Tag Archives: social media

Are Your Social Media Brand Endorsements and Sponsored Ads FTC Compliant? A Guide for Proper Disclosures

by Jason W. Brooks

Endorsements from a celebrity and/or social media influencer are an important tool used by advertisers to build a brand’s image and persuade consumers. Moreover, it’s understandable that any brand ambassador would like to preserve an “organic” feel when conveying their messages. But the law, governed and enforced by the Federal Trade Commission (“FTC”) under the FTC ACT (15 U.S.C. §§ 41-58, as amended), states that “endorsements must be truthful and not misleading.” FTC relies on its recently updated Guides Concerning Use of Endorsements and Testimonials in Advertising (the “Guides”, as set forth in 16 CFR Part 255) to ensure that consumer products and services are described truthfully online, and that consumers understand what they are paying for. The Guides represent administrative interpretations of laws enforced by the FTC, and therefore failure to adhere to the voluntary compliance requirements set forth therein, may result in law enforcement actions for violations of the FTC Act.

The Guides themselves are not regulations, and so there are no civil penalties associated with them. But if advertisers don’t follow the Guides, the FTC may decide to investigate whether the practices are unfair or deceptive under the FTC Act, and may take corrective action under Section 5 of the FTC Act (15 U.S.C. 45). The following then, shall serve to advise regarding the basic legal requirements you must follow when making sponsored endorsements of any product, service or brand on any of your social media platform.

In short, in order to comply with the FTC, you must clearly and conspicuously disclose your material relationship with any brand which you are endorsing via your social media. The following will provide some guidance as to how and when you should disclose, but as a general rule of thumb, “when in doubt, disclose.

What Is An Endorsement?

According to the FTC, an endorsement means “any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser.” Thus, in order to be FTC compliant as the endorser of any brand’s product or service, you must ensure the following with respect to any of your endorsements:

  1. The endorsement must reflect your honest opinion, belief, finding, or experience with respect to the product or service you are endorsing; and
  2. You must have been a bona-fide user of the endorsed product or service at the time you made your endorsement.

[For example, you would not be permitted to tweet about how delicious you believe a particular beverage tastes, if (a) you’ve never actually tried that beverage, or (b) you don’t honestly believe the beverage is delicious].

Material Connections Must Be Disclosed.

In addition to the foregoing requirements, when there exists a connection between the endorser and the seller of the advertised product or service that might materially affect the weight or credibility of the endorsement, that connection must be fully disclosed. In other words, your endorsement of any product or service is subject to enforcement if the brand/advertiser, or someone working for the brand/advertiser, pays you or gives you something of value or provides some other incentive to mention their product on any of your social media.

Required Disclosures Must Be Clear and Conspicuous.

The hard and fast rule is, material relationships between brand and endorser on social media must be clearly and conspicuously disclosed. The FTC has provided specific guidance as to how to address these disclosures on various social media platforms, as follows:

  1. On Twitter, Facebook and Instagram: While there are no specific rules as to how the disclosure needs to be stated, the FTC has taken a firm stance that the limited 140-character space available on Twitter does not change the need to disclose in an endorsement tweet. According to the FTC, “the words ‘Sponsored’ and ‘Promotion’ use only 9 characters; ‘Paid ad’ only uses 7 characters; and starting a tweet with ‘Ad:’ or ‘#ad’ takes only 3 characters” – each of these would likely be effective disclosures, per the Guides. Also note that the disclosure must be made on each and every tweet you make, even if you are tweeting the same message consecutively (i.e. minutes or even seconds apart) or if the tweet is broken up into several parts. The same rules apply to Facebook and Instagram posts, with the caveat that, because you are not limited in space on these alternative platforms, you should err on the side of making your disclosure longer and more obvious, rather than falling back on the same abbreviated text that would be appropriate for Twitter.
  1. Contests & Sweepstakes Rules Need Disclosure: If you are promoting/sponsoring a contest on behalf of a brand, a disclosure is also required. Moreover, the responsibility falls on you (e.g. the contest sponsor) to make sure people entering the contest make the disclosure themselves if the contest requires them to review or promote a product/service. Again, the key is whether the gift would affect the “weight or credibility” of an endorsement, but determining where to set the bar is difficult, so it’s always safer to disclose. For example, if you, as a brand ambassador, are calling upon your social media followers to tweet about, or make an online review of the brand, in exchange for some type of gift or reward, then your call to action must also require that your followers disclose the contest/sweepstakes. Displaying a hashtag like “#contest” or “#sweepstakes” should be sufficient as a disclosure; however, using something like “#BrandXYZ_Rocks” or merely the abbreviated “#sweeps” is not sufficient because the relationship is not deemed obvious enough and people might not understand what the disclosure means.
  1. Video Disclosures Must Be Made Early And Often: For any YouTube or other sponsored online video (e.g. Snapchat, Vine, etc.), it’s not enough to have a disclaimer on the details page. The FTC has stressed that proximity and placement are two determinative factors as to the conspicuousness of the disclosure. Therefore, your disclosure must be made at the beginning of the video and preferably repeated multiple times for longer-form pieces. Similarly, streaming video, such as Periscope or when making a video/mobile game review as a sponsor/ambassador of a gaming company, also needs disclosure throughout the video. As an example, stating throughout your videos or live streams language such as, “Sponsored by [name of the company],” would be sufficient as a disclosure.
  1. Facebook “Likes” Might Require Disclosure: The FTC has not clearly addressed this specific issue yet, however, you should still stick to the same general rule of clearly disclosing if you are acting as a brand ambassador/sponsor to incentivize your followers to “Like” a brand on Facebook. It should be noted however that the FTC is unequivocally against the practice of “fake likes.”

Conclusion.

In summary, whenever you are acting as a Brand Ambassador or Sponsor of any product or service, you must ensure that people get the information they need to evaluate your sponsored statements. If you were given something for free or paid to promote a product or service, clearly state so. You should use clear and unambiguous language and make the disclosure stand out. Consumers (i.e. your social media followers) should be able to notice the disclosure easily and should not have to look for it. And finally, if your disclosures are hard to find, tough to understand, fleeting, or buried in unrelated details, or if other elements in your ad or message obscure or distract from the disclosures, they don’t meet the “clear and conspicuous” standard and you could find yourself the subject of an action from the FTC.

Jason W. Brooks, Esq. is an entertainment attorney and a founding partner of altView Law Group, LLP. Jason specializes in transactional business and legal affairs matters, particularly in the areas of New Media and TV production. Feel free to contact Jason via email: Jason@altviewlawgroup.com or follow him on Twitter: @Jasonbrookslaw.

Disclaimer: The information in this post is intended for general information purposes only and should not be construed as legal advice.

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Prohibiting Employer Monitoring of Employees’ Social Networking Accounts

By Kevin Mills

It seems that in recent years, there has been an increase in the number of news reports lauding law enforcement for using social networking sites to help catch criminals.  It’s often entertaining to hear about criminals posting self-incriminating evidence online, creating “LinkedIn to locked up” scenarios.  However, when employers (or potential employers) use similar investigation tactics with regard to employees (or potential employees) it is an entirely different matter; increasingly, state and federal governments have grown alarmed with employers’ practice of requesting access to current and prospective employee social media accounts for investigative purposes, and they are moving to put an end to such practices.

In April 2012, Maryland became the first state to enact a law aimed at prohibiting employers from requiring current and prospective employees to provide employers with access to their social media accounts.  Maryland recognized the need for such laws when the ACLU filed a lawsuit after a job interviewer for the State Corrections Department asked a job applicant to provide his social network passwords and then logged on to the applicant’s Facebook account and reviewed his messages, wall posts, and photos.  The ACLU alleged that the conduct violated the Stored Communications Act, the First Amendment, and the Fourteenth Amendment, and constituted an invasion of privacy. The State defended its policy, stating that it needed to check job applicants’ Facebook pages in order to ensure that the applicants were not engaging in any gang-related activities.

In response, the Maryland legislature moved quickly and became the first state to enact a statute expressly prohibiting employers from requesting or requiring the disclosure of usernames or passwords to personal social media accounts. The statute also prohibits employers from taking (or threatening to take) any disciplinary action against employees or job applicants who refuse to disclose such information.

Over the course of the past few months, several other states, including New York, California, and Illinois (effective January 1, 2013), have followed Maryland’s lead and passed legislation similar to Maryland’s.  Additionally, Delaware, Michigan, Minnesota, New Jersey, Texas, and  Washington have all proposed similar laws.

The Federal Government has also taken steps to implement similar measures. In April 2012 the Social Networking Online Protection Act was introduced in the House. The Act would prohibit employers from requiring current or prospective employees to provide their usernames or passwords to access online content.  In the Senate, the Password Protection Act of 2012 was introduced, with provisions similar to the House bill.  In addition, Richard Blumenthal (D-CT) and Charles Schumer (D-NY) have requested that the Department of Justice and the EEOC launch a federal investigation into these practices.

Employers and business owners should remain abreast of these developments.  Even if a particular state does not affirmatively ban an employer from requesting social media passwords, employers should still proceed with caution because the practice of requesting social media passwords may give rise to liability (including a potential violation of employee Section 7 rights under the National Labor Relations Act).

Businesses will have to learn how to address these types of social media issues.  According to a recent survey by the Poneman Institute, only 35% of companies have a social media policy and only a fraction of those companies actually enforce them.  One thing is clear:  to be safe, Businesses that currently ask employees or applicants to provide them with access to social media accounts should consider ending the practice.

It should also be noted that there are other potential liabilities arising out of an employer viewing a current or prospective employee’s social media accounts and protected social media content (viewing publicly-available information is not currently prohibited by any of the pending state and federal statutes).  For example, what if an employer encounters the following when doing a background check on a prospective employee: “On the wagon, been sober for one whole month!” or “Having a bad day…looking to take it out on someone…WATCH OUT WORLD!”  Issues raised by an employer’s knowledge of these posts are beyond the scope of this piece, but they certainly do have the potential for raising important employment law issues.

 

Kevin Mills is an owner of the law firm of Kaye & Mills where his practice focuses on advising clients with transactions across a full range of issues in entertainment, media, technology, Internet and general business. His practice encompasses copyright; trademark; trade dress; trade secret; brand protection; content creation, protection and distribution; and general corporate, organizational and business matters.

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Filed under Internet Law, Privacy

Out With the Wash: Fair Use in the World of Manipulation-Based Art

by Jordan S. Paul

On April 20, 2012, the Estate of James J. Marshall sued artist Thierry Guetta (and Google) for copyright infringement for his unauthorized and unlicensed use of Marshall’s “iconic photographs of celebrated popular musical performers.”   Marshall, who died in 2010, was a world-renowned photographer, famous for his portraits of musicians such as John Coltrane, Sonny Rollins, Thelonious Monk, Dizzy Gillespie, Brian Jones, and Jimi Hendrix, to name only a few.

Guetta, better known by his graffiti handle “Mr. Brainwash,” is an artist who creates manipulation-based art by altering existing photos and images.  He first gained dubious notoriety for his central role in the mockumentary film Exit Through the Gift Shop.  By most accounts, Exit Through the Gift Shop was a satirical prank produced and directed by Banksy, the legendary street artist whose poignant stencil art has popped up on city walls from Los Angeles to London to the West Bank.  Although Guetta was the central focus of the mockumentary, the movie frequently questions his artistic merit and authenticity in what most have described as Banksy’s intent to criticize the naïveté of the art community.

Artistic commentary aside, Exit Through the Gift Shop has made Guetta a commercially successful artist.  Since the release of the film, Guetta’s pieces and installations have sold for upwards of $100,000.  He was even been hired to produce art for the Red Hot Chili Peppers’ for a guerilla marketing campaign for their most recent album.  Problematically for Guetta, most of his best-known and lucrative pieces incorporate large portions of other artists’ copyrighted works.

In 2009, photographer Glen E. Friedman sued Guetta in the Central District of California, alleging that Guetta had infringed on his photograph of Run DMC by incorporating the image into art-work, t-shirts, and postcards.  Guetta raised fair use as a defense, but after evaluating the two works in the context of the four fair use factors, Judge  Dean Pregerson found no transformative use and granted summary judgment in favor of Friedman.  Judge Pregerson held that “[t]o permit one artist the right to use without consequence the original creative and copyrighted work of another artist simply because that artist wished to create an alternative work would eviscerate any protection by the Copyright Act.  Without such protection, artists would lack the ability to control the reproduction and public display of their work and, by extension, to justly benefit from their original creative work.”

This ruling was of particular importance and interest because it resolved issues identical to those in the much more well-known Shepard Fairey copyright infringement case involving a portrait of President Obama.  Because that case settled, the courts did not have the chance to establish a precedent regarding this type of fair use.

In the case of Marshall vs. Guetta, Guetta’s works appear to have the same level of artistic deviation from the original Marshall photographs as they did from the Friedman photographs in the Run DMC case, suggesting that Guetta will again lose on summary judgment.  However, some of Guetta’s works that are based on Marshall’s photographs may incorporate words that could be construed as commentary on the original works, which would weigh in favor of a finding of transformative use.  To complicate matters further, it is unclear whether or not Guetta actually sold any of the works he created based on the Marshall photographs, or if he just used them for promotional purposes.  While this issue would not necessarily affect the liability determination, it might limit the damages available to Marshall.

The sharing and manipulation of art and photography have become staples of today’s social-media-based digital communications.  In the last few months alone, we have seen the rise in popularity of Pinterest and the billion dollar acquisition of Instagram by Facebook.  Interestingly, as the value, proliferation, and ease of photography and photographic manipulation increase, courts seem to be providing greater protections to the original artists and cutting back on the scope of fair use.  As this trend grows, so will the legal issues that accompany it.

Jordan Paul is an attorney with Robins, Kaplan, Miller & Ciresi L.L.P. where his practice focuses on intellectual property and complex commercial matters, with an emphasis on copyright infringement and contract disputes in the entertainment industry.

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