What if you had to tell your followers how much money you received for a sponsored post?

This is what one public commenter suggested when the Federal Trade Commission (FTC) sought public comment on, among other things, the material connections section of the Endorsement Guides in 2020. The commenter requested that the Endorsement Guides require influencers to state the amount of their compensation because it will help “star-struck consumers appreciate the lack of honesty in celebrity posts”.

In the most recent round of public comments on the Endorsement Guides (which recently ended on September 26, 2022), another commenter warned that disclosing exact compensation could create an enormous safety risk to influencers.

The FTC has taken the position that the disclosure of a material connection does not require the complete details of the connection, but it must clearly communicate the nature of the connection sufficiently for consumers to evaluate its significance. Note that the SEC takes a different approach where influencers promote investment opportunities, including crypto asset securities, in which case the influencer must disclose the nature, source and amount of any compensation received in exchange for the promotion (see here).

If you have questions on material connection disclosures, please reach out to Lauren Carey.