If you are a social media influencer, content creator, or brand that works with endorsers, the Federal Trade Commission's Endorsement Guides govern your conduct — whether you know it or not. The FTC updated those Guides in 2023 for the first time since 2009, and the changes are significant. The agency has since issued warning letters, initiated enforcement actions, and made clear that it intends to hold both creators and the brands that pay them accountable for non-compliant disclosures. Understanding what the rules require is no longer optional.
The Legal Foundation: Section 5 of the FTC Act
The FTC's authority over influencer marketing flows from Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices in commerce. The Endorsement Guides — found at 16 C.F.R. Part 255 — are the FTC's interpretation of how Section 5 applies to endorsements and testimonials. While the Guides themselves are not law, they represent the FTC's enforcement position. Violating the Guides creates significant exposure to FTC enforcement action, and the agency has issued Notices of Penalty Offenses to hundreds of companies, meaning those companies can face civil penalties of up to $50,120 per violation for future non-compliance.
When Disclosure Is Required
The core rule is straightforward: if there is a material connection between an endorser and the brand being promoted, and that connection is not something a significant minority of consumers would expect, it must be disclosed. A material connection includes any financial relationship — payment, free products, discounts, commissions, or equity — as well as personal relationships such as being a family member or employee of the brand.
The FTC's 2023 update clarified that even subtle actions can constitute an endorsement. Tagging a brand in a social media post, wearing a brand's product on camera, or including a brand's hashtag in a caption can all qualify as endorsements if the creator has a material connection to the brand. The key question is whether the audience would understand the relationship — and if there is any doubt, disclosure is required.
What "Clear and Conspicuous" Actually Means
The 2023 Guides introduced a formal definition of "clear and conspicuous" that is more demanding than many creators realize. A disclosure is clear and conspicuous only if it is difficult to miss and easily understandable by ordinary consumers. The FTC has specified that this standard requires matching the medium of the endorsement:
- If the endorsement is visual (text, graphics, images), the disclosure must also be visual.
- If the endorsement is audible (video, podcast, live stream), the disclosure must also be audible.
- If the endorsement is both visual and audible, the disclosure must be both visual and audible.
This matching requirement has significant practical implications. A creator who posts a sponsored video and includes a disclosure only in the text caption below the video — not in the video itself — is not in compliance. The FTC has specifically stated that "viewers can easily watch a video without reading disclosures in a post's text." A visual disclosure in a video must be superimposed in text large enough to be read and must appear on screen long enough to be noticed.
What Does Not Work
The FTC has been explicit about disclosure methods that are insufficient. Creators and brands should understand that the following approaches do not satisfy the clear and conspicuous standard:
- Hashtags like #ad, #sponsored, or #partner buried among other hashtags. These are easily missed and do not clearly identify the sponsor.
- Platform-native disclosure tools alone. Instagram's "Paid Partnership" label and similar built-in tools may not be sufficient on their own because they can be missed and do not always clearly identify who is paying.
- Abbreviated or username-based sponsor identification. Referring to a sponsor by a nickname or social media handle rather than their full name does not adequately identify the relationship.
- Disclosure only at the end of a long video. A disclosure that appears after most viewers have stopped watching does not satisfy the standard.
- Disclosure in a collapsed text section. If the disclosure requires a click to reveal, it is not conspicuous.
Who Bears Liability
One of the most important clarifications in the 2023 Guides is the explicit expansion of liability to three categories of parties. Advertisers — the brands paying for the endorsement — bear primary responsibility for ensuring that their influencer campaigns comply with the Guides. Endorsers — the individual creators — can also be held liable if they make misleading statements, falsely claim to have used a product, or fail to disclose material connections despite being on notice of the requirements. Intermediaries — talent agencies, management companies, influencer marketing platforms, and public relations firms — face liability as well if they help create or distribute non-compliant content.
This three-party liability framework means that a brand cannot simply instruct an influencer to disclose and then disclaim responsibility if the influencer fails to do so. Brands must train their influencer partners, monitor their posts, and take corrective action — including requesting removal of non-compliant content — when violations occur.
Platform-Specific Considerations
The FTC's rules apply across all platforms, but the practical implementation varies. On Instagram and TikTok, a verbal disclosure at the beginning of a video combined with a visible on-screen text disclosure satisfies the standard for most sponsored content. On YouTube, a verbal disclosure at the start of the video and a disclosure in the video description are both recommended. On podcasts, a verbal disclosure at the beginning of the episode — not only at the end — is required for sponsored segments. For static posts on any platform, a disclosure at the beginning of the caption (not buried after hashtags) is the safest approach.
If a platform does not provide a mechanism to make a clear and conspicuous disclosure, the FTC's position is that the platform should not be used for that sponsored content.
Affiliate Marketing and Commission-Based Arrangements
Affiliate marketing — where a creator earns a commission for each sale generated through their unique link or code — is subject to the same disclosure requirements as direct payment arrangements. The fact that the creator only earns money if someone makes a purchase does not eliminate the material connection. A disclosure such as "I earn a commission if you purchase through this link" placed clearly and conspicuously near the link satisfies the requirement.
Recent Enforcement Actions
The FTC's enforcement activity following the 2023 update has been meaningful. In November 2023, the agency sent warning letters to the American Beverage Association, the Canadian Sugar Institute, and 12 health influencers who had been paid to promote aspartame and sugar products on Instagram and TikTok without adequate disclosures. The letters identified specific violations — including disclosures made only in text captions rather than in videos, use of hashtags like "#sponsored" without identifying the sponsor, and reliance on platform-native tools that did not meet the clear and conspicuous standard. The FTC explicitly warned that failure to address the violations could result in a federal injunction or a cease and desist order, and that future violations could trigger civil penalties of up to $50,120 per violation.
NIL Deals and FTC Compliance
For athletes and other public figures entering NIL agreements, FTC compliance is an additional layer of obligation that sits alongside NCAA, conference, and institutional rules. An athlete who posts sponsored content without a compliant disclosure is not only potentially violating FTC rules — they may also be creating contractual liability to the brand if the agreement required compliant disclosures. NIL agreements should address FTC compliance obligations explicitly, and athletes should understand what those obligations require before they post.
Counsel for Influencers, Athletes, and Brands
The Law Office of Carl G. Hawkins, PLLC advises influencers, athletes, content creators, and brands on FTC disclosure compliance, NIL agreement review, and endorsement contract structuring. If you are entering into a brand partnership or reviewing an influencer agreement, contact the firm before you sign or post.
Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship. For advice specific to your situation, please consult a licensed attorney.