Social media influencers face legal risks, especially when it comes to the disclosure of endorsements.
Social media is an exciting business realm, and many influencers find massive success. But if you are an influencer or digital entrepreneur, don’t risk getting yourself in hot water with the Federal Trade Commission (FTC) or big corporations because you made an innocent mistake.
Here’s how influencers and other digital entrepreneurs can protect themselves and their businesses from serious legal ramifications.
Contact an experienced business law professional for help building your new business.
What is meant by “disclosure?”
If you work with brands to recommend or endorse products, you must comply with Federal Trade Commission (FTC) laws.
Influencers must make sure that they disclose their relationship to the brand. When you do this properly, you show your partners and followers that you operate in full transparency.
Why is this so? As an influencer, you are an advertiser, and you must follow the same rules as any other advertiser. For reviews, The FTC wants to make sure that viewers get a clear picture of products—an honest review. Sharing your brand relationships with followers helps build trust and credibility, so it’s not just about following the law—it’s good for your business, too.
For instance, a YouTube or TikTok influencer who is doing a product review video is obligated to share the full name of the brand and product in the video and should also support this in any text supporting the video, such as in the captions, description and or hashtags. Clearly state that you are doing a review, and make sure any information you provide about the product is not misleading.
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Disclosure and Intellectual Property
Trademark or copyright infringement is just one issue that can come up if you are accused of stealing another person, brand, or business’ intellectual property. This is essentially easy to do by accident in the world of social media, which is partly why the FTC has created rules around disclosure. Each social media platform has also tightened up its rules regarding intellectual property.
Suppose a social media influencer makes direct references to products or services offered by another company. In that case, this is known as branded content, and the influencer must obtain special permission to use another company’s name.
Influencers must practice disclosure at every turn and protect their intellectual property, including text, images, music, and anything to do with branding.
In an IP infringement case, a plaintiff can ask the court for monetary damages, which can be as high as $75,000.00 per infringement, or even a court order.
Read more on this topic: 5 Risks of Social Media in Business
Privacy Concerns
Without explicit permission to use another person’s name or image, an influencer could be sued for violation of privacy. This might happen if you monetize your channel and are looking for views. Using other people’s intellectual property
Influencers should not have images, names, written content, quotes, or memes from celebrities. If an influencer does have permission to use a photo, the photo also must be used in the context in which the person believed it would be used.
This all comes back to the “truth in advertising” premise: anything you share that may be deemed deceptive advertising could get you sued.
Read more: Can you be Sued for a Bad Review?
Disclosure Best Practices
If you’re a new influencer or manage social media accounts, the main thing to remember is to always mention the product or perk you are advertising. The other brand or business won’t necessarily prompt you to do this, nor will the social platform you are using. You must be sure to make choices that guarantee transparency on all levels.
Here are some tips:
- Don’t post your disclosure only on an about me or profile page
- Be as obvious as possible—for instance, a “shout out” at the front of a YouTube video is a clear signal that you intend to promote another brand
- Use terms like “advertisement,” “ad,” and “sponsored”
- Disclose any type of relationship you have with the brand – this includes financial, employment, personal, or family relationships
- The FTC laws can apply to you even if you are operating internationally or not a US citizen
- If you have a brand relationship with a business and then tag or like their products, I think that should also be disclosed.
- Share your disclosure at the top of blog posts and the start of videos
- Don’t post your disclosure anywhere that requires a person to click More.
- Posts can be misconstrued as endorsements—make sure this does not happen
- Last but not least, monitor conversations on all of your platforms to ensure that you address any potential problems immediately.
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Social Media Influencers Can Be Censored!
As an influencer, it’s 100% your responsibility to practice full disclosure at all times. Digital managers should also be aware of these practices and share them with staff and influencers.
Censorship can happen even by platforms themselves (as anyone who has ever landed in “Facebook jail” probably already knows.)
But trust me when I say that temporarily having your account suspended is much better than being sued by a major brand or chased by the FTC!
Call Us Anytime for Business Help
Social media influencers and managers can have a lot of fun in this career, but there are rules that you need to follow. Be sure to have a clear understanding of the law when it comes to posting, sharing, and endorsements.
If you need help, don’t hesitate to contact my team for assistance at 303-780-7333 or schedule an appointment online.
