Throw the Book at Them: Why the FTC Needs to Get Tough with Influencers.

Abstract

The Federal Trade Commission is an administrative agency that has traditionally been aggressive when deploying its delegated authority. At the core of these actions is the FTC’s interpretive definition of deception as based upon a reasonable consumer standard. Specifically, the commission has regularly used § 5(a), in tandem with its interpretive definition of deception as a sword in a variety of contexts: bringing enforcement actions for deceptive advertising, endorsements and claim substantiation against a range of industries. These include successfully brought actions or obtained consent decrees in enforcement proceedings against powerful economic entities including Google and Facebook. Yet, in one area, the FTC has been reluctant to engage in the hard tactics it regularly deploys in other areas. The Commission has struggled to employ a coherent enforcement strategy for deceptive practices by Social Media Influencers. The Commission has taken significant steps towards deception and disclosure enforcement for influencers, including publication of a set of guidelines for disclosure. However, despite a series of warning letters sent to high profile influencers in April of 2017, the Commission has not released a significant enforcement action - choosing instead to launch an inquiry in February 2020 to review the disclosure guidelines. As empirical research demonstrates that consumers do not understand the nature of the influencer process, this paper argues that the FTC should employ a commitment to a strong enforcement stance. The FTC’s failure to “make an example” of high-profile influencers or to take a hard-line approach with influencers, as the Commission did with native advertising online, represents a parting with the manner with which the Commissions has traditionally enforced the deception standard in endorsement ads. This departure, this paper argues, is undermining the FTC’s consumer protections.