Feds Warn Lindsay Lohan, Sofia Vergara & Other Instagram Celebs To Stop Their Stealth Social Advertising

The Federal Trade Commission has warned dozens of advertisers against using Instagram “influencers” to push their products and brands without properly disclosing that money changed hands. Now the FTC is going after the celebrities themselves, issuing warning letters to folks that range from merely online-famous to bona fide superstars.

On Sept. 6, the FTC escalated its crackdown on stealth-advertisements by sending warning letters [PDF] to 21 celebrities including supermodel Naomi Campbell, actresses Vanessa Hudgens, Lindsay Lohan, Lucy Hale, Sofia Vergara, and reality stars — like Snooki from Jersey Shore and that Scott Disick guy who married the least-famous Kardashian sister — who show off clothing, food, alcohol, and other products or services through posts on Instagram.

The letters, which were obtained by consumer advocates through a Freedom Of Information Act request, require the influencers to provide the FTC with details on any “material connection” they have to the marketers of these products.

The influencers must also provide the agency with an explanation of how they will properly disclose paid relationships with brands in the future.

Déjà Vu

Each of the letters begins the same way, reminding the celebrities that this isn’t the first time the FTC has reached out about their proclivity to post photos of themselves enjoy things like high-end suitcases, skin treatments, sunglasses, watches, and other products and services.

Mary Engle, FTC associate director for the division of advertising practices, then reminds the influencers that if they are being paid by a brand to post such photos, they have to “clearly and conspicuously” disclose that relationship.

As the agency has made clear in the past, merely burying “#ad” among multiple other hashtags is not sufficient. The same goes for a disclosure at the end of a very long caption that is automatically truncated by the Instagram app.

While the FTC does not reiterate these points in the most recent letters — as none of the Instagram posts cited include the #ad hashtag — the agency does point out other ways in which the influencers failed to adequately disclose whether or not they were paid to post the content.

A Tag Is Not Disclosure…

In the case of Aliaume Damala Badara Akon Thiam — better known as the rapper Akon — the FTC points to two Instagram posts (that have since been deleted) involving Ratel Geneva watches.

“In both posts you are wearing a watch that you tagged as ‘ratelgeneve,’” the letter states. “The FTC staff believes that tagging a brand is an endorsement of the brand.”

If there is a material connection between Akon and the marketer of the tagged brand, then the posts should disclose that connection.

Similarly, in a letter to Naomi Campbell, the FTC questions whether the supermodel has connection to luggage maker Globe-Trotter.

The supermodel had posted a photo of three pieces of luggage, accompanied by the caption “#onthemove @globe_trotter1897 #wheretonext ?? #omitravelstheworld.”

The FTC notes that while the company is tagged in the post, there is not clear disclosure of whether the celebrity has a material connection to the luggage manufacturer.

Neither Is A “Thank You”

When it comes to singer/actress Ciara Wilson, the FTC reminded the celebrity that thanking a brand did not constitute the disclosure of any kind of relationship.

For instance, the woman recently posted a picture of three pairs of baby shoes, accompanied by the caption, “Thank You @JonBuscemi.” In the picture, Wilson tagged the shoes “buscemi” and “jonbuscemi.”

According to the FTC, the “thank you” is inadequate in disclosing a material connection because it does not sufficiently explain the nature of her relationship to the brand.

As with the Akon post, the FTC notes that simply tagging a brand is an endorsement of the brand.

Is It Enough?

As we previously mentioned, this isn’t the first time these influences have been contacted by the FTC.

In fact, the agency first contacted the celebrities and pseudo-celebrities, as well as brand marketers, back in March with friendly educational letters asking them to pretty please follow the rules when it comes to paid endorsements.

Three months later, the FTC sent warning letters to the brands reminding them that Instagram posts must adequately disclose any “material connection” between an advertiser and an influencer, and that these disclosures be “clear” and “conspicuous.”

While the letters didn’t go directly to the Instagram influencers, one might hope and/or assume that warning recipients — including brands like Adidas, Chanel, Dunkin’ Donuts, Puma, and Popeyes — might mean they would pass this concern on to the celebrities who stealth-advertised their products.

Whether or not that happened, we don’t know. But we do know that the FTC has now bestowed upon the influencers their own warning letters.

Public Citizen, which is part of the coalition that sought the FTC’s letters, notes that the agency’s latest step is a welcome one, but it’s not enough.

Kristen Strader, campaign coordinator for Public Citizen, said in a statement that the warning letters do not address the “rampant deception” on social media that is only growing.

Public Citizen, along with Campaign for a Commercial-Free Childhood, and Center for Digital Democracy, found in a report [PDF] earlier this year that nearly every single influencer identified by the FTC continued to post Instagram ads without proper disclosures.

“Until the FTC takes enforcement action against companies that facilitate influencer marketing, or influencers who post undisclosed ads, the culture around influencer marketing on social media will remain as it is – accepted consumer deception on behalf of profit-driven companies, without consequences,” Strader said.