“Be more social!” Twenty-five years ago, this was probably something your parents said to you to get you up and out of the house. However, the phrase likely has a whole new meaning in 2018. Now, it likely means get more active on one or more of the seemingly ubiquitous internet social media platforms like Twitter, Facebook, Instagram or Snapchat. And as the world-at-large gets more “social,” companies understand they must get social as well to connect with their target audiences.
Online advertising can reach a broader base of customers than ever before, resulting in what can seem like a never-ending stream of promotions and advertisements from companies competing for the attention of online viewers. However, despite what it may seem like at times, advertising on the internet is not a license to make claims with reckless abandon. The regulations that apply to point-of-sale, print and other traditional advertising apply equally to online advertising. And lately, FDA and FTC have stepped up enforcement of certain advertising practices used by companies on social media.
Two main federal agencies monitor how companies promote their food, beverage, dietary supplement and cosmetics products—FDA and FTC. (In addition, the U.S. Department of Agriculture [USDA] regulates products with more than minimal amounts of meat, poultry and eggs). FDA is charged with enforcing the Federal Food, Drug and Cosmetic Act (FD&C), as well as the numerous regulations issued by the agency to further implement the provisions of the FD&C, including regulations pertaining to the labeling of products.
FTC regulates advertising and is responsible for ensuring all advertising for any products, including food, beverages and supplements, is 1) truthful and not misleading; 2) not unfair; and 3) properly substantiated. Since many forms of promotion, including online claims, may be considered both labeling and advertising, it is likely both FDA and FTC will be viewing internet claims to ensure consumers are protected.
In its regulation of food, beverage and supplement products, one of FDA’s governing mantras is non-drug products may not be marketed or sold with the intent to diagnose, treat, cure or prevent any disease. FDA has long taken the position it may review any information disseminated about a product in determining what the true “intent” of a company is to sell a particular product. FDA has, with increased frequency, cited claims on company Facebook pages (in a 2016 warning letter to CellOxess LCC, for example), Twitter pages, Instagram accounts and even LinkedIn pages (in a 2017 warning letter to Amazing Sour Sop Inc., for example) as evidence products are intended for use as drugs.
While FTC has continually refined its scrutiny of online advertising over the last several years, an increased focus on social media advertising was evident in 2017, specifically in the area of product endorsements and testimonials. FTC announced several enforcement actions related to companies in the social media space, as well as an update to the FTC’s guidance on endorsements, “The FTC’s Endorsement Guides: What People Are Asking.”
The Enforcement Guides provide guidance on how FTC is likely to apply truth-in-advertising principles to advertising that constitutes an endorsement of a product. Fundamentally, all endorsements must be truthful and not misleading. Additionally, all material connections between an endorser and a company must be disclosed so a person can properly evaluate the endorsement. The proper disclosure of material connections can be a sometimes-difficult task, especially on social media platforms with limited space to use.
In 2017, FTC focused on the role of influencers in social media advertising. Influencers are typically people with large followings on social media (celebrities, reality stars, bloggers, athletes, etc.), who are paid by companies to promote or recommend products on social media. Due to FTC’s concern over a perceived failure by many influencers to adequately disclose material connections between the influencers and the companies paying them to promote products, the agency delivered more than 90 letters to influencers and marketers, reminding them of their obligations to clearly and conspicuously disclose the connections. In those letters, FTC reminded influencers disclosures should be unambiguous, easily spotted, and not buried in a string of hashtags or other information.
Not everyone got the message from FTC’s first round of letters; in September 2017, FTC sent 21 follow-up letters, citing specific posts on various social media platforms the agency perceived as not being in compliance with its Endorsement Guides. Instead of the subtle reminders to influencers in the first batch of letters, the September letters contained specific requests to recipients to describe how they would achieve compliance. At the same time the new set of letters were sent, FTC also announced an enforcement action against the owners and influencers for an online gambling and gaming site. In the action, FTC filed a complaint against two well-known YouTube influencers who posted videos touting all the money that could be won on the site. They failed to disclose they were also the owners of the company behind the site.
With increased avenues social media platforms provide for companies to reach consumers, there is also an increased need for companies to be aware of FDA and the FTC regulation compliance. Making permissible claims and disclosing material connections are just two of the areas in which companies must be well-versed to avoid unwanted action from regulators and other fronts.
Justin J. Prochnow is an attorney and shareholder in the Denver office of the international law firm of Greenberg Traurig LLP. His practice concentrates on legal issues affecting the food & beverage, dietary supplement, and cosmetic industries. He can be reached at (303) 572-6562 or [email protected] Follow Justin Prochnow on Twitter at @LawguyJP.
Find out more about advertising on favorite social media sites from Justin Prochnow during the “Marketing Effectively & Legally via Social Media” workshop on Thursday, Nov. 8, 2-4 p.m. at SupplySide West in Las Vegas.
This article is issued for informational purposes only and is not intended to be construed or used as general legal advice. The opinions expressed are those of the author exclusively.