The crackdown, which represents more aggressive enforcement of the FTC's rules, signals that the agency is trying to set a new precedent for holding both influencers and the industry accountable for social media marketing campaigns that fail to clearly show who is funding them. The move could also dramatically change the social media channels of popular influencers, who now often rely on vague hashtags like #ad or #sponsored rather than clearly naming the brand or company that pays them.
The action follows a month-long investigation by The Washington Post and The Examination, a nonprofit news outlet which focused on global health reporting that revealed how the food and beverage industry tapped celebrity nutritionists to promote industry-friendly messages in social media posts that often failed to reveal the sponsors' names.
The food industry pays “influencer” nutritionists to shape your eating habits
Samuel Levin, director of the FTC's Bureau of Consumer Protection, said “sophisticated groups” such as trade associations “need to be familiar” with the law. With today's action, Levin said the FTC is trying to set a precedent for disclosure that applies not only to the food and beverage industry, but to the entire influencer marketing sector.
Levin said he expects the announcement to “be heard loud and clear, not only by trade associations and influencers in this space, but also in other industries who may feel that influencers don't need to disclose these connections.”
The FTC's action reflects the agency's latest effort standards For social media marketing, a fast-growing sector that has been described as the Wild West of advertising. In 2023, more than $6 billion will be spent on influencer marketing in the United States, and another $7 billion will be spent in 2024. evaluations From Insider Intelligence.
“Influencers, especially nutritionists and other medical providers trusted by the public, should take these warnings seriously,” Levin said. “We are disappointed to see this type of influencer marketing.”
In September, both American Beverage and The Canadian Sugar Institute said food influencers they paid for social media campaigns adequately disclosed their relationships with trade groups through hashtags or other information listed in social media posts. At the time, several influencers who worked with the groups also said they followed disclosure rules by using hashtags or other notifications to followers that posts were sponsored.
Marion Nestle, professor emeritus of nutrition, food studies and public health at New York University, called the FTC's action “remarkable.”
“It's not good for soda companies to hire nutritionists to slap their products and not admit they're taking money from them,” he said. “This is a situation in which consumer protection is absolutely necessary, and the FTC is acting in the interests of consumers.”
The enforcement action is the first the FTC has taken against a major food and beverage industry group for social media marketing. The agency urged trade groups and food influencers to remove the posts or add proper disclosures, noting that future failures could result in fines of more than $50,000 for each violation.
An investigation and investigation found that American Beverage paid for dozens of nutrition-influenced videos that sought to undermine World Health Organization warnings about aspartame, the artificial sweetener in many diet sodas. The investigation also found that the Canadian Sugar Institute paid at least a dozen nutritionists for videos urging people to give in to sugary food cravings, mocking advice to cut back on sugar and urging parents to let their kids eat as much candy as they want.
In both cases, many influencers used phrases like #ad, #sponsored or “Paid Partnership” in the text accompanying their videos, but did not clearly identify which organizations paid for their videos.
The FTC said in its warning letters that these types of disclosures were “inadequate” because social media users could easily miss them. He said the videos themselves must contain “clear and prominent disclosures” of financial relationships. The agency also said that if product endorsements are seen or heard in social media videos, then financial disclosures must be made in the same manner.
The FTC also noted that some posts used phrases like #safetyofaspartame and others used abbreviated names of their sponsors like “AmeriBev” or “cdnsugarnutr,” which the agency said did not reveal that industry groups were behind the ads. Other posts do not name their sponsors at all.
In comments on several posts analyzed by The Post and The Examination, viewers expressed confusion and outrage at the lack of transparency from nutritionists they trust. The basic legal test that is outlined FTC Act It's whether the sponsorship will surprise consumers and affect their perception of the message's credibility – what the agency refers to as an “unexpected material connection.”
According to Levin, influencers and organizations receiving warning letters may have misled consumers by not fully explaining their affiliation.
“Consumers need to understand who is paying these marketers because that will give them a better understanding of how much credit is being given to the information they're providing,” Levin said.
The FTC said in its warning letters that influencers and trade groups had 15 days to respond to the agency and detail the actions they would take to address the concerns. The FTC also ordered trade groups and influencers to review all of their social media posts to ensure they sufficiently met disclosure standards.
The letters also state that “any violation of the FTC Act may result in legal action requiring a federal district court judgment or an administrative cease and desist order.”
While the FTC has used warning letters as an enforcement mechanism for decades, the inclusion of penalty notices in the letters signals a newer, stronger strategy for the agency to combat deceptive advertising practices, allowing it to collect civil penalties for subsequent violations.
“If companies or individuals ignore these warnings, we are fully prepared to follow up on these warnings with enforcement action,” Levin said. “We are fully prepared to take them to court.”
In 2017, the FTC sent more than 90 warning letters in response to posts by celebrities, including the Kardashian family, that the agency said failed. Disclosure Their connection to brands. In 2020, the FTC sent 10 warning letters to influencers, including rapper Cardi B, not to disclose paid social media ads to tea marketers. The tea company agreed to pay $1 million to settle allegations that it misled consumers and did not adequately disclose payments to social media influencers.
Bonnie Patten, executive director of Truth in Advertising, a nonprofit that fights deceptive marketing, said the FTC's latest action was “a win-win for consumers,” warning companies and influencers. “This is a big step and could affect social media influencers more broadly,” Patten said.
This report is part of a joint investigation by The Washington Post and The Examination, a new nonprofit newsroom specializing in global public health reporting. Sign up to receive an exam survey in your inbox.
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