FTC Settles with CSGO Lotto Owners and What This Means for Influencers and Businesses Alike
The Federal Trade Commission (“FTC”) has approved a final consent order that settles its first-ever case against individual social media influencers. The case involves Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell, two highly influential figures in the gaming world, who have faced charges for deceptively promoting their gambling website, CSGO Lotto.
The FTC’s action sheds light on the growing importance of transparency in influencer marketing, a space that has expanded rapidly in recent years. Martin and Cassell, who were also the owners of CSGO Lotto, posted content online encouraging their followers to use the website to gamble with virtual items. These items, known as “skins,” were traded and wagered on the platform for real money. However, their content failed to disclose that they were not just users of the service but its actual owners. Moreover, they paid other influencers to promote the site on social media without requiring proper disclosure of the payments.
This case highlights the critical role businesses and influencers play in ensuring ethical marketing practices. The FTC’s ruling mandates that the individuals involved must clearly disclose any material connections in future endorsements. This includes revealing any financial relationships or business ties that could influence the authenticity of their promotion.
For businesses, particularly those engaging in influencer marketing, this ruling is a reminder of the necessity for clear and visible disclosures when working with influencers. Whether you are partnering with micro-influencers or high-profile personalities, it’s crucial to ensure that all sponsored content is transparent to the audience. If influencers are compensated for their posts or have any business ties to the product or service they are promoting, this must be disclosed.
The ruling also addresses the practice of misrepresenting influencers as ordinary consumers when they are, in fact, paid promoters. This kind of misleading advertising can not only harm consumer trust but also lead to legal repercussions. In fact, the FTC has sent warning letters to other influencers, signaling that they must follow the guidelines set forth in this case.
So, what does this mean for your business? If you're using influencer marketing or planning to do so in the future, it's time to review your partnerships and ensure that all content adheres to the FTC’s guidelines. Make it a priority to work with influencers who understand the importance of disclosure and transparency in their endorsements.
By staying ahead of the curve and following best practices in marketing transparency, your brand can build stronger, more authentic relationships with consumers while avoiding potential legal issues. Ensuring full transparency in your influencer partnerships will not only help you comply with legal requirements but also foster trust with your audience, a key ingredient for long-term success.
If you’re unsure where to begin or need help navigating these rules, reach out to a marketing expert or legal advisor to ensure your campaigns are FTC-compliant.
If you would like to read more about this case and others, visit our Case Studies Library.
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This article is for information purposes only. It is not intended to be and should not be relied on as legal advice for any particular matter.