Advertising Law Blog

NAD has been at the forefront of scrutinizing social media content for compliance with applicable advertising standards. Its recent decisions challenging Fit Tea’s social media advertising, including bringing a proceeding against three of the Kardashians, exemplifies the reality that both brands and influencers are potentially liable for improper claims.

NAD – the National Advertising Division of the Council of Better Business Bureaus – is the leading self-regulatory body scrutinizing national advertising campaigns. While NAD hears advertising challenges between competitors, it also initiates its own proceedings based on media monitoring. In January 2017, NAD reviewed claims that Kourtney Kardashian, Khloe Kardashian, and Kylie Jenner had been paid to post about FitTea on various social media platforms, but had failed to disclose the paid nature of the endorsements in the relevant posts.

An example of Kourtney Kardashian’s Instagram post for Fit Tea is below. While there was apparently a business relationship between her and Fit Tea, she did not disclose that fact:

It is well settled that if an influencer posts a statement online regarding a product and there is a material connection between the brand and the influencer, the influencer must clearly and conspicuously disclose that connection. The obligation to make the disclosure is on the influencer, although because the post is considered advertising, the brand is also (and typically is) potentially liable.

In reviewing the Kardashian posts, NAD cited the FTC’s Guide to Endorsements and Testimonials, which provide that “when there exists a connection between the endorser and seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.” NAD noted that consumers are likely to weigh a paid endorsement differently to a spontaneous, unpaid post, and that they are therefore entitled to that information.

Prior to the conclusion of the investigation, Fit Products and the Kardashians voluntarily removed the challenged posts, and changed the practice on a going forward basis to disclose that there was a financial relationship between them and Fit Products. For example a more recent Khloe Kardashian post includes the hashtag #spon.

TAKEAWAY: While the merits of NAD’s concerns were not adjudicated, the inquiry is notable in that it was brought not just against the brand, but also the influencers. When there is a business relationship (in the broadest sense) between a brand and an influencer, both brands and influencers must be vigilant in clearly and conspicuously disclosing that there is a material connection in his or her social media posts.   This can include utilizing hashtags such as “#ad” or “#spon” within the post to alert consumers to the fact that there is a material connection.