Bioré’s Witch Hazel Pore Strips “tighten and purify for gram worthy pores,” actor and model Shay Mitchell raved to her nearly 24 million Instagram followers in late February. The endorsement worked. “If @shaymitchell uses them, we all need to use them!” wrote one commenter. “If they’re good enough for Shay they’re good enough for us,” wrote another.
Nowhere in Mitchell’s caption did she explicitly reveal that she was touting the pore strips because Bioré paid her to. That omission was a glaring but remarkably common violation of the Federal Trade Commission’s rules, which mandate that influencers like Mitchell let their followers know when what seem to be genuine recommendations are actually ads.
The FTC has warned the former “Pretty Little Liars” star before to follow its rules. In 2017, it sent letters to Mitchell and 90 other influencers about their apparent failures to properly disclose paid endorsements — a practice known as stealth shilling. The commission flagged specific Instagram posts to each influencer and reminded them of their legal obligations. In response, a few explained that, although their posts may look like ads, they weren’t actually sponsored. (Heidi Klum, for example, informed the FTC that she just really likes Dunkin’ Donuts.)
But Mitchell and other influencers, undeterred, continued sharing sponsored content without clearly identifying it as such, prompting follow-up warnings from the FTC six months later. Mitchell, who updated her pore strips post to label it as a Bioré-sponsored endorsement after HuffPost reached out to her manager and public relations firm, has shared dozens of other posts that violate disclosure laws, according to the nonprofit watchdog Truth in Advertising, or TINA — and the FTC has let it slide.
The commission’s weak enforcement has led many brands and influencers to develop a sense of impunity, said Bonnie Patten, the executive director of TINA.
“It could be a cost-benefit analysis,” she said. “You can make lots of money, and there’s no punishment for breaking the law at this point, so why not?”
Mitchell’s decision to ignore at least two FTC warnings isn’t unusual among Instagram influencers and brands who quietly trade endorsements for payments. Kylie Jenner appears to do it here, Akon here, Snooki here, Gigi Hadid here, Scott Disick here, Drake here, Nicki Minaj here, Sofia Vergara here, Ciara here and Kim Kardashian here. The list goes on.
You can make lots of money, and there’s no punishment for breaking the law at this point, so why not? Bonnie Patten, the executive director of Truth in Advertising
Instagram is not liable for users who fail to comply with FTC laws. Nor is it responsible for policing violations. But the company did roll out a branded content tool in 2017 to increase transparency surrounding business partnerships on its platform. The tool lets brands and influencers easily draw attention to their relationships by including the “Paid partnership with [Partner]” tag at the top of their posts.
So why do so many still choose not to?
“[Influencers’] engagement rates are lower when their followers know that what they’re looking at is an ad,” Patten said. “On social media, the whole idea is to give an influencer’s followers a peek into their life ― to give a genuine, authentic connection between the follower and influencer ― and nothing stops a buzz more than something that screams, ‘This is an ad!’”
The higher an ad’s engagement is, the higher its value becomes, and sponsorship deals with influencers who have consistently high engagement levels can be incredibly lucrative. The Kardashian and Jenner sisters, who are notorious for stealth shilling, can reportedly earn up to six figures per sponsored post.
A 2016 survey of nearly 350 influencers found that 1 in 4 has been explicitly instructed by brands not to disclose their commercial arrangements. But both parties have financial incentives to mislead consumers, and both should be held accountable, Patten said.
A Lack Of Enforcement
The FTC provides on its website both a 12-page guide and an FAQ breakdown to demonstrate acceptable forms of disclosure for paid endorsements. Language and placement matter: Starting an Instagram caption with the hashtag #Ad or #Sponsored or, when appropriate, using Instagram’s branded content tool, is sufficient. Simply tucking in #[Brand]Ambassador or #[Brand]Partner at the end is inadequate because it doesn’t clearly and conspicuously explain that the poster received a payment — typically money or free goods — in exchange for the endorsement.
Each of the influencers who were put on notice by the FTC in 2017 received a copy of the disclosure guide. And yet, with the sole exception of Lindsay Lohan, all of those who also got follow-up warnings later that year have continued to engage in deceptive marketing practices, according to TINA. The nonprofit tracked the Instagram pages of 21 “repeat offenders,” including Mitchell, between May 2017 and December 2018 and found more than 1,400 examples of posts skirting FTC laws. TINA filed a formal complaint earlier this month, turning its findings over to the commission and asking for “strict enforcement action” to be taken, but it has yet to receive a reply.
Just because you haven’t seen legal action to date does not mean that the FTC is not or would not look at legal action against a particular influencer. Mamie Kresses, senior FTC attorney
Mamie Kresses, a senior attorney in the FTC’s division of advertising practices, said the commission carefully considers such complaints.
“When particular posts and particular influencers are brought to our attention, we do take it seriously. We do look at it, and influencers should know that we take it seriously,” she said. “Just because you haven’t seen legal action to date does not mean that the FTC is not or would not look at legal action against a particular influencer.”
The FTC has cracked down on brands in a few cases, like when it filed a lawsuit against designer clothing retailer Lord & Taylor after discovering that the company paid to be featured in a Nylon Magazine article and also paid 50 Instagram influencers thousands of dollars to promote one of its dresses without disclosing the transactions. The 2015 Instagram campaign reached 11.4 million Instagram users and resulted in 328,000 brand engagements, and the dress subsequently sold out, according to the FTC’s complaint. Lord & Taylor settled the charges in 2016 and in doing so is prohibited from misrepresenting other ads and is required to ensure that its influencers obey FTC laws. The influencers themselves were not charged.
The only time the FTC has taken legal action against influencers was in 2017, after vloggers Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell were found to be aggressively endorsing online gambling service CSGOLotto across several social media platforms without disclosing that they jointly owned the company. In one Instagram post, Martin wrote: “Unreal!! Won two back to back CSGOLotto games today on stream – $ 13,000 in total winnings.” He and Cassell also reached a settlement with the FTC, which, as with Lord & Taylor, simply requires that they follow the law going forward. Neither of them was fined.
Consumers Paying The Price
The issue of stealth shilling on Instagram made headlines in 2017 when an explosive scandal ensnared Kendall Jenner and other supermodels. Jenner reportedly accepted at least $ 250,000 for a single disclosure-free Instagram post promoting Fyre Festival, a highly exclusive music festival that turned out to be a massive scam and resulted in a criminal fraud investigation. Three attendees who, like the others, paid thousands of dollars for tickets, filed a lawsuit against influencers who promoted the festival in undisclosed ads. The FTC issued another warning to influencers amid the fallout, and Jenner deleted the post in question, but it appears that she has since continued sharing sponsored content without proper disclosures — or repercussions.
In addition to intentionally deceiving consumers, some influencers have also enriched themselves by endorsing products that are unregulated, untested and possibly unsafe.
In January, Blac Chyna encouraged her 15 million Instagram followers to buy “maximum strength” skin lightening pills. She included a discount code and highlighted the pills’ alleged benefits without listing any risks in her post, which wasn’t labeled as sponsored content. The pill brand claims on its website that its products have been “proven safe and effective in numerous clinical studies,” but it did not respond to repeated requests from HuffPost to see those studies.
Kim Kardashian and others have advertised controversial appetite-suppressant lollipops without mentioning that they were paid to do so or including the possible risks associated with the product. The candies contain a laxative that could cause consumers to develop dependencies, according to a report by The Guardian. Former staffers from the company, which also sells “detox” tea, told the news outlet that they instructed celebrities and other influencers on how to compose their sponsored photos and what to write for the captions. “We never expected [the influencers] to actually use the tea,” one former employee said. “It just had to look like it.”
Patten believes the FTC has been lenient in the past because social media marketing was a relatively new thing, and the rules were unfamiliar to many. But the endorsements can have a “tremendous impact” — especially when they appear to be unsponsored — she said, and consumers are paying the price.
“We’re all hesitant or leery when we know something’s an ad because we know the motive and the bias of the influencer. But if we don’t have that information, it can absolutely affect how we spend our money,” she said.
“Influencers know what the law is now, and they’re brazenly ignoring it.”