FTC Enforcement Action Against Social Media Influencers

The Federal Trade Commission has finally settled its first ever complaint against a social media influencer. Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell are social media influencers who are popular in the online gaming community.  They have settled charges that they deceptively endorsed the online gambling service CSGO Lotto, while failing to disclose they jointly owned the company. Additionally, they also allegedly paid others thousands of dollars to promote the site on YouTube, Twitch, Twitter, and Facebook, without requiring them to disclose the payments in their social media posts.

The long time dirty secret that lawyers and agents don’t talk about is that entertainers and athletes who have a large social media following are making millions of dollars per year by endorsing goods and services without properly disclosing that they are being paid to do so.  As long as everyone gets paid nobody contacts the FTC and the public doesn’t know that a particular video or a Tweet was actually an endorsement.

While I applaud the FTC’s action in this case, the agency is currently under staffed and has only 2 of 5 commissioner seats filled. While the FTC is watching this area for future enforcement actions, it currently pays to intentionally not abide by the FTC’s online endorsement guide.  When it comes to the online endorsement world, it is worth it economically for marketers to try to make posts seem “authentic” and “real” even though they were paid for by a third party.