The FTC has issued guidance in its Endorsement FAQ that likes, shares, and comments are considered endorsements and marketers who encourage them may trigger the need for disclosure on the part of the endorser. The FTC talks about space-limited tools and calls out the Facebook "like" buttons and has this to say:
Advertisers shouldn’t encourage endorsements using features that don’t allow for clear and conspicuous disclosures.
A strict reading of the FAQ indicates that the FTC wants all companies in the US, not just pharmaceutical manufacturers, to refrain from encouraging consumers to use space-limited social media to show their support. In other words marketers can’t ask consumers to “like” their page.
Further to this, the FTC seems to be saying that since some social media users will receive rewards for being influential, marketers can’t ask anyone to like their page.
Other guidance, both updated and pre-existing, in the updated FAQ includes:
- Social interaction for a future discount or “a sweepstakes for a significant prize” requires a disclosure. This implies that social interaction is only safe when the marketer has not offered a reward and puts the onus on the social media users to determine when it is safe.
- Faking “likes,” and presumably followers, is considered false advertising by the FTC and “could face enforcement action.” (We’re looking at you, Twitter spammers -Ed.)
- Paid endorsers need to add a disclosure even on short form channels like Twitter. The FTC suggests using the words sponsored, promotion, or paid ad. They even note that hashtags such as #ad might be enough.
- The FTC says there is no “one click rule” for disclosures. They need to be in proximity to the statements made by the paid spokesperson or rewarded social media user.
- Entering users in a sweepstakes for using a hashtag is specifically called out as needing disclosure and the FTC recommends putting it inside the hashtag itself. So a contest for the Klick Wire should use #KlickWireContest rather than just #KlickWire (oops -Ed.).
- Employee endorsements have their own section in the FAQ. It is allowed but employees do need to disclose their employment relationship in proximity to the statement (not just on their profile).
Working against the strict interpretation of the FAQ is that it almost reads like a stream of consciousness and questions itself:
However, we don’t know at this time how much stock social network users put into “likes” when deciding to patronize a business, so the failure to disclose that the people giving “likes” received an incentive might not be a problem.
Source: FTC FAQ