On November 15, the Federal Trade Commission (FTC) sent letters to two food and beverage trade associations and 12 nutrition influencers claiming that the groups failed to adequately disclose paid partnerships in social media posts. The FTC is a federal agency that works to protect consumers from deceptive business practices and unfair methods of competition. The FTC derives authority from the Federal Trade Commission Act (FTCA) which makes it unlawful for “any person, partnership, or corporation to disseminate . . . any false advertisement . . . which is likely to induce . . . the purchase of food.” 15 U.S.C. § 52. Food is defined under the FTCA to include “articles used for food or drink for man or other animals.” 15 U.S.C. § 55(b). In this specific incident, the FTC sent warning letters to both the American Beverage Association (AmeriBev) and the Canadian Sugar Institute (the Institute) along with nutrition influencers who they partnered with to post sponsored ads endorsing the safety of aspartame and promoting the consumption of sugar, respectively. The influencers were registered dietitians, who each have a substantial following on Instagram and TikTok.
American Beverage Association Issue
In the summer of 2023, the World Health Organization (WHO) published findings that cited “limited evidence” of aspartame possibly being carcinogenic to humans. Aspartame is an artificial sweetener used in a variety of foods and beverages, but most widely known for its use in diet drinks. Following the WHO announcement, the hashtag #safetyofaspartame spread on social media, and a number of nutrition influencers, many of whom are registered dieticians, took to Instagram and TikTok to refute the WHO findings. The influencers claimed the WHO findings were “fear mongering headlines” based on “low-quality science,” and affirmed their beliefs in the safety of aspartame. However, a number of the posts failed to mention that they were sponsored by the American Beverage Association (AmeriBev). While some of the social media posts included phrases such as “paid partnerships,” “ad,” or “sponsored,” the posts were not always clear about who the paid partnership was with. Additionally, the FTC took issue with the location of discourse on the posts and the use of only the built-in “paid partnership” tool on the respective social media platform. It is important to note, that though the FDA later made a statement disagreeing with the WHO’s conclusion that aspartame is carcinogenic to humans, the FTC’s letters are taking issue with the influencers’ failure to adequately disclose a paid partnership with AmeriBev, not with the statement of aspartame’s safety itself.
The Canadian Sugar Institute
Similarly, the Institute and two registered dietitian nutrition influencers who have posted content sponsored by the Institute were sent warning letters. These letters expressed concern about adequate disclosure for social media posts promoting the consumption of sugar-containing products. The FTC’s letter took issue with the location of the disclosures on the influencers post – claiming that they were insufficiently conspicuous because viewers would have to click on the post to see the disclosure in the caption. Additionally, the FTC was concerned that the sponsored videos did not include disclosures in the video themselves, did not adequately identify the sponsor of the posts, and only used the built-in “paid partnership” tool on the respective social media platform.
Material connection
The primary issue addressed in the FTC letters sent to the associations and influencers contained warnings about a failure to adequately disclose a material connection between the influencer and the association. Deriving authority from section 5 of the FTCA, which generally prohibits deceptive advertising, the FTC enforces the principle that endorsements must be honest and not misleading. To provide guidance and examples to businesses about what constitutes honest and non-misleading endorsements, the FTC published Guides Concerning Use of Endorsements and Testimonials in Advertising (Endorsement Guides). Under the Endorsement Guides, an endorsement is defined as “any advertising, marketing, or promotional message for a product that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser.” 16 CFR § 255.0(b). The Endorsement Guides mandate that a connection between the endorser and the seller of the advertised product which is not reasonably expected by the audience and might materially affect the credibility of the endorsement must be disclosed clearly and conspicuously. 16 CFR § 255.5(a). Monetary payment is listed as a material connection, and sufficient disclosure requires clear enough communication of the connection that consumers can evaluate its significance.
Here, the FTC takes issue with AmeriBev paying registered dietitian influencers, people that the public would not normally expect to be connected to AmeriBev, to post content endorsing the safety of an artificial sweetener used in a number of AmeriBev’s member’s products. According to the FTC, without a clear disclosure of the connection between AmeriBev and the influencers, a consumer might be materially influenced to trust the advice of the registered dietitian and purchase the product of AmeriBev’s members. Likewise, the FTC is concerned that without adequate disclosure of their connection to the Institute, consumers could be materially influenced by the posts of registered dietitian influencers promoting the consumption of sugar.
Understanding Advertising vs. Labeling
The division of jurisdiction between federal agencies for the regulation of food can be confusing. First, it can be difficult to parse out whether a food product is regulated by the Food and Drug Administration (FDA) or the United States Department of Agriculture (USDA) – which are both federal agencies that regulate food. The FDA regulates 80% of food, while the USDA, under the Food Safety and Inspection Service agency, will regulate meat, poultry, catfish or unshelled-egg products. To learn more about the regulations of food labeling under the FDA and USDA click here to visit the NACL’s Food Labeling Reading Room.
It can also be confusing to determine where the FTC fits into the regulatory scheme. The FTCA gives the FTC the authority to regulate the advertising of food products, but this authority is not extended into the regulation of food labels. The FTC and the FDA have created a Memorandum of Understanding (MOU) to govern their joint jurisdiction over the marketing of foods, drugs, dietary supplements, medical devices, and other health-related products. Under the MOU, the FTC has jurisdiction for all advertising (other than labeling) of foods and exercises primary responsibility for regulating the truth or falsity of the advertising of foods. The FDA has jurisdiction over the labeling of foods and holds the primary responsibility for preventing misbranding of foods.
Next steps for the FTC issue
The letters sent to both AmeriBev and the Institute, contained a statement urging the groups to review their social media policy, and assess social media posts made by endorsers for adequate disclosures of material connections. The letters to the influencers encouraged review of endorsed social media posts and reminders that “violations of the FTC Act may result in legal action.” Each letter also noted that the recipient could face civil penalties of up to $50,120 per violation of future failures to disclose material connections. Additionally, recipients of the letters were given 15 business days to contact FTC staff with their plans to address the stated concerns.
To view the FTC press release click here
To learn more about the FTC’s role in regulating false and misleading food advertisements, click here to read NALC blog post “The Legality of Food Labeling Claims: How Advertisements are Regulated.”
To learn more about the FDA’s role in regulating food labeling claims, click here to read NALC blog post “The Legality of Food Labeling Claims: FDA’s Regulations”