Legal Articles

FTC Investigates Advertising Practices On Social Media

The FTC investigates advertising practices on social media - orders made to various social media platforms in response to allegations of elevated fraud.

On March 16, 2023, triggered by allegations of “surging” levels of fraud, the Federal Trade Commission (FTC), investigates advertising practices on social media platforms. They ordered several major social media platforms (i.e., TikTok, Discord, Facebook, Reddit, Snapchat, Twitter, Twitch and YouTube) to submit comprehensive reports on the placement and oversight of advertisements on their respective platforms as well as the procedures they use to identify commercial advertising.

Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, stated that social media has been a source of profit for scammers who promote fraudulent products to consumers. He further noted that the information requested by the FTC is intended to guarantee companies operating these platforms are taking all necessary measures to prevent scams and deceptive advertisements.

The reports will provide information gathered between 2019 and 2023 in order for the FTC to analyze relevant business conduct since the onset of the COVID-19 pandemic.

The FTC declared that the aim of the study was to gain a better comprehension of the frequency of deceptive advertising on social media and video streaming platforms, as well as those consumers who may be impacted by such advertising, together with how efficiently the social media giants oversee their advertisers.

The FTC will also determine whether the companies differentiate their advertisements based on language spoken by their target audiences.

Additionally, the FTC will be examining how these platforms generate, monitor, and classify ads, as well as what formats are available for advertisers, including shopping ads that allow customers to purchase items or services directly from the advertisement.

FTC conducting a study by obtaining reports from several social media platforms, about their advertising practices. Image shows hand on iPad with four arrows pointing down to four different icons of different concepts of report analysis data.

How do the Orders Affect Social Media Marketers?

The FTC’s recent orders are part of an effort to revise their consumer protection agenda. This includes a series of regulations and modifications to existing advertising guidelines. Upon receipt, the reports may lead to further changes that could potentially impact companies that advertise on social media platforms.

Why is Compliance Important for Advertisers?

As social media becomes an increasingly popular platform for advertising, it is important for businesses to follow best practices in order to ensure that their advertising is both effective and compliant with regulations set by the FTC. Following best advertising practices on social media is important for several reasons. Firstly, it ensures that your advertising is effective and reaches your target audience. Secondly, it helps to maintain a positive reputation for your business by avoiding negative consequences such as being blacklisted by ISPs and email providers. Lastly, it helps to ensure compliance with FTC regulations and avoid legal issues.

What Are the Best Advertising Practices On Social Media?

The best advertising practices on social media include:

  • Being transparent and honest: Businesses should disclose sponsored content or endorsements using clear and visible disclosures such as the hashtag #ad or #sponsored.
  • Being truthful and not misleading: Businesses should ensure that their advertising is truthful and not misleading, with evidence to back up any claims made.
  • Making disclosures clear and conspicuous: Disclosures should be easy to understand and visible to consumers. They should not be hidden or difficult to find.

How Can The Blacklist Alliance Help with Advertising Practices On Social Media?

The Blacklist Alliance can help businesses with their advertising practices on social media by providing guidance and support to ensure compliance with FTC regulations. They have compliance courses designed for you and your employees on practices that may otherwise be too broad to understand all on your own. The Blacklist Alliance experts work around the clock to ensure up-to-date compliance and news on all new laws to keep your business protected before it gets targeted for litigation.