For startups, social media can offer cheap and effective publicity. Startups must also be mindful that any advertising, including on social media, will require you to comply with federal regulations. While sponsored content regulations once went largely unenforced against social media based advertising, times are changing. Advertising on social media is increasingly drawing the eye of regulators. Federal Trade Commission (FTC) regulations demand honesty and transparency in advertising, and fortunately, honesty and transparency will keep your company compliant.

In 2016, the FTC sued retailer Lord & Taylor alleging the company paid online influencers to post pictures of themselves wearing a specific Lord & Taylor article of clothing. The posts failed to disclose Lord & Taylor provided the clothing for free and paid each influencer thousands of dollars.  Lord & Taylor also paid for a positive review in the online publication Nylon that appeared without notice it was a paid promotion. The product sold out quickly, but the FTC sued Lord & Taylor. The case ultimately settled, and the settlement will affect Lord & Taylor for up to twenty years.  Lord & Taylor did not make the posts that got them into trouble; they only failed to require the influencers to disclose their relationship with Lord & Taylor. Your company is responsible for others’ posts if you pay for the posts—tracking paid posts to ensure regulatory compliance is obligatory.
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Husch Blackwell’s Caroline Chicoine is the current Vice Chair of the International Trademark Association’s (INTA) Impact Studies committee. Recently, she helped the committee finish the term strong with two important studies regarding Generation Z and the economic impact of trademark-intensive industries in Latin America.

Do Gen Zers make up a big part of your customer base? Gen Zers will make up the largest group of consumers worldwide by 2020. These consumers were born between 1995 and 2010 and are currently between 18 and 23 years of age. If you find your customer base consists of Gen Zers, the International Trademark Association’s Impact Studies committee’s recent study, titled “Gen Z Insights: Brands and Counterfeit Products” is a must-read. The multi-country study investigates the behavior of Gen Zers when it comes to their relationship with brands and attitudes toward counterfeit products. A copy of the Comprehensive Global Report covering ten (10) countries around the world, as well as reports for each country can be found here. For a comprehensive global infographic summarizing the results of the study, see here.
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