Are YouTubers bound by FTC guidelines on Endorsements? (YouTuber Law #47)


Many articles were written over the past six months claiming that YouTubers and online Influencers violated the law by failing to disclose paid reviews. Many inserted the names of famous YouTubers, like PewDiePie, into the titles of their articles and tags in order to drive clicks. The reality is that these articles often did little research of the law, glossed over facts, didn’t explain the difference between guidelines and laws, didn’t compare changes in FTC opinions over time and relied on click-bait.

It is important that YouTubers understand the laws that guide their craft. But its also important that they don’t driven by fear and misconceptions. So to put things into perspective, in this article I try to focus a little bit on the relationship between YouTubers and the FTC (Federal Trade Commission). Specifically with respect to the guidelines published by the FTC as they relate to opinions, reviews and testimonials published on YouTube.

 

When YouTubers think of the FTC (if they ever do) its in relationship to guidelines the FTC has published about endorsements and testimonials. These published guidelines provide some context through which YouTubers can understand their responsibilities vs-a-vis their audience. The guidelines set some basic parameters around how to properly disclose relationships they may have with sponsors, advertisers or benefactors.

But are these guidelines laws? Many believe that the FTC passes and amends laws as reflected in these guidelines. That’s understandable. For many YouTubers, these guidelines represent their only interaction with any law as its related to their videos. But the fact is … these guideline are not laws. The FTC is a government agency. It’s not legislative. The FTC’s job is to enforce laws. Not write laws. Only Congress can pass laws.

But can the FTC interpret the laws? Well ... everyone can interpret laws, but only the Court’s opinion as to such interpretation may serve as legal precedent. Now … all laws lack adequate specificity. If you pass a law today, how relevant will it be in 10 years? And any agency, such as the FTC, still empowered to enforce such laws has to adapt and try its best to act in accordance with such laws. So yes, the FTC interprets laws if only so that it is able to enforce them in a changing environment. That does not mean that the FTC’s interpretation is valid or that it is legally binding.

The FTC’s job is to enforce the laws with regard to, among other things, truth in advertising. To accomplish that, the FTC examines pre-existing laws passed by Congress and lend their non-binding interpretations to it. The key to this is non-binding. They don’t get to decide what the law is. They don’t get to decide if the laws should be changed. They can only enforce the laws, but in order to enforce the laws, they need to interpret them. They need to decide what the law as written means when it comes to new technologies, new media and new forms of expression.

When, as the FTC sees it, anyone, such as advertisers, act in violation of the law, they cannot issue fines or penalize anyone. They have to file action in court. And it is up to the court to then decide if anyone violated the law. The FTC explains to the judge their interpretation of the law, but that interpretation is not binding. It might be persuasive to the judge but it is not law.

So … when the FTC discusses proper disclosures by YouTubers in its guidelines, its telling us what its interpretation of the law is. That’s important. Since the FTC is likely to pursue legal action in court based on its own interpretation of the law, we should all pay attention. While the guidelines are not laws, they give us a good idea of how the FTC is likely to follow up on complaints.

But it is a little more than that. The guidelines are not just the FTC’s interpretation of the law, it is the agency’s current interpretation of the law. Meaning … it can and does change over time. The FTC is telling us how it sees the current state of the law with respect to issues it sees in front of it. But that tells us little about how it may see the same issues when facing new technologies. And that is if fact what happened.

When PewDiePie said in his video response to the media that he complied with the rules on disclosure, he was absolutely correct. The original guidelines were publishes in 2009. In 2015, the FTC updated the Q&A on its guidelines. These Q&A, entitled “The FTC’s Endorsement Guides: What People Are Asking,” provides answers to general questions posed to the FTC about its guidelines.

As you can imagine, the FTC has had some time to think about how their guidelines apply to YouTube videos since 2009. And these new Q&As, are not necessarily consist with the FTC’s opinion in 2009. They don’t have to be.

For example, since 2009, the FTC’s opinion held that disclosures as to sponsors and advertisers should be made in written form and placed within logical distance of the written endorsements. But what does that mean for YouTube videos? It is absolutely consistent with pre-2015 guidelines that a YouTuber should place his disclosures in the video’s description at a location after a corresponding endorsement. And to be honest, that was the advice I gave my clients as well. The minimum disclosure required, as interpreted by the FTC pre 2015, was their inclusion in the video’s description.

But in 2015, the FTC changed their opinion. Today, according to the FTC, disclosures when included in a video’s description is no longer sufficient. Now disclosures must be made from within the video in some visual and/or audio format. That’s a big change. Did the law change? No. Did a court rule on a particular interpretation of the law? No. The FTC merely published a Q&A document expressing their changing opinion.

If the FTC’s guidelines were in fact law, adherence to prior guidelines would have insulated YouTubers from any liability for disclosures made prior to 2015. But since guidelines are only opinions, the FTC can hold that YouTubers were non-complaint all along.

So PewDiePie was correct. He did comply with the FTC’s opinions as they existed prior to 2015. The FTC, however, doesn’t have to be consistent or comprehensive. The FTC doesn’t have to give any advertiser a pass because they complied with its prior opinions.

What does that mean for the ret of us? It means we need to use the guidelines as …. well… guidelines. Not laws which must be strictly complied with.

The guidelines, at their core, reinforce basic truth-in-advertising principles that say that endorsements must be honest and not misleading. The court will look at that idea of “honest and not misleading” in a particular context. Their interpretation and their decision to prosecute will not be based on whether you included a disclaimer. It will be based on whether “a significant minority” of viewers would have expected a connection between the YouTuber and the advertiser/sponsor.

That means that sometimes including a disclosure with your video will not be sufficient. It’s up to you to decide. Relying on the FTC’s guidelines is not a defense. The FTC’s opinion is just there to provide you some direction.

Lior Leser, Esq.
Technology, Internet and Software Law

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