Although the writer of this post, Glen Gilmore, is an attorney, nothing in this post should be considered legal advice. If you have a question of law, please consult with an attorney from your jurisdiction.
For Want of Disclosure, a Pinterest Contest was Lost
In 2014, the Federal Trade Commission (FTC) caught the attention of the retail, marketing and advertising communities when it announced its decision not to pursue an enforcement action against a major retailer, Cole Haan, for a contest on the social media site, Pinterest, even though the regulatory authority found that the retailer had failed to provide adequate disclosure required under Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45.
Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, provides that “unfair or deceptive acts or practices in or affecting commerce…are…declared unlawful.” Applying this principle, the FTC requires the disclosure of a “material connection between a marketer and an endorser when their relationship is not otherwise apparent from the context of the communication that contains the endorsement.”
When Cole Haan crafted a Pinterest contest that encouraged users to share photos with the hashtag #WonderingSole, the FTC found that that particular hashtag would not alert other users that the photos were being shared as part of an incentivized, social media contest – a chance to win a $1,000 shopping spree.
In explaining its decision not to pursue an enforcement action, the FTC offered that it had not “previously publicly addressed whether entry into a contest is a form of material connection, nor have we explicitly addressed whether a pin on Pinterest may constitute an endorsement.”
Given this rationale for not pursuing an enforcement action, the FTC’s notice, in its updated social media guidance concerning “simply posting a picture of a product in social media” is one that sponsored bloggers, brands and marketers should listen to very carefully.
Posing the question of whether a sponsored endorser would have to “say something positive” about a product for a post to be an deemed an endorsement covered by the FTC Act, the FTC answered:
“Simply posting a picture of a product in social media, such as on Pinterest, or a video of you using it could convey that you like and approve of the product. If it does, it’s an endorsement.”
This is an extremely important point the FTC is making: no words are needed to trigger the FTC Act’s duty to disclose. This is one big step for the world of social media marketing and is a big nod to the triumph of the visual web. (It is also another example of the FTC keeping pace with trends in the social media marketing space.)
Elaborating on the point, the FTC went on to say, “You don’t necessarily have to use words to convey a positive message. If your audience thinks that what you say or otherwise communicate about a product reflects your opinions or beliefs about the product, and you have a relationship with the company marketing the product, it’s an endorsement subject to the FTC Act.”
Brands and marketers, be sure to inform your sponsored endorsers that their duty to disclose is triggered even by the sharing or pinning of a product belonging to the sponsor.
If a violation of this guidance occurs, there will be no free pass as the FTC has already provided its warning.
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