- A consumer advocacy group is urging US regulators to investigate Amazon over undisclosed influencer endorsements during Prime Day this year.
- Washington DC-based group Public Citizen said that in a “great number of cases,” influencers did not let people know they were getting commission for their endorsements.
- Federal Trade Commission guidelines suggest that companies should monitor influencers who are endorsing products on their behalf and “deal” with those not being transparent.
- Visit Business Insider’s homepage for more stories.
A consumer advocacy group is asking US regulators to investigate Amazon, alleging that some of its influencers did no correctly disclose that they were being paid for endorsing Prime Day deals.
Washington DC-based group Public Citizen said in a letter to the Federal Trade Commission this week that “in a great number of cases” the endorsement relationship was not communicated to customers.
Specifically, it said 15 web stories and 53 Instagram postings had no disclosure on them. Public Citizen did not name the individuals or websites involved.
“Amazon has colonised huge swaths of the internet and people’s social media feeds, turning them into platforms for Amazon’s disguised advertising, in violation of a core principle of fair advertising law,” Public Citizen President Robert Weissman said in a press statement accompanying the complaint.
“When people see a recommendation for an Amazon Prime Day ‘best buy,’ they have a right to know if the person or company making that recommendation is getting a cut on the sales it is generating – but all too often that information is not disclosed.”
While Amazon does instruct its “associates” (the network of people who promote products and earn a commission on sales) to disclose their relationship with Amazon, Public Citizen said that this instruction is not prominent enough on Amazon’s website.
Moreover, Public Citizen said Amazon’s suggested phrasing for how paid endorsers should communicate their relationship with Amazon to customers is confusing.
Amazon recommends the following, or something similar: “As an Amazon Associate I earn from qualifying purchases.”
Public Citizen suggested a “more effective” alternative: “This is a paid endorsement. I receive commissions on sales if you click on links in this story or use the code included in the review.”
Failure to disclose paid endorsements violates the FTC’s terms. However, it is unclear whether Amazon is at fault here if it has informed associates to add in a disclosure note. The FTC did not immediately respond to Business Insider’s request for comment.
In a set of guidelines for dealing with endorsements, the FTC says companies that recruit influencers to endorse products should “check periodically” whether they are making disclosures, and “deal with anyone who isn’t complying.” While this is not directly related to Amazon, it does suggest that it has a responsibility to monitor influencers and ensure they are meeting requirements.
In a statement later emailed to Business Insider, a spokesperson for Amazon said that any associates that do not follow its guidelines are subject to action and could see their accounts closed. The spokesperson also said that Amazon monitors associates to ensure that the rules are being met.
This complaint comes just weeks after reports surfaced that the FTC is speaking with Amazon’s competitors about its business practices and looking at whether it is harming its competition.
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