Companies and advertisers have long realized the unprecedented power social media affords them to market their products. Particularly through the social media app Instagram, many posts by celebrities and other influential users are actually paid ads and endorsements. American advertising law requires advertisers to tell people when they are targets of advertising, and as a result, the Federal Trade Commission requires paid Instagram endorsements to be identified with a hashtag indicating that it is a sponsored ad. However, as reported by The Fashion Law, the FTC has done little to enforce this policy, and consumer interest groups such as Public Citizen and the Center for Digital Democracy are now demanding more action by the FTC. In their recent letter to the FTC, consumer interest groups cite over 50 recent examples of undisclosed paid ads by prominent celebrities such as the Beckhams and the Kardashians. The letter also points out the increasing use of social media campaigns by companies to advertise their products: companies give free products to average consumers, who are then encouraged to post pictures of themselves using the products and include a hashtag stating the specific company’s name. Because the consumers who post the pictures often do not disclose that they received the product for free, these posts, like the paid celebrity endorsements, violate FTC’s policy against deceptive ads.
The consumer interest groups assert that these undisclosed paid ads “covertly promote products that could harm consumers, especially teens and young adults,” who don’t realize that the celebrities are being paid and may not even actually use the product. These deceptive ads, disguised as genuine content, “trick consumers into believing they are receiving legitimate advice or recommendations.”
Prudence Ng is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2019).