The department store chain Lord & Taylor has agreed to settle charges with the Federal Trade Commission (FTC) for deceptive marketing on Instagram. The company paid popular users up to $4,000 to post a single photo of themselves wearing a dress.
While paid Instagram posts are commonplace nowadays — some people are “>paid up to $8,000 for a single photo — Lord & Taylor broke FTC rules by not requiring photographers to mention that their photos were actually paid advertisements.
Lord & Taylor paid 50 “fashion influencers” up to $4,000 each to post a photo of themselves wearing a new paisley dress from the brand’s Design Lab collection. The FTC says those unlabeled sponsored photos reached 11.4 million Instagram users over 2 days, generating enough attention that the dress quickly sold out.
“Consumers have the right to know when they’re looking at paid advertising,” said Jessica Rich, the FTC’s director of consumer protection bureau.
Lord & Taylor is now warned to avoid “misrepresenting” paid ads in a similar way in the future. If it breaks the rules again, the company may be forced to pay civil penalties to the FTC.
USA TODAY reports that the FTC is currently cracking down on companies breaking its rules regarding unfair or deceptive marketing. The Internet has become the wild wild west of sneaky advertising, especially as Instagram and other photo-sharing services take off, and now the government is trying to rein things back in.