This week, four groups – Public Citizen, Commercial Alert, the Campaign for a Commercial Free Childhood, and the Center for Digital Democracy – sent a joint letter to FTC encouraging the agency to “investigate and bring enforcement actions related to the practice of non-disclosed advertising through influencer user profiles on Instagram.”
As we reported last month, paid endorsements are a big issue for the FTC, and press reports had suggested that the agency might soon “crack down on paid celebrity posts.” But the crackdown is coming fast enough for some. The letter asks the FTC to move “promptly and aggressively” in order to stop a problem that “has reached epidemic proportions” and is putting children at risk. Dramatic claims.
The groups attempt to support these claims by reporting the results of an internal “investigation of the disclosure practices among movie stars, reality TV personalities, famous athletes, fitness gurus, fashion icons, and pop musicians.” According to the letter, the investigation revealed 113 influencers who endorsed a product without disclosure. Is a disclosure necessary? Public Citizen doesn’t seem to know for certain whether the celebrities were compensated, but presumes so, “based on industry norms.”
Despite not being certain, the groups present examples of over 100 Instagram posts that could be problematic. And they ask the FTC to “take aggressive enforcement action against companies and agencies that engage in the practice of non-disclosed ‘influencer’ endorsements.” (They even suggest two companies that should be at the top of the FTC’s list.) Although the groups believe that the FTC should continue to focus on the companies, they also urge the agency to take action against prominent influencers.
Regardless of whether the allegations in the letter are accurate, this development highlights the potential risks in this area. Not only do companies have to worry about the FTC itself – they also have to worry about being called out by “watchdog” groups.