Diclegis, but failed to disclose the drug's risks and contraindications. Her post may have also violated the FTC's endorsement guides, but that agency never publicly took action against the celebrity.

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