US regulator takes issue with paid Instagram promotions

The Federal Trade Commission (FTC) said it had sent more than 90 letters to social media 'influencers' and marketers to remind them of the standards that paid promotions must conform to. The businesses and influencers were not named.

The letters concerned promotions made via Instagram which were flagged to the regulator by consumer rights advocacy group Public Citizen and other associated bodies.

"The FTC’s endorsement guides state that if there is a 'material connection' between an endorser and the marketer of a product – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement," the FTC said in one of its letters. "Material connections could consist of a business or family relationship, monetary payment, or the provision of free products to the endorser."

In its letters, the FTC said that even if promotions contain hashtags which aim to inform consumers that they have been paid-for, the inclusion of those hashtags may not always be sufficient to meet the FTC's standards.

It said: "Where there are multiple tags, hashtags, or links, readers may just skip over them, especially where they appear at the end of a long post."

Public Citizen said that "nondisclosed advertising", in breach of FTC guidelines, is "rampant on Instagram", and called for the regulator to take a tougher stance to enforce its policies.

Robert Weissman, president of Public Citizen, said: "Instagram has become a Wild West of disguised advertising, targeting young people and especially young women. That’s not going to change unless the FTC makes clear that it aims to enforce the core principles of fair advertising law."

In 2015, US drugs manufacturer Duchesnay received a rebuke from the US Food and Drug Administration's Office of Prescription Drug Promotion (OPDP) over the promotion of its Diclegis product by celebrity Kim Kardashian via her social media accounts, including on Instagram.

Diclegis is a drug that can be prescribed to women who experience morning sickness during pregnancy. While Kardashian had presented claims about Diclegis' efficacy, her posts failed to include "risk information" associated with its use, the OPDP said at the time. The omission meant Kardashian's promotion constituted a "misbrand" of Diclegis under US laws, and raised concerns on public health grounds, the OPDP said.

Last year, the UK's Competition and Markets Authority (CMA) issued open letters to marketing professionals and to bloggers about clear labelling of paid-for editorial content. CMA said it had concerns about the labelling of paid promotions and use of fake reviews.