Top 2 Legal Requirements for Social Media Advertising

Salma Benkabbou

The Millennial Business Lawyer®

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social media
Top 2 Legal Requirements for Social Media Advertising 1

What is the use of social media?

Social media is an easy and effective medium to target direct consumers in a cost effective way. Many companies are taking advantage of the advertising benefits offered by social media. 

These platforms provide a simpler and cheaper way to market products and services to a much larger audience. Yet, not all businesses realize that these advertisements must abide by the same laws as conventional ads on television or other platforms.

In addition to community guidelines and terms of use of a social media platform, businesses must also comply with Federal Trade Commission (“FTC”) regulations that govern advertising practices. 

Advertising regulations are not only contingent on FTC regulations, additional regulations can be implicated depending on the industry of the service or product being advertised. For example, if a business sells cosmetic products,

it must also comply with the regulations set forth by the Food and Drug Administration (“FDA”) for its labeling practices. 

A business should always consult with a business lawyer regarding its business practices before going to market to avoid noncompliance of the applicable regulations.

The advertising regulations are not limited to conventional advertisements, they are applicable to all advertising practices, inclusive of unconventional social media and other digital advertising. A company should never get comfortable with the casual atmosphere of the social media platforms, the strict requirements still apply.

To avoid hefty fines for noncompliance, a business should take heed to the applicable regulations when creating any advertisement content.

What legal requirements do I need to follow when creating ads for social media?

At the bare minimum, there are two strict requirements that every company must follow in their advertising practices: (1) substantiation; and (2) clear and conspicuous disclosures.

1. Substantiation

Substantiation is just a fancy way of saying that any statements made in the advertisement regarding a product or service are in fact true. Of course, sometimes it may be difficult to confirm the truth of some claims, but they still must have a reasonable basis in substantiation. 

In other words, advertisements cannot include statements about the product or service that are known by the advertiser to be false. This regulation applies to expressed claims, as well as claims that the advertisement could imply. Even if all claims in an advertisement are completely truthful, problems could still arise if these truthful claims lead consumers to believe something that is incorrect. 

For example, if your skincare product does not reverse the anti-aging process in thirty (30) days, your advertisement should not include statements stating so if your company does not have scientific research stipulating to such results. Additionally, if you use reviews as advertising content, then a reviewer who has perfect skin prior to their use of a product, their review should not state that the product resulted in their perfect skin. Moreover, the reviewer should not provide a review if they did not in fact use the product.

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"Advertisements cannot include statements about the product that are known by the advertiser to be false."

With that said, before publishing the advertisement, pose the following question: can your company support every conclusion that a consumer can draw from the advertisement about the product or service? If the answer is no or even maybe, then the advertisement fails to comply with the strict substantiation requirement. So, it is always advisable that you reassess and change the content of the advertisement until you can confidently answer the question in the affirmative. 

It is important to note when answering that question, you should put yourself in the same place as the consumer viewing the advertisement for the first time. Look at the ad as if you have no prior knowledge of the advertised products or services. Courts and other regulatory agencies will use the same standard to analyze the advertisement’s compliance with the substantiation requirement.

Specifically, the Courts use the following 6 factors* to determine whether an advertisement claim can be substantiated:

1. The type of product or service being sold.

4. The consequences of a false claim.

2. The ease of developing substantiation for the claim.

5. The consumers’ benefits from a truthful claim.

3. The type of sales claims being made about the products or services.

6. The amount of substantiation that experts in the field consider reasonable.

*These six (6) factors have been explained by case law as a result of a multitude of contentious litigation. Do not rely on your lay understanding of these factors.

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When an advertisement is challenged on the basis of false or misleading claims, the last factor is typically the most important. What is considered reasonable is often unclear and will be the main point of contention in litigation. 

Also, there are distinct levels of substantiation requirements depending on the complexity of the claim. For example, a claim that an airline has the most flights out of a certain city only needs numerical data to prove its correctness. But a claim that a laundry detergent is more effective at removing stains than its competitor requires a higher degree of proof. The latter example would be considered a complex claim and as

such would require scientific research with data evidencing the truth of the claim to meet the substantiation requirement. 

Sometimes companies may be able to use an industry-standard test to determine the accuracy of an advertisement’s claims. However, if there are no industry standards upon which a company can rely, the claims must be substantiated with independent scientific tests. Performing independent research and testing is not a card blanche to skew the testing in the company’s favor to make inaccurate claims. Like any other scientific test, the independent test must be realistic, repeatable, and the results produced must be statistically significant. 

2. Clear and Conspicuous Disclosures

Depending on the product or the service being advertised or the manner in which a product or service is being advertised, there may be an additional requirement for disclosure compliance. 

For example, if a product has side effects or should be used in a certain way to prevent injury, then the advertisement’s content should disclose such information. Additionally, if your advertising content is a review by an influencer, the content they publish must provide that it is an ad or paid sponsorship ad to meet the disclosure requirement of the review. 

While there is no legally required font size, color, or placement, a little common sense goes a long way. The disclosures must be presented in a manner that is easy for consumers to find and read. So, for the influencer advertisement example, the disclosure should be in the first 3 lines of the copy on an Instagram post and not hidden in the comments section or as a hashtag amongst 30 other hashtags.

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HERE ARE 4 TIPS FOR PROPER DISCLOSURES

  • Make sure that the disclosure is close to the claim it modifies. A disclosure at the bottom of the page that requires consumers to scroll all the way down is not considered clear and conspicuous. 
  • Disclosures should be in a location that is easily found by consumers. As stated above, disclosures in a caption should be “above the fold” so that consumers do not have to expand the description to find the disclosure. 
  • The font size and color must be easy to read. 
  • Use common sense regarding the conspicuous placement of the disclosure.

It is important to note, the limited space provided by some social media sites which can make conspicuous placement of disclosures in advertisements difficult is not an excuse for noncompliance.

"MUST BE PRESENTED IN A MANNER THAT IS EASY FOR CONSUMERS TO FIND AND READ."

Therefore, if a platform does not allow enough space to disclose information, then your company should not run ads on that social media platform. In some cases, advertisers can include a hyperlink to the necessary disclosures if there is not enough space. Still, this hyperlink must be in a clear and conspicuous location and must take consumers directly to the page with the disclosure. It is always advisable to consult with a business attorney who can assist you with compliance with the regulations. The regulations can be confusing and we discourage any company from applying their lay understanding of the regulations. 

The two legal advertising regulations stated above are not the end-all and be all of the advertising regulations. Additional regulations may be implicated depending on the service or product being advertised.

WHAT IS THE BOTTOM LINE TO SOCIAL MEDIA ADVERTISING?

  • Be honest with the claims made about your products or services. 
  • Place disclosures in a clear and conspicuous manner to prevent misleading advertisements.
  • Hire a business lawyer to assist you with compliance.

If you want to learn more about other legal topics, feel free to check out our Articles page on our site.

ABOUT THE BENKABBOU LAW FIRM

The Benkabbou Law Firm, PLLC, is a boutique law firm located in Tampa, Florida. Our firm focuses on business law, immigration law, business immigration law, and intellectual property law. At our firm, we treat our clients like family and treat their interests and dreams as our own.

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