How In-House Lawyers Responded to the FTC's 'Influencer' Letters

In a March 20 letter, the Federal Trade Commission put on notice the manufacturer of the popular Muscle Milk line of protein shakes: If a celebrity gets paid for a promotional post on Instagram, that business relationship would need to be disclosed.

The FTC highlighted an Instagram post by Nina Agdal, in which the model poses in the corner of a boxing ring with boxing gloves and two cartons of Muscle Milk at her feet. The caption of the Instagram post: “Spent my morning in the ring with @MuscleMilk @BoxingNapoleon,” followed by emoticons of a trophy and a flexed bicep.

“If your company has a business relationship with Ms. Agdal, that relationship should be clearly and conspicuously disclosed in her endorsements,” wrote Mary Engle, associate director of the FTC’s division of advertising practices, framing the letter as a reminder of the agency’s disclosure standards.

The National Law Journal obtained several responses from companies that received letters from the FTC this year urging greater disclosures of any paid relationships that involve so-called social media “influencers.” The agency and consumer advocacy groups have raised concern that influencer advertising can give the impression of an organic endorsement when, in fact, there is a business relationship behind the product promotion.

Hormel Foods, the Minnesota-based parent of the Muscle Milk brand, told the FTC that the company had gotten the message, according to a letter the NLJ obtained through a Freedom of Information Act request.

“This incident has raised our awareness regarding ensuring all of our advertising and public relations agencies educate our promotional partners and endorsers on proper disclosures,” Steve Toeniskoetter, a senior in-house attorney for Hormel, wrote to the FTC. “We are in the process of modifying our policies and practices accordingly.

Who Got Social ‘Influencer’ Letters From the FTC? Read the List.

Hormel was responding on behalf of its subsidiary CytoSport. The company was among others—including Dunkin’ Donuts, Chanel, Adidas and Cabela’s—that received a letter from the FTC as part of the agency’s effort to ensure proper disclosures in so-called “influencer marketing. The agency has cracked down on the growing advertising trend, in which brands pay celebrities and others with large followings to promote products on their social media accounts.

Toeniskoetter did not respond to an interview request. He explained in his letter that the public relations firm Azione PR Inc. had hired Agdal “for the limited purpose” of raising awareness of the launch of the Muscle Milk Coffee House Series line of protein shakes.

“Because of the limited engagement, she was hired through our agency (Azione) instead of directly by CytoSport,” he wrote. “As a result, her contract did not include our standard language regarding ensuring proper disclosures in social media. We are working with Azione and our other outside agencies to ensure all agreements with influencers have requirements on proper disclosures going forward.”

Azione could not be reached for comment Friday.

The FTC in some of the letters gave suggestions for how companies could make clear disclosures of paid endorsements.

For instance, in its letter to FabFitFun, a subscription delivery service that supplies beauty and fitness products, the FTC called attention to Instagram posts by Jenni Farley—the “Jersey Shore” star better known as JWoww—and Jamie Lynn Spears that included the hashtag “#fffpartner.” The FTC took issue with the placement of that hashtag—an apparent attempt at disclosure—at the end of the caption and also questioned if consumers would understand “#fffpartner.”

Chris Lipp, the company’s general counsel, embraced the advice, according to a letter obtained through the FOIA request.

“We have considered and appreciate your suggestions to use the hashtag #FabFitPartner and to require our influencers to make this disclosure at or nearer the beginning of their posts, and we will be implementing your recommendations in our influencer agreements and guidelines,” Lipp wrote in a letter to Engle dated April 4. Lipp did not respond to an interview request.

The NLJ requested copies of responses sent to Engle, who wrote not only to companies but also celebrities such as Jennifer Lopez and Nicole Polizzi—the “Jersey Shore” star better known as Snooki—Lindsay Lohan, Heidi Klum, Victoria Beckham and the country music star Luke Bryan. The NLJ’s request turned up no records of correspondence from any celebrities or their representatives.

FTC attorney Michael Ostheimer told the NLJ on Friday that the agency learned some of the celebrities were not, in fact, paid to promote a product featured on their Instagram accounts. “Some influencers just posted on their own,” he said.

The records request did reveal emails about a conference call held between FTC officials and in-house lawyers at Johnson & Johnson, which received a letter concerning an Instagram post by the television personality Giuliana Rancic promoting Compeed, a blister treatment. Rosa Son and Paul Jeges, the two in-house counsel whose names and contact information appear in the email records, did not respond to an interview request.