FTC Warns Trade Associations and Influencers of Not-So-Sweet Penalties for Failing to Sufficiently Disclose Sponsorship of Aspartame and Sugar Products
Social media and influencer marketing is now critical for business promotion. However, organizations and influencers that misrepresent, fail to disclose, or include inadequate disclosures regarding their sponsorship or connection to social media content risk attention from the FTC and civil penalties of up to $50,120 per violation. Following revision of its Endorsement Guides in June, the FTC has continued to focus on influencer marketing, including recently in the area of health and safety.
Last month the FTC sent warning letters to two trade associations, the American Beverage Association (“AmeriBev”) and The Canadian Sugar Institute, as well as 12 of the trade associations’ influencers, which included registered dieticians and health influencers. The FTC warned that the parties had inadequately disclosed sponsored Instagram and TikTok posts promoting the safety of the artificial sweetener aspartame and the consumption of sugar-containing products.
FTC guidelines require social media endorsements to make it clear if there is a “material connection” between the content and a brand, i.e. "a connection that might affect the weight or credibility that consumers give the endorsement,” including family or business relationships, monetary payment, or free products. A disclosure of such connection may include the words “paid partnership” or “sponsored” on the content. The disclosures must be placed in a manner that is conspicuous and that is easily understandable. If an endorsement is made via an image or post on platforms like Instagram, the disclosure must be superimposed over the image. If the endorsement is made in a video, the disclosure should be in the video’s visual or audible content, depending on where the endorsement is made, or both if the endorsement is made both visually and audibly. The disclosure may not just be in the description of the video. These disclosures play an important part in allowing consumers to weigh the value of the endorsements.
The FTC’s letters to the trade groups and influencers expressed concerns regarding the sufficiency or lack of disclosures in the influencers’ posts promoting the safety of aspartame or the consumption of sugar-containing products. The FTC letters noted:
- that some posts had no disclosures;
- that some videos lacked a disclosure in the video itself;
- that “#sponsored” and #ad” were often too far down in the text description of certain posts, making them easy to miss, especially if viewers had to click the description to view the disclosure or if the description was in small, poorly contrasting text;
- that use of the built-in “Paid sponsorship” disclosure tool alone is not sufficiently conspicuous;
- that use of “#client” was ambiguous and inadequate; and
- that some posts failed to identify the sponsor, or only identified the sponsor as, e.g., “ameribev”, “safetyofaspartame.com”, or “cndnsugarnutr,” when consumers may not understand those references or terms.
In addition, in certain letters the FTC noted specific Instagram and TikTok posts in which influencers posted dietary advice disparaging the opinions of the International Agency for Research on Cancer and the World Health Organization regarding the safety of aspartame. The FTC letters reminded the recipients of the civil penalties, and requested that the recipients notify the FTC within 15 days of the specific actions taken or that will be taken to address the FTC’s concerns.
The FTC’s letters provide a useful example for all brands on when and what endorsement disclosures are required by the FTC’s updated Endorsement Guides in social media posts and videos. They also serve as a warning, particularly to companies offering products with potential health implications, to ensure that sponsored content is in compliance with the FTC’s Endorsement Guides.
Co-Author: Talisha Faruk(CA Bar Admission Pending)
Editor: Catherine Holland
