Recently, the Federal Trade Commission (“FTC”) and the U.S. Food & Drug Administration (“FDA”) issued joint warning letters to four sellers of e-liquids, the nicotine “juice” used in vaping regarding their use of social media influencers to advertise their vape products on Instagram, Facebook, and Twitter.
The letters raised three issues with the influencers’ social media posts under both the Federal Food, Drug, and Cosmetic Act (“FD&C Act”) and the FTC Act. The FD&C Act prohibits mislabeling products, and requires certain warnings, including for tobacco products. The FTC Act prohibits misleading advertising, including by requiring disclosure of certain material health or safety risks in advertising.
First, the FDA alleged that the posts violate the FD&C Act by failing to include the required disclosures for e-liquids that the products contain nicotine, and that nicotine is addictive. Second, the FTC alleged that the posts failed to reveal material facts concerning the consequences from customary use of their e-liquids, i.e., that they misled consumers by failing to disclose the risks of nicotine. Third, the FTC also alleged that the social media posts violate the FTC Act by failing to disclose the material connection between the influencers and the brands.
These enforcement activities indicate that the FTC continues to focus on influencer programs with insufficient disclosures. The “material connection” disclosure is one that most brands and influencers are now familiar with, and we have written about previously, requiring that any benefit received by the poster, including traditional payment or free product, be clearly and conspicuously disclosed in unambiguous language.
However, this marks the first time that the FDA and FTC have warned that companies are ultimately responsible to ensure that their influencers’ posts comply with the FD&C Act and FTC Act as they relate to tobacco warnings. This may have ripple effects into other highly regulated industries, or other industries with restrictions on advertising.
In the wake of these warnings, companies should review their written social media policies and agreements with their endorsers to be sure that they have provided appropriate guidance for disclosure of the endorsement relationship as well as any industry-specific rules and regulations pertaining to advertisements. Of course, companies that are not currently providing any written guidance to their endorsers, particularly those in highly-regulated industries, should strongly consider doing so going forward.
As marketing teams continue to try to reach consumers in new and creative ways, brands should be conscious of their obligations to ensure appropriate disclosures and industry-specific labelling in every format and to monitor for compliance.
If you have any questions concerning this or any other issue concerning your business’s marketing efforts, do not hesitate to contact Kate Dennis Nye or another member of Neal Gerber Eisenberg’s Intellectual Property group.
 Celebrities and Influencers Remain Regulator Targets, Neal Gerber Eisenberg Client Alert, February 20, 2019.