The US Federal Trade Commission warns celebrities and influencers over Instagram posts that don't reveal they have been paid to promote products.
The US government has issued a stern warning to dozens of celebrities, so-called influencers and online personalities over what they put on their Instagram feeds.
They have been reminded that there are rules about being paid to promote products via the photo-sharing app.
The US Federal Trade Commission (FTC) said it had identified a group of social-media influencers who have been endorsing things without revealing that they were being paid to do that, thereby violating federal trade laws by misleading consumers.
— FTC (@FTC) April 19, 2017
Warning letters have been sent to more than 90 influencers and marketers including celebrities, athletes and models.
That comes after the US consumer rights advocacy group Public Citizen contacted the FTC and asked it to investigate.
Public Citizen accused a number of people of promoting products online without disclosing whether they had received money to do that.
Kim Kardashian, Rihanna and One Direction
On the list were 113 celebrities including reality TV star and businesswoman Kim Kardashian – who has more than 95 million Instagram followers – singer and actress Rihanna – with over 51 million followers – and the boyband One Direction but the FTC has not revealed who it has sent warning letters to.
In the letter sent out this week the FTC explained that it must be made clear in the initial three lines of an Instagram caption that it is sponsored as many users don’t look beyond the first part of the post.
The regulator said that it was not sufficient to put “#sp” – which is an abbreviation for sponsored – or “Thanks [Brand],” or “#partner” in an Instagram post.
The FTC has been increasingly focusing on internet advertising pushing them to follow the same laws as traditional advertisers. Under those rules it has to be disclosed if someone was “compensated to promote or review a product.”
With consumers now looking at the web or social media rather than reading magazines and watching television, companies are increasingly relying on so-called influencer marketing campaigns.
As a result they are paying or providing free goods to internet personalities with large followings in exchange for praise of their products online.
Companies rapped over native advertising
The warning letters are the latest move by the FTC. In July 2016 it reached a settlement with Warner Bros Home Entertainment after it failed to adequately disclose thousands of dollars in payments to popular internet stars for posting positive videos and reviews of the company’s game ‘Middle Earth: Shadow of Mordor’.
As part of that settlement, Warner Bros agreed to disclose payments to influencers in future campaigns or risk penalties or contempt charges.
The practice, known as native advertising, is only allowed by the FTC if the company distinguishes the advertising from objective content.
In March 2016 clothing store Lord & Taylor also settled with the FTC after paying for an article in the online fashion publication Nylon Magazine and for pictures of a dress to appear in Nylon’s Instagram feed. Neither was identified as advertising according to the FTC complaint.
Lord & Taylor also gave the dress to “50 select fashion influencers” and paid them $1,000 to $4,000 to post a photo on Instagram of them wearing the dress but without disclosing the payment, the complaint said.