Hunton Retail Law Resource

On September 7, 2017, the FTC announced its first-ever case against social media influencers. In its complaint, the FTC alleged that two widely followed gamers, Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell, posted messages endorsing online gaming service CSGO Lotto without disclosing that the two jointly owned the company. In addition to deceptively endorsing the service, the two are alleged to have paid thousands of influencers to promote the CSGO Lotto on social media without requiring those influencers to disclose the payments, which ranged between $2,500 and $55,000. The consent agreement requires Cassell and Martin to clearly and conspicuously disclose material connections between any endorser and promoted products and services. 

While this is the first instance of social media influencers settling claims of misrepresentation online, it likely will not be the last. In April 2017, FTC staff sent more than 90 educational letters to influencers and brands to remind them of disclosure requirements. The FTC’s September 7 announcement included follow-up warning letters to 21 of the influencers who got the April letters.

The FTC also updated its Endorsement Guide FAQs in connection with its announcement. The update includes answers to more than 20 new questions. Of special note are FAQs cautioning that brands should not assume that a social media platform’s own disclosure tools are sufficient to bring a post into compliance or that “everyone knows” about an influencer’s brand affiliations, and should avoid ambiguous disclosures such as #thanks, #collab, #sp, #spon or #ambassador.