FTC Slams Lord & Taylor

0 Flares Twitter 0 Facebook 0 Google+ 0 LinkedIn 0 Email -- 0 Flares ×

FTC Slams Lord & Taylor for Not Disclosing Paid Social Posts and Native Ads

The Federal Trade Commission's decision to crack down on Lord & Taylor for failing to reveal its relationships with paid promoters may change native ads and influencer-driven social media marketing as we know it.

In short, social media no longer translates to a free lunch. Ron Urbach, chairman of Davis & Gilbert LLP, summarized the central challenge: “Advertisers need to remember that they cannot delegate their responsibility to publishers or other parties,” he told Adweek. “It is the advertiser who must ensure compliance. How does an advertiser comply in a world of real-time social and digital advertising?”

Lord & Taylor just learned the answer to that question the hard way. In March 2015, it scored a social media coup after 50 Instagram stars wore the same dress on the same day, and the item in question quickly sold out.

Closer examination, however, revealed that none of those influencers disclosed the fact that the brand had paid them to wear the dress as part of a coordinated effort to promote its spring line. Nylon magazine even ran a full article and an Instagram post featuring the item, leading Adweek to question whether the campaign had blatantly thumbed its nose at FTC disclosure rules regarding sponsored content.

“There was no indication that this was paid content in Nylon,” Engle said, adding that the FTC wants to make sure businesses understand that its 2009 endorsement guidelines also apply to paid social media campaigns.

Experts believe the decision will weigh heavily on the future of native ads. “This was the perfect storm for the FTC in that it encompassed the two hottest issues in social media: compliance with endorsement guides and the newly issued native advertising guide,” said Linda Goldstein, chair of the advertising, marketing and media division at New York law firm Manatt Phelps & Phillips.

“From the FTC's perspective,” she added, “it was a good case to bring in that it was not about how or where disclosures were made but the fact that they were not made at all.”

The company will now be forced to launch an internal monitoring program. Engle said Lord & Taylor “has to submit a report to the FTC that demonstrates how they're complying with the order.”

“This action sends a very clear message to the marketing industry that the FTC is watching native ads and will pursue enforcement actions where necessary disclosures are not made,” Goldstein said. She called the news “a warning sign” and noted that companies like Lord & Taylor may face significant fines if they repeat such offenses.

“I would not minimize the impact of the order on Lord & Taylor or any other business because it does operate as something of a noose around the neck of the business,” she said. “They will have to be uber compliant in the future in ensuring that their campaigns comply with the provisions.”

Urbach said, “With native advertising becoming even more important, I predict that this case is the first of more to come.”

Read full article and learn more about Native Advertising and Deceptive Advertising here.

Here’s How To Make Sure You,
Your Business & Website Is FTC Compliant

By now it should be clear how important it is for you to be FTC compliant. But how can you do that without spending $7,500-$8,000 or more on Internet Attorneys?

Smart business owners around the world are doing it with the help of FTC Guardian.

FTC Guardian is a service that is 100% focused on helping to keep you get and stay FTC compliant and fully protected. And right now, we are offering a free training to give you the knowledge, information, and guidance that you need to stay out of trouble with the Federal Trade Commission.

The training is titled: 3 Tragic (Legal) Privacy Policy List Building Mistakes That Can Get You In Hot Water With The FTC Today – Resulting In Your Business Being Shut Down… And How To Solve It!

Here are some of the things you’ll discover on the training:

  • Real-Life Examples of People Who Didn’t Think They Were At Risk, But Who Got Nailed By The FTC, And Why It Could Happen To You, Too
  • Why 2014 Was a Significant Year For Online Businesses, And Why You Should Be Worried!
  • The 3 Enormous Powers The FTC Has That Can Change Your Life – And Your Family’s Life – Forever!
  • How to Avoid FTC Claims When Collecting Leads With Optin Forms
  • 3 Privacy Policy Mistakes Every Digital Marketer Is Making, And Why You're In The FTC Crosshairs.
  • And Much More…

Remember: legal protection is a massively important part of your business, and it’s one you cannot afford to ignore any longer.

Go here to register for our next FREE training and make your business is FTC compliant today!

Disclaimer:  This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.

0 Flares Twitter 0 Facebook 0 Google+ 0 LinkedIn 0 Email -- 0 Flares ×