FTC: Not All Celebrity Influencers Are Paid By Brands

In March, the Federal Trade Commission told 90 celebrities and other social media influencers who endorsed brands online that they must disclose whether they had any material connections with those brands, including whether they received payment or were given free merchandise.

Last month, the agency followed up with warning letters, but those letters were only sent to 21 Instagram influencers.

Why the discrepancy? One reason may be that not all the original recipients were paid endorsers. At least, that's what the FTC associate director for advertising practices Mary Engle suggested this week at the annual conference of the watchdog National Advertising Division.

"Quite a number of these posts were organic, not sponsored," Engle said. In some cases, even the biggest celebrities apparently simply liked the products enough to tout the brands.

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Engle added that endorsements on social media can be ambiguous precisely because it's difficult to know whether the endorsers are paid.

The FTC in September issued updated guidance for online endorsers. Among other items, the new guidance emphasizes that disclosures should be unambiguous. The agency specifically says that endorsers' use of the phrase "thank you" doesn't adequately disclose that they received something in exchange for promoting the brand.

Engle reiterated that point on Monday. "A lot of times people will say thank you just because they're happy with the brand," she said.

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