As companies rely more heavily on social media for the promotion of their products and services, it’s important to note that Federal Trade Commission (“FTC”) advertising rules are not just for celebrity endorsers, but rather for anyone with a “material connection” to a brand. Such a material connection—as described in the FTC’s recently updated guide “Disclosures 101 for Social Media Influencers,”—includes a family, personal, employment, or financial relationship (i.e., the brand owner providing free or discounted goods or services in return for a positive post).
In short, if there’s an unexpected connection between an endorser and the brand, it must be conspicuously disclosed. While a positive post from an owner about her own business would be expected (and therefore not require a disclosure), if that owner encourages her employees to make such posts, doing so without disclosures about the employment relationship would be prohibited. Likewise, because the promise of free and discounted goods could obviously lead to a positive bias, any third party—famous or not—must include a clear disclosure about the gift or discount, within the posted text and/or image itself.