PR firm Creaxion Corporation and Inside Publications, LLC settled with the Federal Trade Commission (FTC) this week regarding promotional practices for Creaxion’s mosquito repellent. In its complaint, the FTC alleged that Creaxion planned a media campaign around its launch of the mosquito repellent during the Zika virus outbreak tied to the 2016 Summer Olympics. They engaged Inside Publications, which publishes Inside Gymnastics magazine, to help advertise the product – including the use of athlete endorsers.

Creaxion worked with two gold medalists to endorse their product (example is set forth below). Although each posted on social media endorsing the repellent, both failed to disclose their material connection to the advertiser. Inside Publications reposted the athlete endorsements but also failed to include any disclosures.

Based on this activity, the FTC argued that Creaxion and Inside Publications violated the FTC Act by (i) misrepresenting endorsements as independent opinions of impartial consumers, (ii) failing to disclose that the endorsers were paid or reimbursed, and (iii) misrepresenting that paid ads in Inside Publications were impartial opinions and statements.

The FTC’s order, in part, prohibits both companies from misrepresenting endorsers as impartial consumers and includes steps regarding compliance with online endorsers. Specifically, the companies must notify endorsers of their disclosure responsibilities, create a monitoring system and ensure compliance, and terminate any business relationship with a non-compliant endorser.

TAKEAWAY: This matter reinforces the FTC’s position regarding compliance requirements for endorsers – advertisers must ensure that endorsers are aware of their requirements, must monitor endorsers to ensure compliance, and ask endorsers to take down or fix non-compliant posts. Advertisers cannot get around these requirements simply by mischaracterizing an endorsement as an impartial review.