Celebrity Tweeters Beware: The FTC is Watching...

Attention Kim Kardashian and other celebrity tweeters, and the brands that employ them: the Federal Trade Commission (FTC) is watching your tweets for violations of its new strict social media regulations.

“With celebrities such as Kim Kardashian reportedly earning as much as $10,000 per tweet for product endorsements, social media has become very profitable for many,” says Alan Friel, a partner in the Advertising, Marketing and Promotions practice at Wildman, Harrold, Allen & Dixon LLP (Los Angeles).  “However, celebrities, along with their talent agencies, managers, and publicists, must be sure to follow the FTC’s new rules for social media advertising or risk fines and potential law suits.”

Kardashian has been named in a lawsuit brought by the company behind The Cookie Diet for tweets making disparaging comments about the diet program without disclosing she is a paid spokesperson for competitor QuickTrim.

The FTC recently opened and shut an investigation against retailer Ann Taylor for giving gifts to consumers to blog about the store’s products without ensuring proper disclosures of the connection and consideration. Ann Taylor got off without a fine, but according to Friel, typically the FTC takes an educational approach initially and then ramps up fines. So, the next FTC targets may become the examples.

“The FTC is serious about enforcing its new regulations for social media, particularly when it comes to celebrities disclosing all material connections to the companies they write about on Twitter, Facebook, MySpace or their blogs or appear on talk shows,” says Friel.  “With respect to celebrities, the FTC now requires them to disclose sponsor relationships when promoting products on talk shows or in social media, finding that consumers would not necessarily assume they have been paid or received something of value such as they would when a celebrity appears in an ad or a television commercial (where disclosure is not required).” According to Friel, the FTC can impose liability on the celebrity spokespersons if the endorser makes statements, even if scripted and contractually required to be read, he personally makes contrary to “what he observed with his own eyes, not for things outside of his control” or that he should know are exceptional or unlikely. Talent representatives need to beware and address these issues in the talent agreements with advertisers.

Friel is available for interviews to discuss what celebrities, talent agents, managers and publicists need to know about the FTC’s strict new regulations for social media, its aggressive enforcement agenda, and how to ensure compliance.  He is also available to write on the topic and seeks a publishing opportunity specifically related to celebrity issues and the new rules.  [05/24/2010]