Hunton Retail Law Resource

A public relations company and a publisher have been caught in the FTC’s net after using influencer marketing to help promote an anti-Zika mosquito repellant during the 2016 Brazil Summer Olympics.

The FTC’s complaint alleges that the manufacturer of FIT Organic Mosquito Repellent (“FIT”) hired PR firm Creaxion Corporation (“Creaxion”) to help launch and promote the repellant to consumers, the media and retailers. Creaxion, partnered with Inside Publications, LLC (“Inside Publications”), publisher of Inside Gymnastics magazine, to broker deals with Olympic Gold medalist gymnasts to promote FIT at the Brazil Olympics. Inside Publications ran several articles featuring FIT, placed the product in athletes’ gift baskets and procured paid athlete social media endorsements. According to the FTC, the promotions misleadingly suggested that the athletes’ statements reflected their independent experiences with FIT, and lacked the required social media disclosures. The FTC also stung the PR firm for allegedly reimbursing employees and others for reviewing the mosquito spray online.

In two proposed administrative orders, one with Creaxion and one with Inside Publications, the companies are prohibited from making misrepresentations about endorsers, must clearly and conspicuously disclose paid endorsements and may not format their paid ads in ways that misrepresent they are independent statements. Both companies are required to take steps to ensure compliance, including notifying endorsers of their responsibilities, monitoring them and terminating endorsers who do not comply.

These cases demonstrate the FTC’s willingness to go after all actors in the influencer chain – PR firms, publishers and, in previous actions, influencers and brands themselves. Any company involved in influencer marketing or product endorsements should dust up on the FTC’s rules and guidance, and contact Hunton’s advertising counseling team to make sure that their disclosures stick the landing.