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Now Everyday Instagram Users Face Complaints Over Breaking FTC Ad Rules

By Published on .

Public Citizen wrote the FTC to enforce policies around marketing on Instagram, even for people with relatively small followings.
Public Citizen wrote the FTC to enforce policies around marketing on Instagram, even for people with relatively small followings. Credit: Instagram
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People with a mere dozens or hundreds of followers can promote products on Instagram just like they're a Kardashian. Unfortunately, sometimes these "micro-influencers" don't disclose the incentives they received to do so.

Just like a Kardashian.

Now consumer watchdogs have put everyday social media users in their crosshairs over undisclosed promotions.

Advocacy groups led by Public Citizen on Wednesday wrote U.S. regulators to express concern over Instagram posts that hawk products but don't wear labels such as "#ad" or "#paid." In September, Public Citizen submitted a similar complaint to the Federal Trade Commission, focusing on stars like the Kardashians, but the most recent letter included far less famous targets.

"The part about 'micro-influencers' is new to us," said Kristen Strader, Public Citizen's Commercial Alert campaign coordinator, in an e-mail. "We have recently discovered this piece and noticed that many posts from 'micro-influencers' do not include disclosures of any kind."

The letter called out companies that specialize in connecting brands with regular consumers on social media to get them to post on their behalf. Companies like Influenster and BzzAgent are middle-men in the process, hooking up the two sides.

Both companies were featured in the Instagram posts that Public Citizen accused of skirting disclosure rules. For its part, BzzAgent said it follows all rules, and its marketers are only required to acknowledge whether they got a product for free.

"BzzAgent's disclosure policy fully complies with FTC guidelines," a company spokesman said in an e-mail. "BzzAgent works with advertisers who pay us to distribute their products to members of our network, or BzzAgents, to try for free. FTC guidelines require us to make it clear to our agents to disclose they received the item for free."

BzzAgent said it facilitates unpaid product endorsements, meaning they mostly rely on gifts.

Ms. Strader said even gifts are a concern and a form of payment, and that her group found BzzAgent posts that were not properly labeled as such.

Influenster takes disclosure rules "very seriously," a spokeswoman for the company said in an e-mail.

"We are deeply committed to adhering to Federal Trade Commission rules and consistently communicating these rules to our members at every level of each campaign," the spokeswoman said. "According to our campaign rules and terms, failure to abide by these rules may result in suspension from Influenster. We have suspended members who did not abide by the rules in the past."

Instagram users with fewer than 1,000 followers have posted pictures of themselves with beauty products and only give a "thank you" to Influenster for sending the products.

"FTC's policy is that a disclosure must be used and it must be clear and easily understood by a consumer," Ms. Strader said. "Saying 'thanks' does not clearly disclose a paid relationship. I could, for example, really like a product that I paid for and say thanks to a company just for making it."

The FTC declined to comment for this article, saying it does not discuss complaints.

But government regulators have been gradually updating policies since the rise of social media changed marketing, enabling anyone to become a paid spokesperson for a brand.

Perhaps its biggest case involved Lord & Taylor paying 50 Instagram users to wear its products without disclosing the relationship. That case was settled this year with the retailer agreeing to be more open with its marketing.

This summer, regulators closed a similar case with Warner Bros. Home Entertainment over undisclosed "influencer" marketing on YouTube.

Public Citizen also said that celebrities were still in violation with many posts. The latest complaint featured 50 sample posts, including a few from Kris Jenner, Kourtney Kardashian and Scott Disick.

Kim Kardashian West and basically the whole clan have been criticized by watchdogs for promotional posts that don't clearly state they're an ad. They've sometimes had to go back and update posts to include "#ad."

Requests to reps for Kris Jenner and Kourtney Kardashian went unreturned.

Public Citizen said that the FTC has yet to respond to the group's request to enforce its disclosure policies.