The Federal Trade Commission or FTC is an agency that helps implement and enforce antitrust laws across a range of industries and platforms. In the media, the FTC helps keep things clean when it comes to reviewing content and making sure that journalists and other media platforms don’t practice unlawful business with anticompetitive and deceptive content. In short, the FTC makes sure that what you share online is fair and if you’re being paid to say something nice, you disclose this information.
I sign FTC agreements weekly for the site. While the agency doesn’t have any jurisdiction in South Africa directly, any US agreement I make with a brand, developer, publisher or company is governed by some sort of FTC agreement. So I would then enter an FTC agreement to disclose any paid or sponsored information about the content. For example, the reason why we put “This review of XYZ is based on code sent to us by XYZ” is due to the FTC implementing its disclosure procedure for game reviews.
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Back in 2019, the FTC implemented a digital booklet called Disclosures 101 for Social Media Influencers where they detailed how streamers and influencers can disclose their sponsorships online. It seems that the agency isn’t happy with the current state of affairs as the world is spinning out of control when it comes to sponsored content, influencers manipulating reviews and creating fake content for payment.
In an attempt to fix some of the ongoing issues, the FTC has proposed changes to its Endorsement Guides. These were last edited way back in 2009 when the birth of the influencer began. The new changes aim to “reflect the extent to which advertisers have turned increasingly to the use of social media and product reviews to market their products.”
The FTC says that these new guidelines won’t just affect the social media influencers but also the brands that pay the accounts to share fake reviews and sponsored content. The FTC aims to make both parties liable for manipulated content should the campaign not meet the legal requirements.
The aim of these changes is to clean up the internet. The FTC believes that promotional material shouldn’t “distort or misrepresent” what people actually think of their product. The edit to the policy reads:
“A social media advertisement promoting a cholesterol-lowering product features a testimonialist who says how says by how much they lowered their serum cholesterol. The claimed reduction greatly exceeds what is typically experienced by users of the product and a disclosure of typical results is required.
The marketer has been able to identify from online data collection Spanish speaking individuals with high cholesterol levels who are unable to understand English and microtargets a Spanish-language version of the ad to them, disclosing the typical results in English. The adequacy of the disclosure will be evaluated from the perspective of the targeted individuals.”
The FTC is also buckling down on any sort of “child-directed advertising” as children react to advertising and influencers differently than adults even if disclosures are shared. FTC’s Rebecca Slaughter says that online reviews and influencer endorsements are ubiquitous on the internet and present real and new challenges. She said:
“Unlike yesterday’s celebrity endorsers, influencers are often seen as experts in their market, whether that’s for fashion, health products, or cutting edge consumer technology.
Influencers constantly interact with their followers in their market or social niche. These are often relationships of trust and without clear guidelines and responsibilities. They’re ripe for commercial exploitation and deception. The new guides make it clear that we intend to investigate breaches of that trust, whether it’s by brands manipulating reviews, influencers not disclosing material relationships with companies, or by micro-targeting aimed at deceiving specific groups of consumers.”
Slaughter also says that brands have a responsibility to ensure their influencers disclose any relationship publically.
At the moment, these new changes have been proposed at the FTC and are now being sent to the Federal Register in the United States. The hearing to see whether or not they are enforced will be heard on 19 October.