FTC to Instagram stars: Disclose paid endorsement posts

By Eric DuVall  |  April 20, 2017 at 2:34 PM
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April 20 (UPI) -- The Federal Trade Commission sent letters to more than 90 Instagram "influencers" -- athletes, entertainers and other celebrities -- asking them to comply with established disclosure standards when endorsing products on the social media site.

There is no formal penalty for failing to comply with the FTC's request, copies of which were also sent to the companies the high-profile users endorsed. The government noted that in many instances, celebrity product endorsements often obscure or leave out the fact the person posting received compensation for doing so, whether it's a formal cash payment or free samples of the product.

The posts go out to millions of fans and do not carry the same labels as paid posts made through Instagram directly, which are labeled as sponsored content by the company.

The FTC defines a "material connection" between endorser and product as "a connection that might affect the weight or credibility that consumers give the endorsement -- like a business or family relationship, a payment or the gift of a free product."

The FTC said some celebrity endorsers employ hashtags with vague meanings such as "#partner" or "#sp" (short for sponsored), that are prone to misunderstanding. Others make no distinction between "material connections" and products they simply enjoy, known as organic mentions.

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