The Federal Trade Commission Explains How to do Social Media

The story: recently the Federal Trade Commission updated their guidance on using social media as a promotional tool.FTC

Start-ups, entrepreneurs, non-profits, and small businesses all depend on social media for marketing, and we commonly ask our friends, partners, co-workers, volunteers, and advocates to engage on our behalf. Larger companies often ask their employees to participate as well.

We make and receive many requests to like Facebook pages and posts, re-tweet promotional information, vote up Reddit articles, and review things on Amazon. To some it seems perfectly normal to comment on blogs or post reviews as if we were a neutral observer or satisfied customer, not disclosing that we might actually be a close friend, partner, or family member.

The virtues of transparency and disclosure have become more apparent as social media matures, and almost everyone uses it. But these virtues often are often sacrificed to those of expediency and efficiency. Who has time to mention that a re-tweet of a client’s project is actually a promotion? Or the space to add a disclosing hashtag on a platform that only gives you 140 characters?

Social media is also marked by informality, the mixing of personal and professional, and the idea that speech should be free and uncensored. But if this speech is being compensated, even indirectly, then the Federal Trade Commission (FTC) considers it promotional speech, and they have something to say about it.

What they have to say can be found online, in a set of guidelines with examples and instructions.

What Do The Guidelines Say?

Basically, the guidelines are telling us to disclose any connections. According to the guidelines, each individual tweet, post, review, etc., should include information identifying it as an ad or disclosing the relationship. Because there is a lot of material, the wise course would be to review the original text. This article also has a pretty good overview.

A few points worth considering:

If you are running a contest that asks your fans, customers, etc. to spread the word in order to win something, it is the responsibility of the brand to ensure that the nature of this sharing is disclosed. The FTC suggests requiring a hashtag such as #contest or #sweepstakes.

Tweets and posts generally should be individually labelled, using a hashtag such as #ad. The FTC does acknowledge that not all tweets by a company are promotional and leaves room for professional endorsers whose status is well known to leave off the individual disclosures.

Employees who are asked to promote something for their employer must disclose the relationship, and employers cannot ask employees to post something that is “untrue, that is not that employee’s valid opinion, or to endorse a product or service they are unfamiliar with.”

Like buttons may require disclosure, but the guidelines are ambiguous: “However, we don’t know at this time how much stock social network users put into “likes” when deciding to patronize a business, so the failure to disclose that the people giving “likes” received an incentive might not be a problem.” Buying likes from people not familiar with the product or service is clearly a deceptive practice, however.

Don’t Be Alarmed at the New FTC Guidelines

The Federal Trade Commission is trying to identify a line, but the guidelines are mostly to help businesses stay well clear of that line. A couple recent articles have taken an alarmist tone, warning us to implement these guidelines because some kind of crackdown is coming.

There is no crackdown coming. The guidelines are strictly voluntary. The underlying law is the same unfair and deceptive practices law that applies to all forms of advertising. It has not changed. The Federal Trade Commission does have authority to file complaints based on that law, but these complaints are rare and initially consist of a cease and desist order. Fines are not imposed unless that order is violated.

If you are a blogger, small business, or non-profit struggling to get attention and aren’t completely in accord with the guidelines, the chances of FTC enforcement are remote. The guidelines themselves state:

Are you monitoring bloggers?

Generally not, but if concerns about possible violations of the FTC Act come to our attention, we’ll evaluate them case by case. If law enforcement becomes necessary, our focus usually will be on advertisers or their ad agencies and public relations firms. Action against an individual endorser, however, might be appropriate in certain circumstances.


The truth is that the likelihood of enforcement for non-compliance with the guidelines is extremely low. But there are other consequences if someone is deceptive on social media. The search engines (including social media search tools) are becoming more sophisticated, and obviously fake reviews may actually incur a penalty. Moreover, there are always members of communities that pride themselves in uncovering reviewers and promoters, which can create be embarrassing to a company. It’s worth noting that comments and reviews continue to exist after a particular campaign ends, and there have been cases where older content that was convincing when originally posted has been exposed by social or technological developments that arose years later. These revelations still have the power to embarrass the company originally responsible. The incentive to be transparent may come more from these pressures than from the FTC.

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