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Are disclosures mandatory for social media influencers?

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Did you know that Cristiano Ronaldo earns more in revenue from his Instagram account than his football career?

Yes, his account is one of the most followed on the planet, making him an outstanding social media influencer that every brand wants to partner with. But did you also know that the FTC (Federal Trade Commission) mandates every social media influencer like C. Ronaldo to disclose certain details when making advertisements? That is, they must absolutely and clearly disclose the nature of the product and advertisement to their audience.

This requirement evolved since the CGSO Lotto Inc. case. In that case, owners of the company marketed their start-up by way of fake promotional posts that hinted that they won some substantial virtual currency on the same website. What the handler of the account chose to leave out, was that he was a joint owner of the company in question.

The rule thus became essential in a drive to protect the innocent public from being taken advantage of by biased influencers.

As per the .com Disclaimer FTC guideline, an endorser (i.e. social media influencer) is mandated to fully disclose any connection that might materially affect the weight or credibility of the endorsement, if any, to the audience. It doesn’t matter whether the influencer is an in-house or a freelance one, the requirement subsists.

Moreso, the disclosure has to be clearly positioned where the audience can easily and unmistakably see it. Amongst others, the disclosure has to use common words and be as clear as possible.

Remember this next time you want to contract or are contracted to run promotional posts. If you would like us to give a legal opinion on your situation, give us a call.

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