FTC issues influencer marketing warnings over insufficient sponsorship disclosures

The Federal Trade Commission today announced it has issued warnings against two food and beverage trade groups and 12 health and nutrition influencers whose social media posts the groups sponsored, underscoring the FTC’s increasing crackdown on the influencer marketing industry. New: How the FTC’s warning may disrupt brand and creator deals The FTC sent warning letters to the American Beverage Association—whose members include Coca-Cola Co. and PepsiCo—and the Canadian Sugar Institute for their failure to adequately disclose their sponsorship of the influencers, and to each of the 12 influencers themselves. These warnings follow the FTC’s recent update to its endorsement guides in June—the first revision to its endorsement rules since 2009—to bolster its ongoing regulation of the influencer marketing industry and formalize the need for influencers to include “clear and conspicuous” disclosures of social media sponsorships. Check out the latest Ad Age events and award programs In the series of letters, the FTC outlines the influencers’ various violations of these revised endorsement guidelines in Instagram and TikTok videos promoting the safety of aspartame, an artificial sweetener, in partnership with the American Beverage Association, and the safety of consuming “sugar-containing products” for the Canadian Sugar Institute, respectively. The social media posts came as aspartame, which has long been scrutinized by health advocates, drew new attention. The World Health Organization’s International Agency for Research on Cancer (IARC) in mid-July classified aspartame as “possibly carcinogenic.” Also read: Aspartame faces health regulator scrutiny The 12 influencers did include some indications that their posts, most of which were made in July, were sponsored, including Instagram's “paid partnership” label or hashtags such as #ad or #sponsored—but they fell short of what the FTC wants: influencers including disclosures in videos themselves. Registered dietician and nutritionist Nichole Andrews, for example, used the paid partnership label in her post sponsored by the American Beverage Association but gave no other indication that the video was sponsored. And Stephanie Grasso, also a registered dietician, indicated her post was a paid partnership and included the hashtag #ad but didn’t disclose that the trade association was that sponsor. Several of the influencers, such as Keri Gans, have deleted the sponsored posts noted in the FTC’s letters. View this post on Instagram A post shared by Nichole Andrews, RDN | The Oncology Dietitian (@oncology.nutrition.rd) “We took proactive, prudent and meticulous steps to be transparent about our partnership with credible experts who spoke to the science behind the safety of aspartame and the FDA’s determination that it is safe,” the American Beverage Association said in a statement. “Importantly, no question has been raised about the substance of these posts. We will continue our ongoing commitment to disclose the relationship between dietitians and American Beverage and we appreciate the FTC’s guidance on how to best ensure transparency for consumers.” Federal regulators warned these creators—and the trade associations that sponsored them—that the paid partnership label or hashtags are insufficient disclosures of a “material connection” between the influencers and the marketers paying them are insufficient under the FTC’s updated endorsement guidelines. “It’s irresponsible for any trade group to hire influencers to tout its members’ products and fail to ensure that the influencers come clean about that relationship,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in the announcement. “That’s certainly true for health and safety claims about sugar and aspartame, especially when made by registered dieticians and others upon whom people rely for advice about what to eat and drink.” Several of the health influencers involved in the trade associations’ sponsorships are also registered dieticians. The FTC also took issue with the influencers’ referring to the associations by their abbreviated social media handles, @cndnsugarnutr and @ameribev, which consumers might not know refer to the two trade groups. Several of the influencers also added their hashtags disclosing the sponsored nature of their post at the end of a series of other hashtags in the video caption, but Instagram typically only shows the first few lines of a post’s caption and requires users to deliberately click an option to “read more” to view it in its entirety. Though regulators are letting off the American Beverage Association, the Canadian Sugar Institute and the 12 health influencers with a warning at this point, if they fail to adequately disclose their sponsorships in the future, they will be forced to pay up to $50,120 in civil penalties per violation of the FTC Act and its endorsement guidelines, per the FTC’s letters. Follow us on social media X Bluesky Instagram LinkedIn YouTube Although the FTC cracking down on influencer marketing isn’t new, the regulators’ latest round of warning letters are helpful in narrowing down the FTC’s fairly broad definition of what constitutes a “clear and conspicuous” sponsorship disclosure, said Linda Goldstein, a partner at law firm BakerHostetler. “The FTC has stated previously that [disclosures] should be in the videos themselves, and they reiterated that here,” she said. “What is worth noting, however—and they’ve been moving in this direction—is they’ve now stated emphatically that if the endorsement is made visually and in audio, then the disclosure has to be made both ways, as well.” Or, in other words, if an influencer is promoting a product or brand in a voiceover and simultaneously showing video footage of that product, they need to communicate that the brand is sponsoring their post in both the video and audio elements of the post. A simple “paid partnership” label or #sponsorship hashtag alone is no longer a sufficient disclosure in the eyes of the FTC. “‘Clear and conspicuous’ means that a disclosure is difficult to miss…and easily understandable by ordinary consumers,” the FTC wrote in its warning letters. “Consumers should be able to notice the disclosure easily, and not have to look for it."

FTC issues influencer marketing warnings over insufficient sponsorship disclosures

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