Author argues that FTC disclosure rules may infringe upon endorsers’ right to free speech.
For millions of users around the world, posting a photo of a product on Instagram merely requires pressing a few buttons on their phone screens. But for many celebrities, such an action requires some more thought. By endorsing a product on Instagram, a celebrity may need to consider Federal Trade Commission (FTC) regulations because the agency requires an endorser who has a “relationship with a company” to disclose that relationship when posting about the company’s product online.
The FTC, however, may be violating endorsers’ First Amendment rights, according to a recent paper. Lauren Myers, an associate at Kelly Drye & Warren LLP, insists that the disclosure requirement “chills” free speech in the context of “inherently personal” social media posts. To remedy the FTC’s overreach, Myers urges the FTC to evaluate whether the endorser intended the online post as commercial speech, not—as the FTC’s current guidelines instruct—whether the audience understood the post as commercial.
Although the First Amendment protects noncommercial speech, commercial speech requires less constitutional protection. To define commercial speech, Myers points to several U.S. Supreme Court rulings. The Court has held that commercial speech may consist of an invitation to participate in “a commercial transaction,” such as an advertisement. The Court has also held that commercial speech occurs when the speaker admits the speech is an advertisement, speaks about a certain product, and would receive payment for selling the product.
Instagram posts, however, occupy “a realm in which the lines between advertisement and entertainment blur,” which, according to Myers, results in “blurring between commercial and noncommercial speech.”
As an example of this blurring, Myers cites an FTC lawsuit against clothing company Lord & Taylor over the company’s program to promote a new dress through Instagram endorsers. The endorsers had linked to Lord & Taylor’s Instagram page, added a hashtag that called viewers’ attention to the brand, and allowed Lord & Taylor to alter the posts’ captions. Nevertheless, the FTC subsequently asserted that the company did not meet the agency’s regulatory standards: The posts deceived customers because the posts failed to disclose that they were paid advertisements for Lord & Taylor.
On the other hand, Myers calls the commerciality of the endorsers’ behavior “questionable.” She maintains that the posts “could express a variety of things, from enjoying a sunny day to highlighting the shoes the poster was wearing,” and might not necessarily constitute commercial speech.
In fact, Myers claims that many Instagram posts do not fall within the Supreme Court’s understanding of commercial speech. For instance, Myers argues that an endorser’s post that contains a link to Lord & Taylor’s own Instagram page does not necessarily suggest a “commercial transaction.” Since the viewer must make many navigations away from Lord & Taylor’s Instagram platform to buy the item in the endorser’s picture, the chain of acts between viewing and purchasing is too long for the endorser’s post to qualify as an invitation to participate in a transaction.
To create a clear framework for determining whether the FTC may regulate endorsers’ posts of companies’ products, Myers proposes a test under which the FTC would examine the facts of each post individually to see if the celebrity intended for the post to be commercial speech. Myers’s proposed framework would not only prevent the FTC from improperly policing Instagram posts but would also avoid chilling speech, since celebrities could then post whatever they wanted, but would understand which posts merit disclosure.
Focusing on the endorser’s intent would reveal commercial speech in Instagram posts more readily. To ascertain the endorser’s intent, Myers recommends that the FTC examine any contract between the endorser and the company. A contract can reveal whether the company pays the endorser for her product promotion, and the terms of the contract may also mention certain products. Therefore, an endorser’s contract with a company may contain provisions that indicate commercial speech. Further, a celebrity who intends her post to advertise a product acknowledges that her speech is an advertisement and also invites a transaction, both of which tend to signal commercial speech.
As another way of determining the endorser’s intent, Myers suggests that the FTC could also consider “the commentary provided by the poster in relation to the photograph.” If the celebrity posting the picture advises her viewers to buy the product in her post, or if she provides instructions on how to buy the product, the post would probably count as commercial speech.
Ultimately, Myers asserts that her approach is a sensible solution to the First Amendment implications of FTC regulations. The FTC asks too much of its endorsers by requiring them to figure out “all possible responses that an audience may have to the post” to determine the commerciality of the post. Myers says that her focus on the endorser’s intent eliminates this “impractical expectation.”
Myers’s paper appeared in the Duke Law Journal.
