The FTC came out with two documents this week that are significant for affiliate marketers, influencers, and merchants. For all of the background information on where the FTC currently stands, check out my post Affiliates Take Note: New FTC Disclosure Guidelines. It includes 7 years worth of statements, settlements, and updates from the FTC in one place.
Right now the FTC is talking a lot about “influencers” and doesn’t distinguish how they are paid. In affiliate marketing, we might want to know if they are being paid when people click on their links or use their exclusive coupon codes or whether they are flat fees (or maybe a combination of both). But for purposes of this discussion, the FTC does not seem to care about payment details and is more concerned in general about the practice of influencer marketing and how brands are using the influencers to get away with advertising that doesn’t look like advertising (they actually call it “launder advertising” and “illegal payola” which makes it sound even more sketchy!)
Let’s start with the Statement released on February 12, 2020. Regarding the Endorsement Guides Review.
The Commissioner cites that influencer marketing will reach $15 billion for 2022 and that it is getting harder for families and small businesses looking for truthful information. It also believes the tech companies are part of the problem and not the solution right now.
In an interesting statement and a change from the website that was fined last week, the Commissioner says that they want to “focus on advertisers, not small influencers.” Specifically “When individual influencers are able to post about their interests to earn extra money on the side, this is not a cause for major concern.” Chopra seems most frustrated that past enforcement (like the Lord & Taylor settlement) isn’t “deterring misconduct in the marketplace” and wants to be able to pursue larger sanctions against companies in violation.
Chopra wants to review the Endorsement Guides and would like the FTC to:
So after a long time of wondering if the FTC was going to actually take the disclosure guidelines seriously, I think we have our answer. There’s just too much money being made not to.
As mentioned in Chopra’s statement, the Commission wants to review the current Endorsement Guidelines and is now seeking public comment: FTC Seeks Public Comment on Its Endorsement Guidelines
This is an opportunity for our industry to officially tell the FTC what we like and don’t like about the Guidelines. What is possible for us to do and what isn’t.
A proposed Federal Register Notice gives a lot more detail about what the FTC is going to be considering. The questions are just a starting point and not a limitation on comments. Further, the FTC would like commenters to submit any available evidence and data that they have, including consumer complaints. You can read all of the proposed questions yourself but these are the ones that stuck out to me with my comments in the parentheticals:
This is just a sample of the included questions. The FTC clearly knows that their Guidelines are not really useful, not being followed, and don’t have as much teeth as they want them to. Now is our opportunity to help set the course going forward. The Federal Register notice gives more information on how to submit your comments (including online or paper). While the date isn’t set yet, it will be around April 13, 2020.